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Coffee Club eyes Groove Chain, Coffee Hit

NZ NewswireNZ Newswire 5/09/2016 Fiona Rotherham

Cafe chain The Coffee Club plans to become a "mini-Restaurant Brands" by bringing in Australian franchises The Groove Chain and Coffee Hit early next year.

In 2005, Brad Jacobs and Andy Lucas, then aged 25 and 24 years respectively, brought The Coffee Club to New Zealand from Australia, opening their first store in Lower Hutt's Queensgate mall.

It has since grown to become the second-largest cafe brand, marginally behind Kiwi franchise Columbus Coffee, with its 60th store about to open.

The pair are now investigating bringing in two other franchised brands held by The Coffee Club's Australian owner, Minor DKL Food Group.

The Groove Train is described as an "urban dining experience", while Coffee Hit is an upmarket roasted coffee cafe.

They've got an agreement in principle from the franchisor but are still assessing local franchisee demand for the more expensive The Groove Train which would have an upfront cost of about $1 million.

They've just signed another 10-year franchise with Minor DKL for The Coffee Club and plan to expand the chain to around 93 stores within the next seven to 10 years, mainly outside of Auckland.

Mr Jacobs, who is also chairman of the NZ Franchise Association, says it is more difficult to find franchisees outside of Auckland where higher-priced houses make it easier to offer security against any borrowings.

They want to build up multiple retail brands as has Restaurant Brands, which owns the local franchisor rights for KFC, Pizza Hut, Carl's Jnr and Starbucks, though don't have a goal to become a public listed company.

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