Expanded Cravings

Franchising The Coffee Beanery was the graduate thesis of Cravings Group general manager Marinela Guerrero-Trinidad at the Asian Institute of Management.

Set up five years after Guerrero-Trinidad’s mother, Annie Pascual Guerrero, put up the first Cravings restaurant/bakeshop in 1988, The Coffee Beanery was conceived as a branded in-house coffee, using 100% local coffee beans, served in all Cravings outlets.

"It began to have its own client base. People would come to the restaurant for the coffee and order something from the bakeshop or restaurant on the side. That was when we realized that the Beanery could stand alone," said Guerrero-Trinidad.

The Beanery launched its franchising program in 2002, with the first franchised outlet located in SM Marilao. To date, it has five outlets outside Cravings.

"We are looking at approving three franchisees per quarter or a total of 12 for the whole year, which is the same rate of growth we had in the fourth quarter of 2003," said Guerrero-Trinidad.

The franchise fee for a seven-year contract is P500,000. The total investment, including rentals in a mall, is, however, about P1.8 million.

Opportunities

To expand the business, Cravings Group is also franchising its bakeshop and restaurant models. The franchise fee for the bakeshop (a quick-service café that offers a carefully selected array of freshly baked goods, classic restaurant favorites, and an extensive variety of hot and cold coffee confections) is P500,000 and is good for 10 years. The estimated total investment for an 80 sqm. location is P3 million.

For the bigger restaurant/bakeshop, which requires a space of at least 250 sqm., the total investment is between P10 million and P20 million, inclusive of the P3 million franchise fee. The franchise agreement is for 10 years.

There are currently three bakeshops and four restaurant/bakeshops under the franchising program.

"If I had my way, I would encourage franchisees to locate the restaurant/bakeshop in busy buildings such as the Philippine Stock Exchange Bldg. in the Ortigas Commercial Center," said Guerrero-Trinidad.

For the Cravings Group, the main problem of a franchisor is not so much getting enough applications for the franchising program but finding the right franchisee.

"We are looking for a franchisee who is either a resident of or holds office within the area where the outlet would be put up. This criterion gives us an added security in the capability of the franchisee to devote most, if not all, of his/her time to the business because we want them to be hands-on in the entire operation," said Guerrero-Trinidad.

Opportunities

Aside from the Cravings and The Coffee Beanery brands, the Group also operates the Monsoon Restaurant and Bar at the Linden Suites; The Center for Culinary Arts Manila; the C2CCA Restaurant and Bar at the AIM Conference Center; and the Seven Suites Hotel-Observatory in Antipolo City.

"Despite the pricey image attached to our name, our prices are comparable, if not cheaper, than our competitors. We have held on to our prices for the last two years while our competitors have raised theirs. We give customers value for their money through our salad bar (which serves greens that we grow organically ourselves and other generous servings," said Guerrero- Trinidad.

Within the next five years, the Cravings Group will explore the possibility of setting up its own outlets in the United States, the Middle East and Latin America.

"Our biggest challenge will be to operate a restaurant in Europe, not just to cater to the Filipinos but to tourists and locals there," said Guerrero-Trinidad.

Cravings has taken its first step towards global recognition when one of its CCA students, Lally Comia, participated and won at the Bangkok Food Festival with a live seafood cooking entry.

CCA is a regular participant in all Chefs in Parade competitions here and abroad.