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The Finn Review - Issue 5

Interview with Gloria Jean's Coffees MD, Peter Irvine

Peter Irvine sees things differently to most people. This is a common trait in outstanding entrepreneurs. The fact is that it's an exceptional effort to bring an unknown coffee brand to Australia and expand it to 229 stores in 8 years. This equates to a brand-new store opening every two-weeks for 8 years straight.

Gloria Jean's Coffees is a household name in Australia. The premium coffee market is growing and Peter Irvine is leading the charge. He was kind enough to speak with me recently.

SF: Hi Peter, you are opening stores at such a rate it's difficult to keep track - how many franchises do you have operating now?
PI: Yeah we have grown fairly quickly. We recently opened store number 229. Our first Gloria Jean's Coffees store opened in November 1996 and then we franchised for the first time in November 1997. To begin we opened two company-owned stores just so we could play around with it and get the structure and everything right.

SF: That's incredible growth. How many stores do you think you can support here in Australia?
PI: It's hard to put a number on it but certainly a lot more yet. We're experimenting with new locations such as roadside-style businesses. In fact I can tell you that later this week we're opening the first roadside Gloria Jean's in Australia at Coffs Harbour on the highway. We're really confident about this model and this opens up a lot of opportunities for us to continue to expand.

SF: Most of us have seen Gloria Jean's in shopping centres - what other locations do you target?
PI: We opened our first hospital-based store about a month ago. You might also have seen us at the Qantas terminals at the airports. Essentially we look for an opportunity to tap into people. We've also just opened our first store in Borders Books. In my mind we don't limit ourselves as to where we can open a store.

SF: I understand you have the Australian licence to operate Gloria Jean's Coffees through the US-based parent company - how many stores are there globally?
PI: Yeah we own the rights to Australia and New Zealand. I'd say there's about 475 stores around the world. The US has about 150 locations. The rest are in about 13 countries such Mexico, Japan, the Philippines, New Zealand, Ireland, Malaysia, Korea, Turkey, Dubai, and South Africa has just opened.

SF: What major lessons have you learnt along the way regarding selection of your franchisees?
PI: We've learnt quite a few lessons over the years and today we look for people that are hands-on. We look for franchise owners that have a passion and a desire to work with people and customers. Just because they have the money doesn't mean they are the right candidate for us.

SF: If you look across your network, what traits are shared by your top-performing franchisees?
PI: That's easy. They have a passion for what they're doing, and they're 'buttoned-up' from a business sense. They like franchising - they like the discipline of it and they work within it. And they are good personality-type people. They motivate their staff, they get on well with customers. Issues or challenges don't phase them - they just deal with it and continue on. Above-all they've got a desire to want to make it work.

SF: What's your day-to-day role in the business?
PI: Well it's quite a lot of things at this point in time. I'm overseeing the day-to-day running of the business operationally as well as from a franchising perspective the project managemet right through to store-opening. My partner in the business, he looks after supply, purchasing, coffee-roasting, and the financial side of the business.

SF: How have you set-up your support structure?
PI: We're mainly based in Sydney and we've now got offices in Melbourne and Brisbane. With training, operations, marketing, warehousing, distribution, roasting, and packing, there's probably about 110 people on our team.

SF: 110 people - that's a huge commitment to support your franchise network.
PI: It sure is!

SF: You mentioned you've just opened store 229 - do you maintain any company-owned stores?
PI: Yes we do - our aim is to ideally only own one company store. We have a few at the moment but they have been instances where we've had a great site but haven't had the right franchisee at the time so we've gone ahead and opened it. In cases like this it is on-sold to the right franchisee when we find one.

SF: You have grown a very professional operation and a great brand since you first opened the doors in 1996 - what do you think is the key to growing a successful franchise network from scratch?
PI: I think you've got to have a passion and a commitment. Also you've got to have a big vision. Another thing I've learnt is not to live in other people's mind-sets.

SF: What do you mean by that?
PI: If you take landlords for example. They have a mindset about what rent you should pay, how you should trade, and what you are - and our concept is different. We're not a coffee shop or a cafe. Secondly, if you listen to your customers they'll turn you into something what they're used to - not what you are. But when you expose your business to them they actually like what you do! The same goes for staff, shopfitters or suppliers - they all have mindsets on how they want you to operate and unfortunately you're constantly trying to break these mindsets.

SF: You say Gloria Jean's Coffees is not a cafe or a coffee shop - where are you positioned in the marketplace?
PI: We are in specialist coffee. We don't sell meals. We deal with premium products and our volume centres around selling people a coffee or chocolate-based drink. There's no table-based service - you can't sit down and have a meal and a bottle of wine. Our transactions are take-away or people stopping by for a few minutes. In this country specialist coffee is only a small section of the market but it's growing very rapidly.

SF: Finally Peter, what franchises do you admire most in Australian franchising?
PI: Having had so much exposure to McDonalds in my previous life in the advertising industry I'd have to say they have been the leaders. I don't know their operation up-close but from afar Bakers Delight seem to do things very well too.