The bakeries here are fantastic.
They are. We’ve been open six weeks and last week we did 3,600 customers for the week. So we’re probably doing two and a half times what the average bakery does in Queensland already.
What’s the potential for international expansion given that Queensland’s behind?
I haven’t actually got a lot of intention to expand outside of Queensland. I want to build four or five bakeries, turn over $8-10 million a year and live happily ever after.
I’m going to talk to you in two years and we’ll see if you’re happy still with that vision.
We won’t be franchising.
No you won’t, the king of franchising won’t franchise.
Well the thing is if you’re going to build one, you’ve got to build 200. If we’re going to build 200, I have to set aside the next 20 years but then I’ll be 66 and that’s really not where I want to be. And if you have a bit of a look at your picture you go okay I’ve got my investment sitting over there and I’ve got my property sitting over there and I own this house and I own this and that and I go – now what am I going to do? Right okay let’s go and build half a dozen bakeries, put in some good people, make sure it’s managed well, great cashflow business and have some fun. I mean I could sit back on my arse and just live off my investments but it’s just really not invigorating. And I’ve got to say that probably the last five months since we’ve been building this, I’m having fun again.
And are you having good coffee in there? I mean the Queensland coffee I have to say Tom needs improvement.
We’re actually bringing in our coffee up from Sydney.
Put in a coffee culture up there. It’s better than it was but being a coffee snob from Melbourne…
That’s alright I’m a born and bred Victorian so you can say what you like.
So what do you expect revenue wise, are you $8-10 million and you’re set?
I reckon we can build probably four to six of these and do a turnover of up to $50,000 a week out of them and put some good systems in place and give some great service from both ends.
And I bet within a year a few people would have come to you and say give me the franchise for this, I can do a great job out here and you will have done it.
No I’d actually have 100 grand on you that I won’t.
I’m not going to bet 100 grand.
I say this to a lot of people; if you’ve got four burger shops that are really doing well, great. If you want to go into franchising, it’s like the difference between being a motor mechanic and a gynecologist. I mean they are entirely different businesses. I mean you think you might know that you’re working on a bunch of stuff, but you don’t, you need to bring in expertise.
It’s like in media the difference between a subscription paid model and a free model or an advertising model. They’re different businesses.
We would go through periods of five and six years when I owned Eagle Boys making no money at all. I mean just pouring it all back in and building infrastructure and employing people and building training modules. Luckily enough there was decent pay out at the end when I got out because it was a long grind to get to build 250 stores throughout Australia and New Zealand and then saying gee what have we got for this? Not a lot, hopefully there’s some pay at the end because all we’ve got is a great business that looks good with a good cashflow. I mean it’s a very difficult business being a franchisor in Australia.
Very interesting. Is it easier in other places because of bigger populations or what’s the difference?
I spent years studying in the US and I reckon half the yanks are successful despite themselves, I really do. I just think there’s such big numbers over there and it’s just a different consumer market.
Okay so you’re set on the future. I mean you’ve got a really good nose for opportunities. What are the other opportunities in the retail and franchising sector? If you hadn’t chosen this one, what else is tempting?
I actually thought that the charcoal chicken business is a very untapped industry. Particularly in Queensland. I’ve got a few mates down south that have just made small fortunes out of them and done very well and I looked at the industry but decided to stay away from it based on the fact that it’s a night business and I really didn’t want to run another night business. But I haven’t looked broadly, I’ve looked very closely and said my area of expertise is food and that’s really where I’ve stuck and looked at it. But look there are some great businesses out there whether they are Muffin Break or whatever it is. It boils down to two things: location and who’s running the place.
Always does, thanks for your time today.
You’re welcome Amanda.
We’ll catch up in a year and we’ll see who wins the bet.
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