What is an Emerging Franchise?

What is an Emerging Franchise?

If you’ve ever spoken to someone at Oakscale you can tell we live and breathe emerging franchise development. Last year I had the opportunity to attend Springboard which is a purpose filled event in which Franchisors and Suppliers (Businesses that offer Franchisee / Franchisor specific products/services) meet at a conference to discuss best practices, learn from each other, and network to build relationships that strengthen their respective brands in the industry. 

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This event caters to emerging franchisors. In case you don’t know what an emerging franchise brand is, think of it as a startup in the Franchise space. Currently there are over 4000 franchise brands that exist and over 75% of them have less than 100 franchise locations; which I would classify as “Emerging. 

These brands comprise the largest total number of franchise concepts that exist and frankly, as a development company, we segment these brands into the following categories as we come across them:

  • Those who probably shouldn’t be franchising

  • Those that are growing quickly and just aren't at 100 units just yet. 

  • Those that don’t have the right strategy / team in place to sell franchises. 

Many brands in the emerging stage are great concepts that just need to figure out how to partner with great franchisees. An event like Springboard is an opportunity to meet with others who have grown to 100+ locations as well as meet suppliers that help emerging brands with a great model get the support they need to grow. 

At Oakscale, we partner with emerging brands in a long term growth strategy and are constantly on the lookout for the next big thing. So naturally we show up at events like Springboard to meet with brands who have just started or are looking to franchise.

In addition, we are always combing over tons of data (our parent is Metric Collective, after all),checking Yelp, Google, Facebook, Instagram, as well as running ad hoc searches, and TBH, the vast majority of the time we don’t find anything that catches our attention.

However!

The reason we constantly search is that every so often we find an absolute diamond in the rough like our emerging brand Xpresso Delight. 

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You may wonder what a company like ours looks for to figure out how to categorize concepts we evaluate and decide if they are a brand that we can take to 100+ franchise units. 

To give you an idea of how thorough our search is -> here are a few things we look for in brands.

Unit Economics -

The leverage of franchising lies in franchisees’ ability to faithfully execute a concept’s business model and receive just revenue/ returns. 

Repeatable Operations - 

A brand’s service or product must be straightforward for franchisees to learn and deliver consistently.

Scalable Supply Chain

Franchisees must be able to economically and reliably source material for a brand’s service or product throughout any market in which the brand intends to franchise.

Passionate Consumer Base

Strong customer advocates and positive word of mouth are leading indicators of a concept’s breakout potential. Proxies for this kind of early brand equity include online reviews/testimonials, social media activity, and an engaged following.

Strong Executive Team

An executive team with a deep understanding of their industry, the ability to articulate a compelling vision, and the capacity to manage rapid growth are key.

To give an example, the Xpresso Delight brand scored 5/5 for us.

Xpresso Delight is the largest coffee service franchise in the world with over 200 Franchises sold In Australia and New Zealand and just a handful in the United States. The brand made the jump to the United States and realized that although their model was great, targeting the right franchisees was key to growing the right way in the United States (something that is difficult for an Australian based franchisor to do). 

We knew the only thing holding them back was a great development company and so we partnered with them to develop the brand in the United States and take it to over 100 franchise units in the next few years. Currently we are already 10% of the way to our goal with a robust pipeline and are glad to have partnered with a concept that is disrupting a huge industry here in the United States.

Even with our early success, we know there’s a long way to go to reach our goals and we’ll continue to leverage learning opportunities like Springboard to help further the emergence of brands like Xpresso Delight. 

Xpresso Delight's Nigell Lee on the Air with Zack Fishman

Xpresso Delight's Nigell Lee on the Air with Zack Fishman

On July 1st, 2019, Nigell Lee, President of Xpresso Delight USA, joined the Millennial Monthly podcast to discuss how the Australian coffee service franchise is approaching franchising as an emerging brand in the U.S.

Professional Athlete Signs Multi Unit Deal with Xpresso Delight

April 24, 2019 // Oakscale.com // New York, NY - Xpresso Delight, the world’s largest and fastest growing coffee service franchise, with over 200 franchisees worldwide, announced today that yet another new multi-unit franchisee has joined the brands aggressive expansion in New York City. Interest in the booming coffee franchise continues to blossom outside the New York headquarters with several more franchises in the pipeline for markets like Charlotte, Atlanta, Austin, and Los Angeles. However, awarding another 3-unit franchise agreement in it’s own backyard was an easy decision when you consider the laurels of Xpresso Delight’s newest franchisee, Stu Mills, a former professional athlete turned successful corporate executive.

Being a professional cricket player in New Zealand for nearly a decade taught Stu the skills and instilled the values often tied to successful business owners: discipline, competitive drive, teamwork, and leadership. He utilized those skills, along with an MBA in Finance, to earn a myriad of roles at major retail brands over the last decade including both the buyer and seller side of transactions, as well as management. The father of two plans to utilize his education, experience as a professional athlete, and real world business experience to create a successful trio of franchises in New York City.

In his own words, “I’d been looking at franchises for years, primarily in the fitness and children’s activity categories, but I just couldn’t take on the risk of leaving the security of my job to go build a retail business full time. I started looking at franchises that I could grow more passively at the start, and build over time to a point where I could either transition full time to running the business or simply hire someone to manage the operation while I continue building my career. I found Xpresso Delight and it checked all the boxes: Inexpensive initial investment with a huge growth opportunity, it’s not a fad, and it’s good for the environment.”

Nigell Lee, COO & President of Operations for Xpresso Delight Group also shared his excitement about adding a new franchise in New York City: "When someone approaches you to become a franchisee in your flagship market, you take extra care to make sure that they’re a good fit, not just for the franchise system, but for the culture you’ve built in your local market. But it was a no-brainer to bring Stu on from the start and I feel he’ll be a tremendous help to furthering Xpresso Delight’s growth in the New York City office coffee market."

When asked if the infamous rivalry between Australia, Nigell’s home country, and New Zealand, Stu’s home country, was factored into either party’s consideration of signing a franchise agreement together, both individuals replied, “No comment.”

Xpresso Delight franchisees offer high-end café level coffee to corporate offices through its innovative coffee-as-a-service program. Along with its proprietary 100% Arabica coffee blend that is roasted locally in the United States and drop shipped fresh to clients weekly, Xpresso Delight provides fully automated coffee and espresso machines that provide café quality coffee comprised of whole fresh beans ground to order and fresh steamed milk – all at the push of a button - to offices around America.
The brand draws demand from medium to large company offices looking to upgrade their in-house coffee options they provide to their employees at an affordable cost.

Xpresso Delight has partnered with Oakscale, the NYC based Franchise Development company as the brand’s exclusive Franchise Development Partner, and the franchisee worked with Oakscale CEO Joshua Kovacs on the agreement.

About Xpresso Delight

Founded in 2003 and with over 200 franchises sold worldwide Xpresso Delight is one of the fastest growing coffee-as-a-service franchises in operation. U.S operations are led by franchise President Nigell Lee. Xpresso Delight is currently evaluating franchise candidates interested in becoming franchisees in major markets across the United States and internationally. The concept has partnered with New York City-based Oakscale as its exclusive franchise development team. Learn more about Xpresso Delight.

About Oakscale

Founded in 2017, Oakscale is a franchise development company that develops innovative emerging business concepts and promotes them to investors around the world. Learn more about Oakscale.

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Xpresso Delight Brews Up Deal In Buffalo NY

Xpresso Delight Brews Up Deal In Buffalo NY

Xpresso Delight, the world’s largest and fastest growing coffee service franchise, with over 200 franchises sold worldwide, announced today that it has awarded an additional franchise in Buffalo, NY. Interest in the franchise has begun to sprawl out from its U.S. roots in New York City to markets like Washington D.C. and now Buffalo, NY, with several more franchises in the pipeline for markets beyond the eastern seaboard.