Expansion plans for ice-cream franchises in Australia are heating up with Baskin-Robbins announcing plans for another 200 shops in Australia over the next 10 years, tripling the chain’s presence in the country.
On a smaller scale, relative newcomer to the market Ben & Jerry’s is planning an additional 30 stores across Australia.
Baskin-Robbins has entered into a master franchise joint agreement with Galadari Brothers, the parent company of Galadari Ice Cream Co, which is a long-time Baskin-Robbins licensee for the Middle East.
The tie-up comes after former master franchise Allied Brands was stripped of its Australian franchise rights for the Baskin-Robbins franchise by the US owner of the brand, Dunkin’ Brands.
Dunkin’ Brands will maintain a 20% stake in the new joint venture while Galadari will be primarily responsible for day-to-day operations in Australia.
Galadari will open additional franchise locations as well as corporate-owned and operated stores, with each company jointly contributing $2 million over the next three years for marketing.
“Galadari has done an outstanding job of making Baskin-Robbins one of the pre-eminent ice cream brands in the Middle East, and we believe they can do the same in Australia, one of our high opportunity markets,” said Giorgio Minardi, president of Dunkin’ Brands International in a statement.
Ben & Jerry’s is also expanding in Australia with the opening of its fourth Scoop Shop franchise on the Gold Coast.
The expansion of the ice-cream chain into new states is part of a larger rollout plan, introducing Ben & Jerry’s packaged product and franchise outlets into new states with up to 30 franchise shops across Australia planned.
Launched in Australian in 2009, Ben & Jerry’s brand manager Kalli Swaik said in a statement the plan is to make the brand available across the nation.
The ice-cream chain aims to open up in key sites along the east coast including Circular Quay, Darling Harbour and Sydney CBD in New South Wales, Melbourne CBD, Southbank and St Kilda in Victoria, and Brisbane CBD, Broadbeach, South Bank and The Valley in Queensland.
“We’re on the hunt for a team of dedicated Scoop Shop owners to help us spread peace, love and ice cream across the country,” Swaik said in a statement announcing the expansion.
Jason Gehrke, director of the Franchise Advisory Centre, told SmartCompany Baskin-Robbins’ ambitious plans were achievable provided it was prepared to invest enough.
“That will substantially increase their chances of achieving that growth target but it is not going to happen without a significant commitment of resources on the master franchisees behalf,” he says.
“Baskin-Robbins is a mature brand in the Australian market today so the question is: What is new and different about this agreement that will cause a stampede of franchisees?”
In contrast, Gehrke says Ben & Jerry’s is a new player on the market and one that has been relatively conservative in its initial approach.
“So that relative newness and perceived vibrancy will be its competitive advantage in appealing to the market,” he says.
“But these businesses are all affected by seasonal variations and consistent high temperatures are very good for these kind of businesses but one or two cool summers would quite severely impact a franchisee turnover.”
Gehrke says there are already plenty of well-established ice-cream franchises in Australia and an additional 230 stores will add to the already hot competition for ice-cream customers and for sites.
“Often you find the more players in a market, the bigger the market segment becomes. The question is can everyone make money out of it,” he says.
“These businesses are all going to be competing for sites as well and if you have multiple brands competing for the same locations that may have the knock-on effect of pushing up rents where rents are otherwise stagnating.”
This story first appeared on SmartCompany.
Cara Waters is the editor of SmartCompany. Cara was previously a senior reporter at the Financial Times website FT Adviser in London and has also worked for The Sunday Times.
