Franchising · 10 June 2016

Second Cup: The 40 year-old franchise honing in on the UK high street

Second Cup
Second Cup has opened five locations across the UK, with a further six planned before the end of the year

From humble beginnings in a Toronto shopping centre in 1975, Canadian coffee chain Second Cup has expanded to 30 regions and come to operate more than 160 cafes worldwide in its 40-year history, serving premium fair trade tea and coffee alongside a wide range of food and drink.

In 2016 the franchise set its sights on the UK and so far five new locations have opened across the country so far, whilst another six are planned before the end of the year.

Business Advice caught up with Second Cup’s European franchise director Jon Cullen, to find out the secret to the long-term success of the firm’s franchising model.

(1) Hi Jon, how’s it going?

Things are going really well. Second Cup is expanding across the UK at a steady pace after nearly two years of planning. We currently have five new locations up and running, and will have six opened by the end of the year. And we’re covering the UK. By the end of 2016 we’ll be in Manchester, Birmingham, Cardiff, Leicester and Norwich, as well as have locations in Putney, Harrow and Kensington amongst others.

(2) What’s your background in franchising?

I’ve been working in UK franchising for 25 years in various roles covering operations, sales and logistics. I’ve worked at a senior level for a lot of my career, and have learnt how to understand markets, source products, develop relationships with banks and property owners, as well as leasing companies, designers and fitters

(3) What’s been the driving force behind setting up Second Cup in the UK?

The coffee industry in the UK is growing by between nine and 11 per cent a year in the UK. By 2021, the sector is expected to be worth around £22bn – representing huge growth. Although there are many established coffee chains on the high street, people still want greater choice. As people’s taste buds change, we’ve developed subtler blends of tea and coffee which we feel there’ll be a demand for.

Lots of people travel internationally, and many will recognise the Second Cup brand after spending time in Canada or the Middle East – it’s a brand that people trust.

(4) What made you decide that franchising was the best model for growth?

Second Cup is a 40 year-old franchise, so it’s grown through franchising since day one. We’ve found that franchising provides greater access to new markets and offers investors something different. It’s a clinical, sensible way to develop a brand.

(5) How do you go about choosing your franchisees? What criteria do they have top meet?

The brand only partners with franchisees that are willing to invest in multiple stores, rather than individuals that take over just one location. We have 12 UK franchise partners so far, all of whom have agreed to operate between five to ten stores at different locations.

While there aren’t strict criteria, all of our partners have backgrounds in either food and beverages or retail, with the experience of developing a business and the infrastructure needed for growth already in place. Our franchisees are management companies that buy up clusters of stores as an investment that develop a team to operate them. In the future, as we look to more provincial parts of the UK, I’m sure we will be changing our policy to bring individuals into our franchising model.

(6) How does your personal experience in franchising help Second Cup’s franchisees, some of whom may be new to the concept?

There aren’t many partner organisations that are new to the concept of franchising, but they still need someone like me, with the connections and experience I’ve gained.

Franchisees need access to various credit lines including banks, and they need to understand logistically how to bring the brand to market. Having strong relationships already in place with clearing banks, accountants, landlords, leasing companies and various other types of organisation, through someone like myself, is invaluable.

(7) Reputation is everything. How do you ensure your franchisees maintain the quality and standards set by the brand?

We have an operations team that travel regionally, regularly visiting in on stores to check installations, the quality of the products and cleanliness. I find that franchising model helps owners maintain a higher standard of quality in stores than would be the case with managers operating a company-owned outlet.

Location managers do a good the vast majority of the time, but they’re never incentivised to go the extra mile in terms of quality. A franchisee invests their own money to develop a brand, and if they fail it’s their own money that’s been wasted. They are more on the ball and watch the numbers more carefully, which gives them that added hunger and drive for success.

Click here to read our exclusive interview with one of British franchising’s most recognisable figures – BFA Forum chair Carl Reader.

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ABOUT THE EXPERT

Fred Heritage is deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London. He previously worked as a reporter at Global Trade Review magazine.

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