Franchisor finds way to beat gloom

Posted by James Ferre on 29th August 2008

Leading Australian retail food brand manager and franchisor Retail Food Group Limited (RFG) today announced a 134% increase in net profit in spite of the recent economic turbulence which has hit consumer confidence.

The owner of the Donut King, Brumby’s Bakeries, Michel’s Patisserie and bb’s café franchises saw growth stimulated by their purchases of Brumby’s and Michel’s and a record number of new store commissionings (61).

There is now a total of 1,052 franchised outlets under RFG’s four franchise systems comprising:
• 307 Donut King outlets (a net increase of 18 outlets on previous year)
• 329 Brumby’s Bakeries outlets (a net increase of 8 outlets on previous year)
• 348 Michel’s Patisserie outlets, (a net increase of 6 outlets on previous year), and
• 68 bb’s café outlets (a net decrease of 3 outlets on the previous year).

RFG Chairman John Cowley said the Company had exceeded management’s expectations during the past 12 months. “The Company has now fulfilled all aspects of the strategic growth plan outlined in RFG’s May 2006 Prospectus, delivering upon its commitment to shareholders and transforming itself into a genuine market leader within the retail food franchising industry,” he said. “Not only has the Company added two successful and highly recognized franchise systems to its portfolio in Brumby’s Bakeries and Michel’s Patisserie, it has continued to achieve consistent and sustainable growth in new outlet openings, outlet average weekly sales and outlet average transaction values.”

The financial year also saw an increased roll-out of product to Donut King outlets from the Central Manufacturing Facility and the entry into a Master License Agreement to enable the Donut King brand to enter the Chinese marketplace.

RFG CEO Tony Alford acknowledged that current economic conditions were not ideal but believes the company will be able to cope in spite of falling consumer confidence  and spending. “Whilst no business is immune from present market conditions, RFG’s systems have historically traded well during retail and economic adversity. Our franchise systems are well positioned in terms of product and service delivery to absorb the many current external market pressures,” Mr Alford suggested.

A further 50 outlets across the RFG franchise systems are expected in the coming year.