Xpresso Delight
Smart50 rank: 24
Revenue: $3.4 million
Growth: 51.33%
Founders: Stephen Spitz, 49; Paul Crabtree, 48
Based: New South Wales
Employees: 2
Industry: Other
Website: www.xpressodelight.com.au
You only need to walk down any city street in Australia to realise that this is nation of gourmet coffee lovers – we drink an estimated 750 million cups per year. But Xpresso Delight founders Stephen Spitz (in right of picture) and Paul Crabtree believed there was a big gap in the market in that the demand for gourmet coffee in the workplace was not being met.
They came up with a simple business model; give business operators a free coffee machine and then charge them $1 for every cup made. Within eight weeks of establishing the company, they realised they had the foundations of a great business and realised the business model that could easily be franchised.
Revenue has grown at an average annual rate of 51.3% over the last two years and hit $3.4 million in 2007-08. It was $2.5 million last financial year.
The company now has 76 franchisees, with goals to take this to 100 by the end of 2008 and 250 by the end of 2012. But despite some obvious attractions with the franchise model – particularly the fact that an average franchisees only needs to spend about five hours on the business a week – Spitz and Crabtree admit that Australia’s skilled labour shortage has made finding franchisees difficult.
The pair believe the majority of new franchisees will come from full-time workers and stay-at-home parents looking for a flexible source of income.
To help with the recruitment process, Spitz and Crabtree have introduced a unique franchisee guarantee, whereby they guarantee franchisees will make a minimum 40% revenue return on capital investment averaged over all installed systems within the first six months or the franchise fee is refunded in full.
