Café Donuts launches 60th franchise

From Pequenas Empresas & Grandes Negócios (Small Companies, Big Business)

By the end of 2011, master franchisee plans to have 100 units in the country

The Café Donuts franchises started with the American chain Dunkin Donuts. Present in Brazil for 21 years, Dunkin Donuts closed up shop in Brazil in 2005. However, the master franchisees, Oscar Curi and Gerson Keila, kept the right to use the same recipe, the same factory, and sell the same products. So they created Café Donuts and soon thereafter partnered with the Franchising Ventures Group, owner of the Nobel bookstore chain and other brands, in order to continue the expansion of the cafes.

Today, Café Donuts has 60 signed contracts to open new stores in 12 states throughout Brazil, with 50 units already open for business. Sergio Benclowicz, director of network expansion for Café Donuts, predicts that be the end of 2011 there will be over 100 units in the country. "We are experiencing fast growth; we have opened approximately two stores per month, in other words, 20 to 25 stores a year," he says.

Ever since Dunkin Donuts became Café Donuts it started to diversify its food and drink menu, with juices, snacks, ice cream, salads, and sandwiches. Today the cafes have lighter food options and social areas. There are three kinds of franchises: the kiosk, that serves donuts, coffee, juices and snacks; the coffee shop, that adds quick meals (grilled meats, salads and pasta) and deserts to the basic menu; and the bistro, or "lunch and dinner", that has complete lunch and dinner, as well as all of the previous items mentioned.

A customer spends an average of R$10 at a traditional establishment, and R$20 or a little more for a full meal. Each unit's revenue also depends on the models. "There are stores in shopping malls which serve lunch and dinner that have sales of R$150,000 a month, and there are kiosks inside bookstores that maybe have sales of R$ 20,000 a month," says Benclowicz. According to him, the national sales average is between R$400,000 and R$500,000 per year.

The units have as little as 16 square meters (kiosk) of space all the way up to 160 square meters, and allow the franchisee to open a Café Donuts in places like shopping centers or even bus stations. The network offers support - from the choice of store location and architectural plan to the training of employees and the franchisee himself/herself.

Costs of a Café Donuts franchise:

Business type:  Cafeteria

Company founded in: 2004

Initial investment: From R$77,000 to R$218,000

Franchise Fee: From R$20,000 to R$40,000

Royalties: 5% of gross sales

Working capital: From R$15,000 to R$25,000

Advertising fee: 3% of gross sales

Average monthly sales: R$35,000

Net income: 15%-20%

Average time of return on investment: 2-3 years

Contract period: 10 years

Regions of interest: Brazil

Franchisee support: Helps in selecting and negotiation of store location, employee selection, franchisee and employee training, on-site store building assistance and architectural plan.

Email: franquias@cafedonuts.com.br

Website: www.cafedonuts.com.br

Telephone: + 55(11) 3706-1494

Source: Café Donuts

* This article appears on the site of Pequenas Empresas & Grandes Negócios & was translated without any consent whatsoever. The franchise will be happy, however, and I hope to be served free coffee and donuts for life.