Donut Franchise

Over 30 years of customer satisfaction and growth Table of contents Who is RFGA and what’s the secret recipe to their success? bb’s cafe - why the bb’s brand? What stirs you? It can only be bb’s cafe The bb’s cafe unique advantage relax and recharge bb’s cafe - a system that works for you bb’s positioning statement Are you ready to take the wheel? Advantages of the RFGA bb’s cafe franchise Will you be successful with bb’s cafe? What does it take to be a successful bb’s cafe owner/operator? Frequently asked questions Want to join the bb’s team? Happy Franchisees Further information 4 6 7 8 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 20 2 1 Inside back cover GHT BLEND OF BUSINESS JUST THE WAY YOU LIKE IT Brand Franchise Opportunity The right blend of business 10 inte Table of contents 1 Table of contents A message from your Managing Director, Mr. A.J. (Tony) Alford...............................................3 Introduction to Donut King...................................................................................................................4 Advantages of a Donut King Franchise.............................................................................................5 Donut King Support System................................................................................................................12 Who is RFGA and what’s the secret recipe to their success? bb’s cafe - why the bb’s brand? What stirs you? It can only be bb’s cafe The bb’s cafe unique advantage relax and recharge bb’s cafe - a system that works for you bb’s positioning statement Are you ready to take the wheel? Advantages of the RFGA bb’s cafe franchise Will you be successful with bb’s cafe? Are you ready to take the wheel?.....................................................................................................13 4 Want to join the Donut King team?..................................................................................................14 6 7 Frequently Asked Questions................................................................................................................27 8 Happy Franchisee.................................................................................................................................29 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 20 2 1 Inside back cover What does it take to be a successful bb’s cafe owner/operator? Frequently asked questions Want to join the bb’s team? Happy Franchisees Further information HT BLEND OF BUSINESS JUST THE WAY YOU LIKE IT The right blend of business Contact....................................................................................................................................................30 10 inte 2 A message from the Managing Director Mr A J (Tony) Alford 3 Table of contents Dear Prospective Franchisee, Retail Food Group is the ultimate owner of the Donut King, Brumby’s, Michel’s Patisserie and bb’s cafe franchise systems throughout Australia and New Zealand. On behalf of Retail Food Group, and the Michel’s Patisserie franchisor, we welcome the opportunity to introduce ourselves and our proven Who is RFGA and what’s the secret recipe to their success? 4 franchise systems and thank you for your inquiry. bb’s cafe - why the bb’s brand? What stirs you? Since its inception 6 7 in 1989, Retail Food Group has successfully grown Itfrom a small franchisor with less than 50 stores to become one of the can only be bb’s cafe 8 largest Australian franchisors with four (4) franchise systems, boasting The bb’s cafe unique advantage 10 in excess of 1050 stores. relax and recharge 1 1 bb’s cafe - a system that works for you This development increasingly takes advantage of group economies and synergies which a large franchise network can command. The commissioning of a retail business is the culmination of an individual or family ‘dream’ of becoming an ‘entrepreneur’ and controlling your own financial destiny. Assuming control of one’s financial destiny however, also involves a degree of risk which varies according to both the type of business participation as well as the risk aversion profile of the individual. The resolve to become a small business owner involves the consideration of many issues other than purely financial aspects. To profitably and productively conduct a retail business, there are two other important investments, apart from the financial, which require determination: Are you ready to take the wheel? Each of our franchise systems offers an opportunity to embark upon a bb’s positioning statement 1 3 unique food retailing experience. 1 4 1 5 1 2 We are of the opinion and belief that our systems are some of the most 1 6 remaining unsurpassed in terms of What does it take to be a successful bb’s systems, all offering quality products 1 7 being fully-integrated franchise cafe owner/operator? Frequently asked questions in each of the brand’s four target markets.8 1 and market leadership Will you be successful with bb’s cafe? respected systems in Australasia, Want to join the bb’s team? 20 Advantages of the RFGA bb’s cafe franchise • Lifestyle investment – the time, commitment and dedication needed to successfully conduct the business; and • Emotional investment – the investment in such a business will, almost without exception, have an impact upon or effect on more than one person. We are of the opinion that Retail Food Group has assembled four quality franchise systems, where a buyer can thoroughly investigate the right system and business for themselves, to ensure they; a) satisfy their financial, lifestyle and emotional investment criteria, while b) acknowledging the risk which is present in any business pursuit. From our perspective, we are desirous of procuring franchisees who display a genuine capacity and capability of contributing to the ongoing enhancement and growth of the relative system they join. We Franchisees Happyattribute this to the ongoing dedication and loyalty of our franchisees 2 1 whose businesses are nurtured by a franchisor who provides business, Further information Inside back cover education, marketing and operational systems as well as ongoing, continually improving support systems which have been developed, enhanced and maintained over many years. HT BLEND OF BUSINESS JUST THE WAY YOU LIKE IT The right blend of business inte 4 Ideally, a franchisee will possess the following personal attributes: • Communication Skills • Honesty • Integrity • Positive Personality • Self-Motivation • Financial Competence • Goal-Oriented • Leadership Qualities • Team Player If we have just described your personality, outlook and aspirations we seriously encourage you to consider the benefits and advantages of investing in one of our proven-quality franchise systems. Those personal attributes, when combined with our strong group identification, excellent product ranges, comprehensive initial training programmes, access to the extensive resource bases as well as the ongoing support that each of our franchise systems offer, provides a substantial platform from which franchisees can strive for and achieve business, financial, lifestyle and emotional wellbeing or “success”. Success is a term too often used and, in our belief, neither well-defined nor understood. Success as a franchisee is measured and determined by reference to the degree by which your actual performance matches all those benchmarks previously established for your business. Success therefore, from our perspective, is the degree by which the franchised operation can, and does, assist you in the achievement of your personal goals and aspirations. The majority of people work and become business owners to assist in the achievement of non-business objectives – those objectives are usually focused around lifestyle and family. Put another way, the achievement of lifestyle and family goals will almost always be related to the success of your franchised operation. Every person involved in a Retail Food Group franchise system has made a significant investment, whether it be monetary, emotional or other means. We are confident that the systems which Retail Food Group has developed and assembled over the past 19 years can assist you not only in protecting your various investments, but assisting you to prosper in what is a very competitive industry. Finally, we consider that the acquisition of a Retail Food Group franchise is not just a means to achieving lifestyle, financial and emotional objectives – it will become part of you. Yours Sincerely A J (Tony) Alford Chief Executive Officer RETAIL FOOD GROUP (AUSTRALIA) Introduction to Donut King 5 The first Donut King store was opened in Sydney in 1981 and the concept was shortly thereafter developed into a rudimentary franchise system. The Donut King Franchise system has since evolved into a network of over 300 stores throughout all Australian states and territories, the vast majority of which are owned and operated by franchisees. The Donut King System is generally concerned with the retail sale of specialty donuts (yeast and cake), espresso coffee, hot and cold beverages, signature quakeshakes, soft serve icecream, breakfast toasts and hot dogs. In 2007 Retail Food Group established a Central Manufacturing Facility (or CMF) to service the donut product needs of its franchisees and deliver further lifestyle benefits to store owners. The CMF program is now being rolled out throughout Australia. Donut King System Pty Ltd ACN 097 339 645 is the Franchisor of the Donut King franchise system. Advantages of Donut King Franchise 6 Specialty food retailing has expanded rapidly as consumers demand more convenience, choice and value. The number of new brands and systems is testament to this growth. However, with growth comes complexity. Certain parts of the category are crowded with many stand alone stores, chains and international brands all vying for a piece of the market. Thus marks the Donut King difference – a simple product with a hefty profit margin which is easily produced and allows for multiple sales and marketing opportunities. As a treat the world over, donuts appeal to people of all ages and demographics. Their simple style and easy acceptability make them the cornerstone of the Donut King System. When combined with a range of complementary products, the major strength of the Donut King system can be seen easily as operational simplicity and consumer acceptability. The Donut King brand, image and products have all developed over many years into a powerful retail entity. The brand itself enjoys over 90% consumer recall! Market research has proven that our popularity is not segregated to one or two consumer groups but in fact pervades all ages and spends. The unique difference of a Donut King outlet is easily identified and attractive to our consumers. The flexibility of our store design means that, through minor modifications, it can be easily adapted to a broad range of locations. So, be it a small kiosk or large in-line shop with tables, our operational needs can be met. Our growth and the strength of our brand ensures that Donut King remains a sought after tenant – providing opportunity in the highly competitive retail leasing market. The simple production of the donut offer means franchise owners are able to focus more time on systematically growing their businesses using local knowledge, strategic area marketing and excellent customer service. Donut King is a happy place to shop for anyone, offering a range of donut products along with signature cold drinks and ice creams as well as a tasty range of hot dogs. Donut King easily translates the focus of the business - an affordable place for singles, groups or families, young, old or in between to indulge in one of life’s little rewards or treats anytime. Add to this freshly ground coffees and designer hot beverages and the Donut King formula start to take shape. As a business package, Donut King is the “King” of opportunity providing all support systems, marketing and operations manuals and training along with ongoing field advice and coaching to assist franchisees. Donut King Support System 7 Table of contents BUSINESS DEVELOPMENT MANAGER (BDM) The Business Development Manager is your constant business coach and mentor throughout your time with Donut King. They will assist in managing, marketing and operating your business – helping you maximize the potential of your investment and realize your business plans. BDM’s are an integral part of any franchise system and the relationship they enjoy with franchisees is both complex and rewarding. relax and recharge 1 1 PROPERTY AND LEASING bb’s cafe - a system that works for you 1 2 Over 19 years of retail leasing and store placement means 13 very a bb’s positioning statement strong national presence and recognition amongst premier retail centre Are you ready to take the wheel? 1 4 developers and landlords. The Donut King footprint is easily identifiable. Advantages of the RFGA bb’s cafe franchise 1 5 The brand image has been established over many years and the Sales Will you be successful with bb’s cafe? 1 6 and Leasing Department leverage both this market image and their strong What does it take to be a successful bb’s cafe owner/operator? 1 7 relationships with national lessors to the advantage of franchisees. Frequently asked questions Want to join the bb’s team? MARKETING AND PROMOTION 1 8 20 Marketing also provides a national benchmark Recommended Retail Pricing (RRP) structure as a tool and guide for your business. Throughout the Donut King network the marketing department seeks to share resources and feedback on product development and improvement. This ensures Donut King is at the forefront of innovative new ideas, product development and technology. Unique support is provided from a creative design department housed at our National Office, providing franchisees with access to a catalogue of professional material that is usually only available through more expensive external sources. TRAINING ACADEMY All Donut King franchisees attend a comprehensive yet relaxed training programme at our academy on Queensland’s Gold Coast. Franchisees are able to learn in a happy and positive environment from specialist training staff. The curriculum covers every facet of your business from the obvious operational and technical skills to conceptual planning of your business, customer service and marketing. Support continues via ‘refresher’ training seminars delivered around the country at Franchise Enhancement Council meetings and one-on-one with BDM’s. The Donut King Happy Franchisees brand has over a quarter of a century of history with the 2 1 Australian public. The look and feel of Donut King is Inside back cover highly recognisable Further information and adds immense brand value to the franchise. Marketing contributions from franchisees form the bulk of the marketing budget while negotiated trade agreements also include marketing support from a range of suppliers. These combine to fund on-going professional marketing support in national campaigns across most media. Television, Radio, Print and Direct Response strategies are all employed to help achieve our communication objectives. These range from driving sales, dollar spend HT BLEND OF BUSINESS JUST THE WAY YOU LIKE IT The right blend of business NATIONAL HEAD OFFICE 4 Based on Queensland’s Gold Coast, Retail Food Group has a staff of bb’s cafe - why the bb’s brand? 6 industry specialists in Marketing, Operations, Procurement, Administration, What stirs you? 7 Human Relations, Training, Finance and Business Planning that is It can only be bb’s cafe pragmatic ‘hands-on’ folk, all passionate about retail 8 complemented by The bb’s the success of their brands and systems. 10 and cafe unique advantage Who is RFGA and what’s the secret recipe to their success? and consumer demand to improving Donut King product awareness, visit frequency, customer count, loyalty and more. In addition to national campaigns you will receive throughout the year, targeted Point Of Sale marketing tools for use at store level. You will also be equipped with a variety of local marketing and promotional strategies that can be employed to implement local area marketing campaigns. These include certain targeted communications such as: • Store opening strategies • Under new management • VIP Cards • Box sales drivers • Product sampling loyalty drivers • Planned frequency & purchase drivers inte Donut King Support System (continued) 8 Table of contents FINANCIAL DEPARTMENT Donut King’s financial and operational information systems are enviable. They will assist you to run your business efficiently and provide timely, relevant information to help formulate business decisions. CENTRAL MANUFACTURING FACILITY (CMF) The CMF was established in order to supply pre-made donuts to stores with limited in-store preparation areas. Orders are placed online and supplied to stores on a regular basis. The CMF program is now being Who is RFGA and what’s the secret recipe to their success? 4 rolled out nationally and provides added lifestyle benefits given reduced bb’s cafe - why the bb’s brand? 6 product preparation times. What stirs you? It can only be bb’s cafe COMPETENCY-BASED 7 8 TRAINING TheCompetency-based Training (CBT) is an approach to teaching that bb’s cafe unique advantage 10 places emphasis on being able to utilise the skills learned once back in relax and recharge 1 1 the work place. CBT is comprised of modules broken into segments and bb’s cafe - a system that works for you 1 2 designed to ensure each trainee has achieved all the outcomes3(skills bb’s positioning statement 1 and knowledge) required by each. 1 4 1 5 1 6 1 7 1 8 20 2 1 Inside back cover Progress in CBT is not based on time. Once you have achieved the outcomes required in a module, you can move to the next module. In this way, trainees may be able to complete a programme more quickly. The Gold Coast Academy utilises CBT and will provide you with the skills, techniques and expertise required to own and operate a Donut King franchised outlet. Regardless of previous experience, you will receive all the necessary support and learn all technical, operational and management skills necessary to operate a Donut King outlet. Are you ready to take the wheel? Advantages of the RFGA bb’s cafe franchise Will you be successful with bb’s cafe? What does it take to be a successful bb’s cafe owner/operator? Frequently asked questions Want to join the bb’s team? Happy Franchisees Further information HT BLEND OF BUSINESS JUST THE WAY YOU LIKE IT The right blend of business FRANCHISE ENHANCEMENT COUNCILS (FEC) Twice each year you will have the opportunity to attend state-based technical and business management training sessions conducted by suppliers and national office representatives. These meetings will ensure that you are kept up-to-date with current Donut King Procedures and developments within the system. inte Are you ready to take the wheel? 9 Ultimately your destiny is in your hands! The success of the Donut King brand depends on our franchisees. If you possess the following skills; • Self motivation, • Strong desire to achieve and succeed, • Have a positive attitude, • Strong verbal and written communication skills, • A genuine interest in people, • The ability to deliver outstanding customer service, • Able to relate well to employees, • Have a high level of enthusiasm and energy, • Wish to be actively involved in your own business, • Are willing to work the necessary hours, • Will be comfortable working within a franchise system, • Are willing to comply with stringent operating standards, and • Have a passion for retailing? Then you meet the initial criteria of a successful Donut King Franchisee. Want to join the Donut King team? 10 Once you have committed to selecting a Donut King franchise, we support you through a structured application process, openly exchanging information and forming a pro-active, positive relationship from the outset. STEP 1 ENQUIRY AND INFORMATION PACKAGE IS RECEIVED STEP 2 FIRST INTERVIEW COMPLETED WITH STATE CONSULTANT STEP 3 APPLICATION FORM COMPLETED DISCLOSURE DOCUMENT PROVIDED STEP 4 SEEK INDEPENDENT LEGAL AND FINANCIAL ADVICE (OPTIONAL) STEP 5 STORE VISITS MEET EXISTING FRANCHISEES INTERVIEW WITH RFG REPRESENTIVE STEP 6 PROSPECTIVE FRANCHISEE CONSIDERS FINANCE OPTIONS APPLICATION APPROVAL OR DECLINE STEP 7 FORMAL APPROVAL AND TRAINING ADVICE LETTER STEP 8 COMPLETE FINANCE STEP 9 FRANCHISE AGREEMENT ISSUED STEP 10 SHOPFITTER’S CONTRACT COMPLETED STEP 11 SEEK MANDATORY INDEPENDENT LEGAL ADVICE (IT IS ALSO RECOMMENDED THAT YOU SEEK FINANCIAL AND BUSINESS ADVICE AT THIS TIME). STEP 12 SIGN AND RETURN FRANCHISE DOCUMENTATION STEP 13 TRAINING STEP 14 STORE OPENING This is a guide only and dependent on each individual sites circumstance Frequently Asked Questions 11 Table of contents Q: What is the total cost of establishing a Donut King outlet? A: The total cost of establishing a new store varies from $230,000 to $407,000 + GST depending on the location and fit-out. Accurate estimates will be established and provided to you prior to you having to sign any binding Agreement. The total cost will include all equipment, the entire store fit-out, your initial franchisee fee, your training fee, your opening stock, franchisor legal fees, design and approval fees, council/other authorities costs, initial working capital,4 Who is RFGA and what’s the secret recipe to their success? and initial promotional campaign costs. bb’s cafe - why the bb’s brand? What stirs you? 6 ongoing marketing services to facilitate constant attraction of new customers, increased average dollar sales and the frequency of purchase. Q: Will I have to pay a deposit? If so, when and under what circumstances, would I lose my deposit or any part of it? A: A deposit is payable. Deposit monies are refunded if the Franchisee’s application is not approved. The Franchisor may, however, deduct from the deposit its reasonable expenses incurred in considering your Application for Franchises. See Section 13 of the Franchisor’s Disclosure Document for more detail. What does it take to be a successful bb’s cafe owner/operator? Frequently asked questions 1 7 Q: After purchasing a Donut King store, what on-going fees are Want to join the bb’s team? 20 required? Happy Franchisees Service Fee equal to 7% (plus GST) of your total1 2 A: A Franchise Further information Inside back cover gross sales is payable in connection with a traditional Donut King franchise. ‘Express’ concept franchises require the payment of a Franchise Service Fee equal to 9% (plus GST) of your total gross sales. A Marketing Contribution equal to 3% (plus GST) of your total gross sales is also payable into an independently audited marketing fund. This fund is used to collectively promote increased customer awareness and provide each store with promotional material and 1 8 Q: How much working capital will I require? A: We recommend all franchisees budget between $20,000 $40,000 for their first year’s trading. Q: Do you have any finance schemes to assist new owners? A: We are an approved franchise system with ANZ, Westpac, and Commonwealth Bank of Australia - this means that potential franchisees that achieve bank approval maybe able to borrow between 50% - 65% of the total establishment cost on the value of the business. HT BLEND OF BUSINESS JUST THE WAY YOU LIKE IT The right blend of business Q: How much cash will I need to purchase a Donut King store? It can only be bb’s cafe A: The financial ratios vary according to your personal circumstances8 The bb’s cafe unique advantage of Thumb’ percentages can be used for 10 however; the following ‘Rule relax and recharge 1 1 initial assessment. bb’s A minimum of approximately 25% of the total franchise cost is2 1 a. cafe - a system that works for you preferred. statement bb’s positioning 1 3 b. You may (if approved) be able to borrow up to 60% of the total Are you ready to take the wheel? 1 4 franchise cost using the value of the business as security. Advantages of the RFGA bb’s cafe franchise 1 5 c. You will be required to demonstrate your ability to service all Will you be successful with bb’s cafe? 1 6 borrowings. 7 Q: What Initial Franchise Fees will I be required to pay? A: An Initial Franchise Fee of $50,000 plus GST is payable in connection with a traditional Donut King franchise. ‘Express’ concept Initial Franchise Fees are $17,500.00 plus GST. An Initial Training Fee of $13,000 plus GST is also payable together with an Initial Marketing Activity Fee of $3,000 plus GST. inte 12 Q: What detail can you provide in gross profit, expense items and turnover that will help me prepare budgets? A: It is inappropriate for us to make any representation to you on the potential levels of sales and profitability on any existing or new store. We will provide proforma budget layouts that you can test and budget for the various levels of sales that you decide are appropriate. You should also obtain independent financial advice in connection with these matters. Q: Where are Donut King Stores currently located? A: As the numbers are growing annually we can either email you a list or you can retrieve this information from your States telephone directory or our store locater on the Donut King website – www.donutking.com.au . The Franchisor’s Disclosure Document also provides you with this list of existing Donut King Stores. Happy franchisees 13 In the six years that we have had our Donut King Franchise we have found that the system is excellent. We would not put our name to this testimonial if we did not believe in this franchise and its systems. Our advice to new franchisees is to put their faith in a tried and true system that has been improving in the 25 years since its inception. If you do not have the confidence to do so, then you should not purchase this franchise. Donut King is a partnership, not only with RFG but with fellow franchisees around the country and is indeed a ‘team effort’. There will be times, as in any partnership, that you will feel that it could be done better, but this is only natural and you should discuss your doubts. Our only complaint is that we did not buy a Donut King 15 years go as we would probably have 5 or 6 by now, but at our stage in life one is certainly enough, a hobby as well as an income. Alan & Lorraine Beeby Donut King - Glendale We, Don and Pam Orth of Dubbo, opened our first Donut King store in October 1993, with the opening of our second store in December 1993. From this time on we have seem many improvements in the Franchising system for Donut King, not only in the Marketing Department, but also in the technology for recording sales and data, improvements in the product and its ongoing development for better quality and appearance, forever trialing new and different items and seeking acceptable costs etc for the betterment of each franchisee. The training department is now excellent with experienced persons able to put us on the right track. Every month seems to have an added area for the betterment of franchisees. Retail Food Group, now controls the franchising system for bb’s, Brumby’s and Michel’s Patisserie as well as Donut King. In all this makes a powerful entity to administer all aspects of their expertise to each franchise. When support is needed, it is given.We are proud to be part of the “family”. Don and Pam Orth Donut King - Dubbo relax and recharge bb’s cafe - a system that works for you bb’s positioning statement Are you ready to take the wheel? Advantages of the RFGA bb’s cafe franchise Will you be successful with bb’s cafe? What does it take to be a successful bb’s cafe ow Frequently asked questions Want to join the bb’s team? Happy Franchisees Further information 14 Free Call: 1800 067 619 email rfg@rfg.com.au web www.rfg.com.au THE RIGHT BLEND OF BUSINESS Thank you for taking the time to read this document. If you are interested in making the next step please call the bb’s Franchise Recruitment number for further information. Group Key Personnel Gary Best COO Gavin Nixon Sales & Leasing Manager Faith Manning Sales Co-ordination Manager Franchise Recruitment JUS WA LIK 2 Table of contents Who is RFGA and what’s the secret recipe to their success? bb’s cafe - why the bb’s brand? What stirs you? It can only be bb’s cafe The bb’s cafe unique advantage relax and recharge bb’s cafe - a system that works for you bb’s positioning statement Are you ready to take the wheel? Advantages of the RFGA bb’s cafe franchise Will you be successful with bb’s cafe? What does it take to be a successful bb’s cafe owner/operator? Frequently asked questions Want to join the bb’s team? Happy Franchisees Further information 4 6 7 8 1 1 1 2 1 3 1 4 1 5 1 6 1 7 1 8 20 2 1 Inside back cover HT BLEND OF BUSINESS JUST THE WAY YOU LIKE IT The right blend of business 10 inte