Aroma Kava franchise in Ukraine. Coffee franchising. Brand and marketing
– starting the coffee business in Ukraine
– challenges and competition
– franchise company analysis
– developing your own concept
– the future of the Ukrainian franchise brand
What is a Franchisee?
The franchisee is a network partner who received the rights to use a Trademark, know-how, the concept of a venue, and a business model. It is worth remembering that in most cases, the head office is not involved in operational management, and in case of any difficulties, the franchisee eliminates them independently.
Open a coffee shop under the Aroma Kava franchise or developing your own project? Probably, each of us has thoughts about opening our own coffee shop or a small outlet selling espresso and cappuccino with homemade pastries, croissants, and buns. You will definitely need to study the coffee market and find suitable premises for a coffee shop at first.
If you are reading this article, then you are the person who thinks 5 years ahead, has your own creative vision of the concept of an institution and feels the strength to create something more than opening one coffee bar under the same type of network brand.
Proriat Hospitality Partners, a Ukrainian management company that specializes in hospitality real estate, opening, and managing catering establishments.
Aroma Kava is one of or even the largest coffee shop chain in Ukraine. More than 200 units have been opened in regional centers: Kyiv, Kharkiv, Odesa, Lviv, Dnipro … and regional cities with a population of up to 200,000.
Without a doubt, the brand was able to gain a strong position in the coffee market. Good product at a price lower than that of independent coffee houses, location in the central parts of the city with abundant pedestrian and transport traffic, partnership with landlords. This is just a small list of facts that have helped Aroma Kava win the trust of consumers and investors.
Why does a successful business model is not trying to expand to foreign markets, Poland, Moldova, Romania, Russia?
The answer most likely lies in the lack of time and competent employees who would deal with this work. Lack of brand awareness. Lack of partnership contracts with a management company that can provide business development on a new horizon. Of course, this is not a small investment to hire someone who will only deal with international contracts. The salary of a franchise director starts at UAH 100,000, plus a similar budget needs to be planned for initial marketing.
Note. At the moment, not a single Ukrainian franchise is represented on the Russian market, although Russian brands are successfully operating in Ukraine.
What is the cost?
A lump-sum contribution of 75,000 hryvnias and only 2% of royalties, you will surely be delighted to hear. But it’s worth pondering why the percentage of marketing royalties is missing? So you will need to take care of this yourself. Also, the low cost of the franchise is due to the fact that you will be required to purchase only their coffee for sale at your coffee point. You should understand that even if your regular customers no longer like the coffee for some reason, you will not be able to switch to another supplier.
Tastes and needs are constantly changing, which means that if the age group 18-24 loves to drink coffee today in Aroma Cava, then it is not a fact that such loyalty will continue in a year since the number of brands is regularly growing. You won’t even have time to notice when a coffee shop format with a more interesting concept and relevant offers opens up next to you. A restaurant, bar, or coffee shop opens for at least 5 years in order to have time to return the investment in the first 1-2 years and then bring the expected profit.
Therefore, in the franchise business, investments in marketing today mean loyal customers tomorrow, says Kyryll Ushakov at Proriat Hospitality Partners.
What can be the disadvantages of a franchise
The main disadvantage that franchisees face is the complete impossibility of making changes to the format of the establishment of the range of products. For example, after a year you have already learned about your local guest and his needs. And you understand that you need to add some items to the menu in order to increase the average check, and therefore profit. But the head office will send you a warning letter that this is not covered by the Aroma Kava standards! Tomorrow a soft drink company comes to you and offers cooperation. Placing your logo on the menu for a monthly payment of 10,000 hryvnias (easy money), but would violate the agreement on the right to use the trademark.
The most painful thing real estate agents have to deal with in Proriat Real Estate is the sale of a franchise business. In most cases, it is impossible to find a buyer for it, or the head office will not give you such an opportunity at all. As a result, you will be forced to close the establishment with big losses, as our recent client, a former franchisee of one of the Asian brands, had to do. By turning to independent experts, he could have avoided such losses. The investment amount was $ 50,000
The next moment, management. During the standard activity of the institution, you will have a rotation of line personnel, barista, waiter, administrator, accountant, etc. Lack of discipline in compliance with standards or low professionalism of your employees, you will be responsible for all their mistakes and reporting to the head office. It must be remembered that buying a brand and opening a coffee shop is only half of the work done. Competent day-to-day management, analysis of consumer demand, study competition and get the latest trends in the restaurant business. Forecasting and increasing sales. And most importantly, control, control, control can guarantee the return on investment and the desired profit.
The future of Aroma Kava
It can be seen that the number of the opening of new franchise coffee shops has decreased significantly compared to the level in 2018. Lack of a budget for marketing and investment in a future client can greatly displace the brand’s position in the Ukrainian market. Every organization goes through five development cycles: start-up, growth, maturity, decline, and rebirth. Statistics for Ukraine show that the average life of a company is 8.4 years, a restaurant is 4-5 years. Aroma Kava was founded in 2014, which means that it will be difficult without a new strategy or consolidation with the management company that will strategically develop the brand along with the coffee shop chain. You can view available premises for both rent/sale following the link…
FreshLine is now in a downturn cycle, its establishments are actively continuing to close throughout Ukraine. We have described some of their commercial activities in our next article, which can be read here.
Brand creation and development require a huge amount of time, a strong team of professionals, creative thinking, and financial competence in the successful management of an enterprise. Proriat Hospitality Partners has been in the restaurant industry for over 10 years, bringing together the best specialists in their field to solve complex issues. Our team will provide not only effective management for the existing establishment, but also create a from the ground a new product with its further development in the domestic and foreign markets.
Our team at Proriat ready to tackle complex tasks, search and generate ideas to create profitable solutions that provide stable profit, and up to 20% ROI (return on investment).
We create, We optimize, We manage!
Become a partner and get results!