Vanderhorst took on his current role in mid-2008, with an emphasis on steady, long-term growth, rather than on outpacing competitors in the specialty coffee market.
“We don’t need to make any rash decisions just to increase our numbers,” he says. “We want good real estate and we want our existing franchisees’ business to grow.”
This strategy has included new first-year marketing budgets for starting franchisees to help drive business to them, as well as a new royalty incentives program for existing franchisees taking on additional locations. Brokers are also better-informed when screening potential locations for the right demographics, access and visibility.
This pick-and-choose approach follows a period of what Vanderhorst calls “natural attrition,” when some older cafés closed because they were no longer in commercially viable zones. Nevertheless, he is optimistic for new franchise opportunities.
“We’re well-established in other areas too, like the Atlantic provinces, which might be our next region to focus on,” he says, “and we haven’t branched into suburban development yet.”
Another method of growth involves what Vanderhorst calls “key account relationships” with existing institutions that incorporate Second Cup products and services, such as universities, hospitals and recreational centres.
“We’re reaching out into this market,” he says. “About half of the locations are opportunities for our franchisees, while the other half involve relationships with the facility managers operating the service. You can even see one person bringing 50 brands into the same venue. And if it’s somewhere like a university, we can begin to establish loyalty with younger customers.”