Another Coffee Club closes its doors
THERE'S ONE less place to meet following the closure of another Coffee Club which comes a month after a disgruntled franchisee took legal action against the iconic Queensland chain.
The Coffee Club at Brookwater Village, Brookwater closed its doors last week much to the disappointment of former Ipswich councillor Paul Tully who used to frequent the cafe about twice a week.
The demise of the Ipswich franchise follows the closure of about half a dozen Coffee Club outlets over the past 14 months and in the midst of the chain undergoing a rebrand.
"It wasn't the busiest Coffee Club in Ipswich but it has surprised me," Mr Tully said.
"I am told the rent that was demanded was too high and they ripped everything out.
"It's at the entrance to Brookwater Golf Club and that's the busiest suburban road (Augusta Parkway) in Ipswich besides from the highway which is under Main Roads' control."
The Coffee Club brand is owned by Minor DKL Food Group and its chief executive Nick Bryden said they were always reviewing the locations of their outlets.
"As is the case with all responsible franchise networks, we regularly review our store
locations taking into consideration trade area changes, increases in rent, changes in foot
traffic, demographic shifts, as well as a range of other considerations," he said.
"As part of this process we will close some stores, and open other stores, in consultation with our franchise partners."
A Brookwater Village representative said working on finding a new tenant, but could not "cannot comment on any specifics regarding" The Coffee Club's lease.
He immediately set about reinvigorating the business, surveying existing and lapsed customers to develop a strategy to revive sales in a highly competitive market.
The chain is now undergoing a rebranding of its decor, inventory and overhauling its menu while a new logo will be released next month.
"We looked at what customers were saying … and we needed to work on making the brand relevant, distinct and rewarding which is value for the experience," Mr Bryden said.
"I wouldn't say we were asleep at the wheel but it is a competitive world and you have to embrace change and that includes deliveries.
"We've started to get really good sales growth and the customer experience has really improved and the sense of our value is really good."
The coffee chain started in 1989 and, according to its website, there are approximately 400 stores spread across nine countries and 40 million dedicated customers.
However, Coffee Club outlets at Wilston Village, Sherwood, Nundah, Robina Town and Broadbeach (after 21 years) have all closed over the past 14 months.
The former franchisee at Robina is suing the iconic chain for more than a million dollars claiming the company set him up to fail.
Jeremy Swift, who had operated the popular outlet at Robina Town Centre for 15 years, walked away from the business last month claiming high rents, refurbishment costs and other imposts had left him with nothing.
Mr Swift is now suing The Coffee Club Franchising Company in the Federal Court for breach of the Franchising Code and misleading and deceptive conduct.
Mr Swift, who before buying The Coffee Club franchise at Robina in 2005 was involved in construction management, said at the end he was paying 19 per cent of his turnover in rent when to make a profit Coffee Club accepted it had to be no more than 14 per cent.
He said Coffee Club, which was the lessee over the shop, had offered to negotiate with the landlord about reducing rent but this had not been successful.
Mr Swift said Coffee Club's decision to open an outlet called First Ave, which is also a Minor DKL brand, in the same shopping centre had seriously impacted on his business.
"First Ave was a very similar concept to Coffee Club and they even sold Coffee Club branded products and exact items," said Mr Swift. "They opened that shop even though I had the right of first refusal to operate any other Coffee Club outlet in the centre."
He said Coffee Club also had attempted to enforce over-inflated refurbishment costs onto the business.
"These were minor cosmetic front of house works only," said Mr Swift. "But they attempted to charge $276,000 for 10 days work.
"They failed to provide fixed quotes while refusing to sign the lease renewal resulting in months lost on the lease as I refused to sign off on their excessive estimate price."
The Coffee Club Pty Ltd last week lodged a defence in the Federal Court in Brisbane.
In a statement to the Courier Mail, Coffee Club denied the opening of the First Ave store had affected Mr Swift's sales and had "ensured a competitor was not able to open in direct competition to the Robina store."
In reference to Mr Swift's claim that the company over-inflated its estimate of refurbishment costs, Minor DKL said the estimate was realistic given the scope of the works.
"The Coffee Club revised the scope of works to reach agreement with franchisee," it said. Minor DKL also denied the company enforced unreasonable mark ups on food and said it "used its buying power to secure high quality products at lower prices."