The growing South African coffee industry offers investment opportunities that the serious investor should take note of.
One of these is an investment of R1,58 million (excluding VAT) in a profitable The Daily Coffee Café franchise.
These investors can expect to receive a higher-than-average return on their investment.
This earning power is further enhanced by the fact that the capital needed for the set-up costs is considerably lower than that of comparable franchise models in the market.
Why invest in the coffee industry?
Worldwide – including in South Africa – the coffee industry has become a landscape where a modern way of living and a growing number of coffee enthusiasts create an increasing demand for good coffee and branded lifestyle coffee destinations.
Furthermore, the Covid-19 pandemic has created a shift towards a so-called “new normal” in the workplace.
Corporate employees are increasingly working from home, and will continue to do so, even when the pandemic is something of the past.
In South Africa this new workplace reality already created a demand with those who work remotely to also have a convenient workspace – other than the home office – from where they can work for shorter periods of time.
For this a well-located coffee café which offers the convenience of laptop workstations, 230 Volt and USB power supply, as well as free Wi-Fi, is favoured, along with the benefit of being able to order coffee and refreshments.
The demand for these neighbourhood coffee destinations is aptly illustrated in the fact that, unlike many other businesses in the hospitality industry, none of The Daily Coffee Group’s franchises had to close down over the past two years due to the impact of the stringent Covid-19 lockdown measures on the restaurant industry.
Even more enlightening is the fact that the Group was able to open 11 new franchises during this time, which demonstrates the demand for coffee café destinations, in addition to the investment growth potential under these new normal circumstances.
The above trends created a shift in the nature of the typical and bygone coffee shop of yesteryear.
The modern-day coffee café has become a vibrant community and neighbourhood destination, and a space to meet with family and friends, to discuss and clinch business deals, and to work from when not at the office.
This is where the action is at community and micro-society level, where the money is spent, and where an investment in the coffee industry offers dividends!
The coffee café has become a resource for the community.
It serves as that important third place, not where people work or live, but where they spend time to regenerate, to interact with others, and to continue to be productive in the workplace. People need that.
Why partner with The Daily Coffee Group?
The Daily Coffee Group is a truly South African coffee franchise business with 32 franchises countrywide, set to further expand nationally.
Adriaan de Bruyn, CEO of The Daily Coffee Group, opened the first The Daily Coffee Café in 2013, and two more in the two years that followed.
De Bruyn conceptualized, set up and personally managed these coffee cafés himself until he was satisfied that The Daily Coffee Café would be a successful franchise model.
He expanded the operation into a franchise business in October 2015, under the name The Daily Coffee Group.
The collective background of the Group’s executives comprises qualifications and expertise in the hospitality industry, operations, finance, retail, marketing, interior design and corporate governance, as well as a sound understanding of the nature and running of a coffee café franchise.
This is encapsulated in the following unique selling points:
- Coffee is our business
We know coffee, we know coffee lovers’ requirements, and we make sure they get what they want.
To do so, we roast our proprietary coffee blend with state-of-the-art coffee roasting equipment which is linked to automated roast profiles for consistency and quality.
- We’ve done our homework
Thorough research and reasoning went into creating the distinctive look and feel of our coffee cafés – an ambience that captures the essence of café life prevalent from Cape Town to New York, but packaged in a way that resonates well with South African clientele.
Part of this is the pleasing and much talked about New-York-meets-Karoo décor of our coffee cafés – a theme which takes patrons on a visual journey where they can expect to encounter hints of upmarket Big Apple urbanism, combined with down-to-earth Karoo appeal.
- A destination for every taste
Our coffee cafés transform into what individual patrons want them to be.
We offer seclusion to those looking for a me-time breather, a professional setting for business discussions over good coffee, a relaxed environment where people can meet and where friendships are strengthened, and well-appointed laptop workstations where those who need to stay in touch with their office and customers can do so.
Informal and casual, yet with a corporate elegance and flair.
- Spot-on locations
We prefer to select smaller, accessible and modern boutique-style shopping centres as locations for our coffee cafés.
Not only does the upmarket nature of these premises complement our trendy style and approach, but it especially enables us to be at – and become – the nucleus of microeconomic-level activities in the community.
- Franchisees have leeway
We allow franchisees a certain leeway as far as their menu offering goes.
Apart from our standard menu, we also have monthly blackboard specials which offer patrons an even wider variety to choose from.
Franchisees, furthermore, are allowed to offer menu items specific to the taste and requirements of their particular customer base.
- A flexible franchise fee
Franchise fees are not fixed, but linked to turnover.
This greatly assists franchisees in their financial planning, and as far as cash flow goes.
Furthermore, with franchise fees linked to turnover, the franchisor and franchisee both have a vested interest in the success of the business.
Let’s talk moolah!
- How much do I have to invest before I can open my doors?
The Daily Coffee Group offers two franchise models:
- The Daily Coffee Café: The cost of this franchise model, including the joining fee, is R1,58 m (excluding VAT). An additional R60,000 is required as initial working capital. Each coffee café covers on average 100 square meters of floor space, with seating for up to 60 customers. It is offered as a full turnkey, business-in-a-box option, which can be up and running within six weeks.
- The Daily Coffee Express: This model has been developed exclusively for fuel retailers and for forecourt convenience shops. Set-up costs vary between R200,000 and R500,000, depending on site preparation and the nature and type of equipment required.
- What are the ongoing fees? How do your royalties and marketing fees work?
Management service fees amount to 6% of turnover (excluding VAT).
- What profit margins can I expect?
Coffee Café franchisees can expect a net profit (before tax) of around 22% of turnover.
The amount is determined by a number of factors, including whether they manage their franchises themselves, or whether they employ a manager to do so.
We discuss these factors in detail with potential franchisees.
- What about ROI?
With a forecast annual return on investment of 38%, new investors should see their initial investments recouped within just three years.
The Daily Coffee Group’s future growth is based on a carefully conceptualized and managed strategy.
It is furthermore driven by our passion for people and an underlying desire to offer The Daily Coffee Café experience to more and more clientele to come home to for social or business reasons, or to have a convenient alternative workplace in the “new normal”.
We currently have new franchise opportunities in Gauteng, the Free State and the Western Cape, and will be welcoming applications from individuals wanting to invest in any of these.
Discover your future today in our range of remarkable franchise investment opportunities.