Ben & Jerry's To Begin Franchising In Australia

US ice-cream chain Ben & Jerry's has announced a rollout of franchises around Australia, and says it has adapted its business here to avoid the patchy fortunes of companies including Starbucks, Krispy Kreme and Gloria Jean's.

Brand manager Johnny Hammond says the franchise model has been tweaked for the Australian retailing environment which, given our relative higher cost of labour and higher retail rents, is very different to other markets such as the US where Ben & Jerry's has an established presence.

"Many US food businesses have come to Australia and failed because they have tried to replicate what they do in their home market here. But we know the Australian market is different and our model caters for its idiosyncrasies," Hammond said.

Advertisement: Story continues below To address this, Ben & Jerry's has focused its Australian menu on ice-cream products and limited the number of perishable products it uses.

Hammond said the company would roll out the franchise model alongside their own stores, and planned to open those in well-populated areas with high traffic, some in tourism hotspots.

But there's no plan to open stores on every second street corner. "We're looking for a smaller number of fantastic sites in high volume locations," he said.

Phil Blain, the head of franchising at the Business Development Company, said Ben & Jerry's Australian approach was "refreshing and realistic".

"Usually foreign franchisors expect to breeze into Australia, sell a master franchise and sale off into the sunset." US food retailers have had mixed success opening stores in Australia. In 2008 US coffee house Starbucks was forced to close 61 Australian stores and US doughnut maker Krispy Kreme closed 21 of its Australian outlets late last year after being placed into administration.

More recently, the future of 14 Gloria Jean's coffee shops inside Borders bookstores was in question after the book retailer was also placed into administration.

Gareth Pike, general manager of Gloria Jean's Coffees, said although the coffee stores will close "the franchise agreements will remain in place and we are looking for new locations along with preparing financial assistance packages for each partner to assist in relocation".

Hammond said the company was looking for franchisees who wanted to work in the business, rather than investors.

"We're looking for people with a real passion for the Ben & Jerry's brand, not just people who are focused on profits. The business can be very profitable, but that shouldn't be someone's sole motivation for wanting to become a franchisee." Blain agrees with this approach. "In my experience investor franchisees are rarely successful," he said.

Importantly, said Hammond, franchisees have to be an entrenched part of their local community � the Ben & Jerry's brand has a strong philanthropic focus � and have ideas about how to grow the business.

It will cost between $350,000 and $500,000 for a franchise, and agreements will be for a five-year term with a five-year renewal option.

Hammond said the main variant in the price would be the fit-out. "If the site was already a food outlet then it's going to be cheaper to turn into a Ben & Jerry's than a site that was once a real estate agency." Ongoing fees paid by franchisees to Ben & Jerry's � which are confidential � will cover product costs, training for the franchisee and their staff and marketing. Franchisees are asked to contribute a small percentage of retail sales to the franchisor towards marketing.

The initial focus will be on the eastern seaboard. About 100 potential franchisees attended the launch event in Sydney on Monday.

Ben & Jerry's now has four shops but no franchise stores in Australia. Stores are located in Manly and Broadway in New South Wales, Chadstone in Victoria and Oxenford, Queensland.

Its ice cream is sold in more than 22 countries and there are more than 500 scoop shops around the world.

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