Café chain Cofix is accelerating its expansion. On Sunday, the chain inaugurated its second branch in Tel Aviv, and announced that it would have 50 branches by the end of 2014 - within 14 months. Cofix is seeking to exploit the momentum created by the opening of its first branch, and the public's enthusiasm for the café chain.
Cofix also announced that former Mega supermarket chain CEO Gil Unger has been appointed chairman. He will receive a percentage of the company at no cost.
Cofix founder Avi Katz and Unger presented the café chain's strategic plan, which Katz said would meet the criticism leveled against the franchise model. He reiterated that, under the franchise model, "One-third of franchisees are very successful and drive Cadillacs, one-third make do, and one-third are failures and lose money."
Katz and Unger said that Cofix would establish all the franchises with financing from the owners, and that each branch would be transferred to a franchisee only after operating for 3-6 months, during which the branch would have to show that it was profitable. They said that the investment in each branch would be NIS 300,000-350,000, and that the total investment would be NIS 15-17.5 million.
"Globes": What will the franchise fee be?
Katz: "There will be no franchise fee. A franchisee will only pay what he actually invested."
What royalties will the franchisees pay?
"There will be no royalties, but a sharing of profits and success. The details have not been finalized."
In which cities will the branches be opened?
"I estimate that there will be around ten branches in Tel Aviv, ten branches in Tel Aviv's satellite cities, and thirty more branches across the country, in strong cities. I won't open a branch in a place where sales are projected to be less than 2,000 items a day."
Published by Globes [online], Israel business news - www.globes-online.com - on October 21, 2013
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