A BANYO boutique beverage business is optimistic that its new franchise will take Egypt’s Western coffee market by storm.
Rob Mergard (pictured) is a living example of the proverb ‘when the going gets tough, the tough get going’.
He has identified the fertile banks of the Nile River as a treasure trove for his coffee roaster and espresso bar group.
The founder of Dancing Bean Espresso describes the Arab nation as the “biggest bonanza” he has come across.
“What started out as helping my friend [export and trade facilitator Joseph Hannah] set up a franchise store in Cairo has become a scenario where you can take as much market share as you want,” he says.
“Egypt is still discovering Western coffee and many customers there like espressos more than Turkish-style coffees. The franchise is in the massive New Cairo precinct near the international airport, where we are lucky enough to be the first coffee business.”
Mergard reveals the franchise leased a 25sqm area for the espresso bar in an office building foyer.
“We trained a Turkish roaster to prepare coffee beans in our way. We like to control the quality of our beans and there are also cost savings after establishing eight to 10 good accounts,” he says.
Dancing Bean opened its first espresso bar in 1999, at the Brisbane Transit Centre and has expanded to three shops and its own roaster. The company turned over $2.5 million during the 2011 financial year and employs eight with a further three employees in Egypt plus directors.
“We have been around longer than Gloria Jeans or Starbucks and increased revenue by 50 per cent last year, with a further 50 per cent jump expected in the next 12 months. Growth should be on a steep curve as we are the only Western coffee business roasting in Egypt,” says Mergard.
There has been a fair share of cultural considerations regarding the corporate logo that features a woman without a burka body covering.
“We wondered whether we should add a burka so as not to offend anyone. However, we realised our Western brand shows individuality, which attracts customers,” he says.
Mergard says the company is working hard to create employment opportunities for locals in a country where unemployment is rampant.
“The Middle East is experiencing a transition to more women in the workplace and we are accommodating that," he says.
“We aim to provide better work conditions and make a difference by paying people there to make coffee bags instead of importing them from China.”
The average franchise costs about $30,000 to establish in Egypt, while the same set-up in Australia would require around $150,000.
“We are looking for people who want to create a syndicate or invest that amount themselves. They would have to build and open the franchise, but we would provide training from day one,” says Mergard.
“Franchises in Egypt have to generate their own income and rollout a number of sites within an agreed number of years. The first year will be slow as it is a learning curve but there will be exponential growth after two to three years.”
Closer to home, the search is underway for potential franchisees and there is significant interest from regional towns.
“The countryside is a relatively untapped market that is really starved for quality coffee. We have received expressions of interest from Far North Queensland, driven by the mining boom,” says Mergard.
“I am also looking to lease our Roma Street business to existing staff, so they can be rewarded more for their efforts. We are looking to open more businesses but not grow our staff numbers as it is still hard times and there has not been enough recovery for that to happen.”
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