How COBS bread sliced into Canada with its growing franchise

“Leslie and Roger build great relationships with their franchisees. When they come to our bakery they say hello Emily and Craig, how are you doing? How is your dog? They know our staff. And they have built those relationships with more than 700 franchisees in Australia and Canada. That flows all the way through the organization,” Ms. Mirsky says…“It also brings you closer together. It is a family affair. This story is about two people who opened up a bakery in Australia and they had the recipe for success.”

The Financial Post
May 27, 2013

How COBS bread sliced into Canada with its growing franchise
Mary Teresa Bitti

Cobs%20bread%20Bakers%20Delight.jpg

Emily Mirsky and Craig Cochrane have seen a 15% rise in sales at their COBS Bread franchise in Toronto. Tyler Anderson/National Post

Emily Mirsky loves going to work each day. Of course, it helps that the work is the COBS Bread franchise she and her husband Craig Cochrane own and operate.

“People are generally pretty happy when they go to a bakery,” she says. In addition to smell of fresh-baked bread, Ms. Mirsky, who handles the front-of-house duties, makes a point of getting to know her.

“As much as bread is a necessity for some people, some of our products are more expensive than what you’d find at the grocery store but you are paying for that experience, for fresh-baked, for the staff to know who you are — that is a big thing we try to instill in our staff. This is an experience, not a business transaction. Know your customer and their kids. Build that relationship in your community. They are the people who help to grow your business.”

And it is growing. Since purchasing the Toronto-based store in 2011, sales have grown between 10% and 15%. It’s a philosophy that starts at the top, with Australia-based franchisors Leslie and Roger Gillespie who own Baker’s Delight — the company that started what is now a successful franchise brand across Australia and since 2003 in Canada.

“Leslie and Roger build great relationships with their franchisees. When they come to our bakery they say hello Emily and Craig, how are you doing? How is your dog? They know our staff. And they have built those relationships with more than 700 franchisees in Australia and Canada. That flows all the way through the organization,” Ms. Mirsky says.

Being able to export that family feel from Australia was among several key considerations when the Gillespies decided to expand. “My parents opened the first bakery in Melbourne, Australia in 1980,” says Aaron Gillespie, vice-president and head of Canadian operations.

“They started franchising in 1988 and began looking at global opportunities in the U.K., the U.S., Ireland and Canada.” He said Canada was the best choice for a number of reasons: similar government, social and economic systems and equivalent costs in terms of ingredients, equipment, labour and rents. COBS Bread opened its first corporate store in Canada in November 2003 in Edgemont Village in North Vancouver.

“It was incredibly important that our corporate culture travel with us,” Mr. Gillespie says. “I was one of a team of 10 to come over to Canada to set up the bakeries. The culture is one of high energy, fun, connecting with customers in the community. Together with the fact that we make bread from scratch every day, our great customer service is what sets us apart.”

Providing career opportunities to young franchisees through its manage-to-own program also made the move from Australia. That’s how Ms. Mirsky and Mr. Cochrane were able to qualify for financing to purchase their franchise.

“We recognized a lot of great people with potential to be great business operators. It was successful in Australia and we formalized it here in 2008,” Mr. Gillespie says.

“Good franchisees care about their people, great bread, love connecting with customers and supporting the community. That’s true of our franchisees in Australia and it’s the same here in Canada.”

Lorraine McLachlan, president and chief executive of the Canadian Franchise Association, says there are several key areas franchisors should consider before exporting a franchise brand.

Are there cultural different differences that will impact how the brand may operate in another culture? Are you providing the types of goods and or services consumed in the desired country? Take a culturally sensitive look at the norms and customs, she recommends.

She says there are two ways to start a franchise brand in a new country. One is to “open a corporate location first to make sure all the elements are in place and working,” she says.

This is the route COBS Bread took. In fact, its first 20 locations were corporate stores with the first franchisee opening for business in 2006. Now, there are 75 locations across British Columbia, Alberta and Ontario.

“As we grow, we plan to keep 15 to 20 corporate stores because it makes sense to stay connected to the business. It also allows us to develop future franchisees who don’t have capital to buy straight away, as well as future support staff,” Mr. Gillespie says.

The other way to get started in a new country is to find a local partner to serve as master franchisee.

“In either case, you are establishing the brand, testing the market and addressing supply chain issues. Can you get what you need? Do you need to import things? Can you use your existing supply chain?,” Ms. McLachlan says.

Another thing that is important is to understand local laws. For example, Alberta, Ontario, New Brunswick, Prince Edward Island and Manitoba all have franchise disclosure legislation that requires franchisors to provide franchisees a significant amount of specified information. If you don’t comply, you are in violation of the law and it can become an expensive mistake, Ms. McLachlan says.

She recommends franchisors get local advisors: lawyers, consultants, accountants, bankers who specialize in franchising.

“You are creating a system that will help somebody operate the business exactly as it is intended to be operated so there is consistency from location to location,” Ms. McLachlan says. “It’s up to you to provide ongoing guidance and support to the master franchisee or individual franchisees.

At COBS Bread, that support includes encouraging area managers to share what’s working and what isn’t. “It’s a partnership,” Mr. Gillespie says. “It’s up to us to ensure the brand is progressing and moving forward and up to franchisees to meet brand expectations. We work together to achieve those things.”

It’s also something Ms. Mirsky appreciates. “They foster transparency. Every Thursday, we receive an e-newsletter and get to see what’s going on with other bakeries and the good things people are doing to increase sales and give back to their community. If someone had a fantastic weekend, you can call them up and ask what they did to achieve those sales,” she says.

“It also brings you closer together. It is a family affair. This story is about two people who opened up a bakery in Australia and they had the recipe for success.”

http://business.financialpost.com/2013/05/27/australian-baker-gets-slice-of-canadian-market/


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