Indian coffee board- monthly magazine- In The News - Barista Coffee shelves plan to expand through franchisees

Sterling Group owned Barista Coffee Company Ltd (BCCL) has put its franchise model on the backburner. The franchise route decision to drive expansion was taken soon after Sterling took over the coffee retail chain from Tata Coffee and Turner Morrison last year. However, only one of its 130 outlets is a franchised outlet now. BCCL had even hired PricewaterCoopers and KSA Technopak to chalkout its franchising strategy and identify regions where it could open franchise stores

Industry sources said Barista had to shelve its franchising strategy as it was not able to maintain a consistent quality across its company-owned outlets. According to them, the chain suffered as it had to go through a spate of top management changes. From its original promoter Turner Morrison, BCCL's ownership changed to Tata Coffee and eventually to Sterling Group. Though the franchising initiative was kicked off by opening its first franchise store in Bangalore (which continues to be operational), the plan to develop a franchise network across the country has been 'slowed down' by the company for now. "At one time we had decided to pursue expansion through franchise route but we've slowed that down," BCCL CEO Partha Dattagupta told FE.

According to him, this was being done to 'be better equipped to handle operations'. "We want to get our back-end and operational processes and procedures tied up before a third party manages our stores." he added.

"We have pushed back our franchise model strategy for a while, we will, however invest Rs. 60 crore in setting up company-owned outlets" Barista CEO said. According to Dattagupta.

tile company plans to open 200 stores in the country over a period of 2-3 years. Industry analysts said that adopting a franchise route, particularly in the food and beverage sector, requires overcoming problems like inconsistent quality and lesser control over the franchisee's operations.