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M. Ramesh
Nina Varghese

Keen to enlarge franchisee network

MR S.B.P. PATTABHI Rama Rao, President, Australian Foods India Pvt Ltd, at a Cookie Man outlet in Chennai. — Bijoy Ghosh

Chennai , Aug. 30

The promoters of Australian Foods India Pvt Ltd, owners of the `Cookie Man' brand, intend to invest around Rs 25 crore in building the business over the next three years. Of this, Rs 5 crore will be infused into operations shortly, the company's President, Mr S.B.P. Pattabhi Rama Rao, told Business Line.

Australian Foods India is a joint venture of Cookie Man Pty of Australia, a US-based private equity investor Paracor, and the family of Mr Pattabhi Rama Rao. Paracor holds 40 per cent of the Rs 8-crore equity and the rest is equally held by the other two.

Australian Foods has one factory in Ambattur, Chennai, capable of producing 1,000 tonnes of dough and 200 tonnes of cookies a month.

Its only other owned production centre is the shop in Spencer Plaza in Chennai, which produced (and sold) 50 tonnes of cookies last year.

All the other `Cookie Man' shops in the country — around 20 — are franchisees of Australian Foods.

To set up a franchisee, it would cost Rs 30 lakh. The shop would be owned by the franchisee, but the oven — patented by Cookie Man, Australia — will be put up by Australian Foods. Each oven costs about Rs 30 lakh.

The company intends to put up another dough factory "somewhere in central India" to cater to the North Indian markets. But that is for later. Right now, the company is busy expanding its franchisee network.

Presence in malls

Mr Rao looks at the market like this. `Cookie Man' intends to be present in shopping malls, where the company does not have to "attract footfalls." In India, about 300 shopping malls have been proposed to be built.

Assuming only a third of the malls materialise and even if Cookie Man could end up being in only in around 70 of them, Australian Foods would need funds to invest in the ovens. That is why the promoters are bringing in the Rs 5 crore.

The turnover of Australian Foods grew from Rs 69 lakh in 2001-02 — its first full year of operations — to Rs 10.40 crore last year.

This includes, the Rs 1.60-crore sales of the shop in Spencer Plaza and the franchisee fees.

Last year, the company began to make profits too. The value of sales from all the franchisees amounted to around Rs 25 crore.

Mr Rao said that over time, Australian Foods would sell off the Spencer Plaza shop so that it could focus on developing franchisees.

Des Ami Foods Pvt Ltd, which has the franchise at the Chennai Citi Centre, would buy out the shop, he said.

More Stories on : Brands | Foods & Food Processing | Channels and Franchises

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