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How does a former South African volleyball participant and a Serbian ex-policeman develop a novel Johannesburg-based bakery into one of many largest restaurant franchises in South Africa? Doppio Zero co-founder Paul Christie explains how a largely opportunistic – moderately than strategic – strategy to progress has yielded such success within the South African restaurant area.
Born to entrepreneurial Greek-South African mother and father in Johannesburg, Paul Christie grew up in a household that “always had some sort of store”, be it a espresso store, comfort retailer or takeaway outlet. After finding out enterprise on the University of Cape Town, Christie launched into a working tour of Europe, earlier than returning to Johannesburg in 1992.
Leveraging his formal {qualifications} and household experience, he spent the next few years establishing a number of new companies throughout the town, together with a comfort retailer and fast-food outlet, a mineral water bottling firm, and three espresso outlets.
On the hunt for his or her subsequent enterprise, in 2002 Christie and his Serbian enterprise accomplice and pal, Miki Milovanovic – a former policeman, serial entrepreneur and baker – recognized a location within the fashionable suburb of Greenside.
“We really liked the location in Greenside and wanted to open a restaurant, but it didn’t have the correct zoning, so we needed to either open a bakery, deli or butchery,” Christie tells How we made it in Africa.
“We decided to go with the bakery option because of Miki’s experience, as well as the fact that it had a day trading licence that would allow us to have a few tables and chairs, and sell coffee and light meals. So, establishing the bakery was really by default.”
Establishing the flagship
After securing 50% of the required funding from industrial banks, Milovanovic reached out to a personal Kroonstad-based funder he had beforehand performed enterprise with who agreed to supply the stability of the capital wanted.
While the personal funding was topic to a greater rate of interest than that of economic financial institution loans, Christie says this allowed them fast entry to operational capital.
“The big take-home here is that we were privileged enough to have an independent funder who could assist, which is very rare. He continued to back us for many years and we worked very hard to maintain his trust. He didn’t ask many questions and was able to wire us the money required almost immediately, which is in contrast to traditional bank funding, which often takes several weeks to be approved,” Christie explains.
The companions had been capable of buy bakery gear at round 10% of its actual worth from a lately failed bakery enterprise in a close by suburb, decreasing setup prices.
Scanning by an Italian cookbook, the duo selected the identify Doppio Zero, which denotes the grading of a very high quality milled flour utilized in pasta, pizza and bread. Their imaginative and prescient was to ascertain a Mediterranean-inspired sit-down bakery with an modern, down-to-earth and beneficiant café tradition.
“We opened the bakery with a few tables and we got a bit of resistance from local residents because they were aware that we didn’t have a zoning for a restaurant, but we managed to fly under the radar because we were a bakery, and we just expanded from there. We got to know the community, we stuck a few more tables in and eventually we grew into a big café bakery,” says Christie.
After a number of months of worthwhile buying and selling, the duo efficiently lobbied to have the zoning modified to a restaurant premises, which afforded a liquor licence and allowed the enterprise to begin buying and selling within the night.
Recognising the replicability of the Greenside Doppio Zero restaurant, the companions started investigating new premises at which to ascertain further model shops about a yr after opening the Greenside department.
“It was more of an opportunistic decision to expand than a strategic one. We found a location in nearby Bedfordview that we liked, so we acquired funding through commercial banks and our private funder and opened a new Doppio Zero outlet. This was soon followed by another outlet in Johannesburg’s northern suburb of Fourways.
“Within two-a-half-years of opening our first Doppio Zero, we had three successful self-owned restaurants, establishing the Doppio Group of restaurants,” he notes.
But the primary years of multi-store possession weren’t with out their challenges. The duo had but to develop a administration and operational framework for every department, leaving every restaurant closely reliant on the efficacy and dedication of the person department managers.
This offered a chance to additional make clear the model imaginative and prescient and to introduce a growth-driven franchise mannequin.
Creating a franchise mannequin
The institution of Doppio Zero’s franchise mannequin was largely a trial-and-error course of, explains Christie.
“We opened our fourth restaurant in Rosebank, Johannesburg, through a joint-venture (JV) partnership, which proved to be very successful. This gave us a lot of confidence in JV franchising, and we then sold our Bedfordview and Fourways stores using this JV structure,” he says.
In the 20 years since first opening, the enlargement of the Doppio Zero model has been achieved by a mix of company partnerships, franchises and JV partnerships.
“We weren’t sitting on a pedestal in head office, we were running our own stores, so we understood the pain points and challenges,” says Christie.
He explains that establishing good relationships with franchisees and guaranteeing constant model high quality proved initially difficult, owing to the nuance of the model.
“Our brand is quite complex – it’s not a simple brand. And with franchising, the simpler the concept the easier it is to franchise. You also have a restaurant that requires an experiential factor, so lots of personal interaction was needed.
“For this reason, most of our early-stage franchisees weren’t actually the right people for the job, as many were looking for a quick investment or an easy business. The pioneer franchisees are rarely the long-term franchisees and you’re forced to make compromises and concessions,” he notes, including that he has since de-franchised eating places that weren’t upholding the required commonplace.
Developing a agency model imaginative and prescient
With the assistance of South African franchise consultancy Franchising Plus, Christie developed a franchise information that outlined the necessities and options vital for a profitable Doppio Zero outlet, in addition to an operational and administration guide.
The franchise mannequin centres on the supply of high-quality espresso, recent Mediterranean-inspired breakfasts and lightweight lunches, in addition to freshly-baked artisanal bread, muffins, confectionary, pastries and pizza.
The splendid Doppio Zero location is in way of life centres in well-established areas with quick access to upmarket, high-density residential areas and/or high-density workplace environments.
With a minimal inside floorplan of between 350m2 to 500m2 and a minimal of 100 m2 in out of doors, or ‘al fresco’ garden-style seating, the websites must be appropriate for a mixture of handy morning, day and night commerce and ample and easily-accessible parking.
“Each restaurant has its own unique personality, with a marketing strategy centred around strong community involvement and seasonal campaigns. Every season, we revisit the menu with fresh ideas and seasonal foods,” says Christie.
Doppio Zero shops with out an in-house bakery are required to buy completed bakery merchandise from Doppio Foods – the group’s central bakery, positioned in Kya Sands, Johannesburg.
Doppio Foods additionally serves as a central kitchen and distribution centre from which franchisees are required to buy obligatory merchandise akin to Italian cheeses, roasted espresso beans, Farina 00-graded flour, olive oil and tinned tomatoes. This distribution centre additionally providers different unbiased eating places and grocery shops.
“While our franchisees have certain products that they must buy from us, if it is not considered a mandatory item and they can find it for a better price elsewhere, we will test it and approve it, should it meet quality requirements,” he notes.
After the institution of their fourth Doppio Zero retailer, the Doppio Group determined to broaden its presence and set up a pizzeria-based restaurant, Piza ē Vino. Again, this was a determination pushed largely by alternative moderately than technique, as Christie explains.
“We signed a lease for a site for a new Doppio Zero in Melrose Arch, in Johannesburg, but quickly realised that the location wasn’t right for a bakery-style restaurant. That’s when we decided to establish a pizzeria.
“A consultant assisted us with the concept and we brought on a local celebrity chef for the menu development and a Sardinian chef to perfect our pizza. We have since opened a total of 10 Piza ē Vino outlets nationwide, including in Pretoria and the Western Cape, using the JV and franchise model.”
The impression of Covid-19
With the onset of Covid-19-induced lockdowns and buying and selling restrictions in South Africa, Christie says the group was pressured to shut its whole assortment of eating places for 4 weeks.
The Doppio Group misplaced upwards of half a million rand in inventory and needed to lay off over 970 of its staff – not counting the roles misplaced in franchise shops. Since then, they’ve re-employed 80% of their authentic workforce.
“After about a month we were allowed to start limited takeaway trading. Our suppliers were amazing, and agreed to only charge us for the supplies we needed at the time and not hold us to hefty long-term purchase agreements,” he says.
On the entire, landlords had been additionally largely supportive, with most offering some type of hire aid, whereas the group additionally acquired a partial insurance coverage pay-out from insurer Santam.
“This saved us,” says Christie.
Industry group The Restaurant Collective, of which the Doppio Group is a member, lobbied authorities in August 2020 to defend South Africa’s foods and drinks trade by easing restrictions and permitting alcohol gross sales. At the time, a 9pm curfew was in place throughout the nation and no alcohol gross sales had been allowed.
“At least 70% [of South African restaurants] have had to retrench employees to save costs, and 40% have not received any form of government loan or support. Sit-down restaurants are limping since opening on June 29 [2020]. Most are trading below 50% of usual turnover. This loss of cash flow has depleted businesses and individuals of any reserves, and timing is now critical,” the grouping mentioned in its attraction.
For the Doppio Group, solely one of many group’s eating places – its Piza ē Vino retailer, in Stellenbosch – was pressured to shut over lockdown as a consequence of “landlord issues”.
“Otherwise, we were okay. It was tough and we gave our franchisees a lot of breaks in terms of royalties and fees when we reopened,” notes Christie.
“Some of our restaurants are trading at higher volumes than in 2019, while some have just caught up and a few are still lagging. The stores based in malls took the biggest hit.”
In the 12 months ending February 2022, the Doppio Group employed 1,365 staff (together with franchises) and served 2.55 million prospects.
Rebuilding and innovating
Christie says the group is now specializing in rebuilding its operational crew post-Covid-19, rising its new model acquisitions, and introducing new, modern and experiential ideas to its older eating places.
The group can also be seeking to create a separate advertising and marketing and operational perform for every model (Doppio Zero and Piza ē Vino) to forestall unintended model overlap.
“The one mistake that we can make is to try and run all the brands with the same marketing and brand operations teams, which makes all the restaurants very homogenous.
“We also lost a lot of our operational team after Covid-19, so we’re looking to build the group’s support structures up to back where was – and better,” he notes.
Currently, 15 of the 30 nationwide Doppio Zero shops are group-owned (together with JVs), whereas 15 are franchise-owned. In phrases of innovation, Christie says his biggest problem is in conserving the model recent and related.
“I’m debating whether we should have so many company stores, as it [distracts] our focus from running our own business at a group level.
“When you first open, you are super trendy, but once you start growing and expanding you lose a bit of that ‘wow’ factor. We are working hard at innovating and keeping our menu relevant and investigating what the next great front-of-house customer experience will be.”
One such intervention might be seen at Doppio Zero’s Rosebank restaurant, the place the smoking space has been remodeled into the Jazz Room, which performs host to jazz musicians and gives a various drink and cocktail menu.
The group additional plans to scale back the general dimension of its Doppio Zero venues, refurbishing them into smaller venues which might be simpler to franchise.
Brand acquisition and diversification
Additional progress plans for the Doppio Group embody buying aligned unbiased manufacturers and testing new franchise fashions.
Doppio lately acquired a majority stake in sustainability-focused well being meals retail manufacturers Fresh Earth Food Store and Fresh Earth Bake House. The enterprise at the moment has two meals shops and eateries in Blairgowrie and Emmarentia, in Johannesburg, with plans to broaden the model into different retailers and on-line.
“I really like the health category, and I think there are some great growth opportunities in this segment, so we’re in the process of strategising,” says Christie.
In addition, earlier in 2022, the group opened a standalone Indian restaurant and gin bar in Rosebank known as Modern Tailors, which Christie says will likely be used as a mannequin for attainable enlargement into different regional meals choices.
“We’re looking for the right people to bring on board and then replicate this model across three of four different food offerings, such as Asian and Latin American,” he notes.
While the variety of unbiased eating places in South Africa have elevated post-Covid-19, Christie believes there nonetheless stays good demand for franchise shops, pushed by a massive rising center class.
Hoping to reap the benefits of the rising marketplace for quick meals, in May 2022 the Doppio Group opened its first fast-food providing in Rosebank. Inspired by Dutch and Belgian avenue meals, Doodles gives a to-go ‘loaded fries’ menu.
In addition, Doodles – at underneath R1 million (about $64,000) a retailer – is way cheaper to franchise than Doppio Zero (R7 million or about $447,000) and Piza ē Vino (R5 million or about $319,025).
“Our aim now is to refine the Doodles working model and make it simple and easy to franchise, and I’m quite excited about it,” enthuses Christie.
“It’s chips, and let’s be honest – we all like chips.”
Doppio Zero co-founder Paul Christie’s contact info
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