Brothers Greg and Darren Factor started up Planet Chocolate in 2005. Now with five stores in Victorian shopping centres (two company owned and three franchised), the company is planning significant growth in 2011 and beyond. The brothers spoke to StartupSmart about their start-up journey so far.
What gave you the idea for the business?
Darren: I’m a chef by trade and I’ve always wanted to run my own business. I noticed that chocolate was becoming a very popular sector, but in a formal way. It was being sold in a premium category and we thought we could do it in a more fun way.
How did you go about starting the business?
Greg: We funded it from our savings and then retained earnings. There’s always a significant amount involved when you’re starting a business but you get out what you put in. There was a lot of sweat and hard work.
Darren: We wanted something that was fun, so we went to graphic designers and came up with a brand that could appeal to young and old alike.
Initially, we didn’t do much advertising, so we did cheap marketing initiatives such as colouring in competitions or paint your face days. That really attracted the young generation and mums.
With sourcing products, we overpaid, which was a learning curve. You have to make sure you get the best deal with your supplies. Once we had two stores up and running, we went to DC Strategy to launch franchised stores.
Why did you decide on a franchise model?
Greg: We looked at various models and franchising was the best fit. An owner-operator is passionate about the business and it gives you elements of a big company, but within a small business, such as access to good marketing.
Recruitment was a tough process, but we were lucky to get good people on board. It’s all down to systems and procedures. It took a year to develop an operations manual to be used across all the stores. I’d never done anything like that before so it took some time.
We only started franchising at the start of 2010. We spent a significant amount time on the model, working on the menu and the customer service before we went to market. That’s helped the business.
How do you plan to stand out from the crowd?
Darren: We try to be different by being bright, youthful and family-orientated. We wanted to be in shopping centres because that’s where the youth hang out.
The product is value for money whereas others have made it a more premium proposition. We’ve just created Mr Chocco, which is a mascot that has given us a nice presence in stores.
What have the biggest challenges been?
Greg: Initially, it was getting an unproven business into shopping centres. We did that by paying more rent than we should have. In hindsight, there are not many ways to avoid that, other than going to a strip of stores and building your brand awareness there.
The lesson was to make sure that you don’t needlessly overpay on rent. It’s the biggest fixed cost in the business. But we get good flow in shopping centres, so it’s a good location for the business.
We’ve been profitable since day one, which I put down to a lot of hard work and the fact that Darren and I come at it from different angles. He’s a chef and I’ve got an accountancy degree. I’ve got the back end and he’s got the front end.
Like any brothers, we have our moments, but we always laugh it off and get on with it.
What are your plans for the future?
We have big growth plans. We want 35 to 45 stores within the next three years. We will build our presence in Victoria in the next 12 months and then we’ll move interstate.
The chocolate market is very significant, so the business can lend itself anywhere. Who knows, we could head beyond Australia. I’d certainly like to see the business go international.