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Landlord information pack.
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EXECUTIVE SUMMARY.
MARKET POSITIONING.
STORE CRITERIA.
STARbUCKS fRANCHISE.
COMPANY INTROdUCTION.
COMPANY dNA.
COMMERCIAl REfERENCES.
GET IN TOUCH.
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Landlord information pack.
Newport Store.
EXECUTIVE SUMMARY.
With over 20,000 stores worldwide Starbucks plan to drive estate growth in the UK through new franchised store openings. Asset type include traditional high street, drive through/to, retail park, kiosk and other concessionary activity.
23.5 Degrees Limited (www.23-5degrees. com) is Starbucks’ first franchisee globally. The company has been allocated a developmental territory including Oxfordshire, Berkshire, Surrey, Hampshire, Wiltshire Dorset, Cambridge, Hertfordshire, Essex and Norfolk. The two Directors, Anil Patil and Mark Hepburn have a track record of success in food service franchise businesses, including Domino’s Pizza, Burger King, Costa Coffee and KFC. Having opened their first Starbucks store in February 2013, 23.5 Degrees currently operates 12 stores with the 13th opening in April and an approved pipeline to enable a further 8 store
openings by Q3 2015. With no restriction on the asset type of stores available, there is potential for significant ongoing expansion throughout the franchise territory. This view is supported by Allegra Strategies recent annual study of the branded coffee shop segment is forecast to exceed £5.0 billion across 7,870 outlets by 2020 with outlets predicted to grow at 5.3% compound annual growth rate and revenue at 10.0% over the next 5 years. Allegra estimates that the UK has the long-term potential to comfortably host more than 9,500 (from 5,781 currently) branded coffee shop.
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MARKET POSITIONING.
OUR CUSTOMERS: The customers who connect with our brand are truly unique. They’re some of the most curious, hopeful and brave consumers in the world. Health conscious, 2.1.3 Ma community minded and not satisfied with the status quo. We would be nowhere without them. And so they drive everything we do.
Market Size by Outlet Numbers Market size by Outlet Numbers
Allegra estimates that the total UK coffee shop market, including branded coffee chains, December 2014. This represents annual growth of 7.8%. Non-specialist operators have d primarily driven by pub operators, supermarkets and retailers improving coffee credentia Allegra predicts total market growth will continue at 6.5% per annum to exceed 27,000 o
FIGURE 2.1.1 – TOTAL NUMBER OF UK COFFEE SHOP OUTLETS, BY TYPE, AUG 1999-DEC No. of Outlets 30,000 28,000
Branded Coffee Chains
26,000
Independent Operators
24,000 22,000 20,000 18,000 16,000 14,000
3,980 4,511
12,000 10,000
4,780
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Landlord information 5,400 pack.
Dec-11
Dec-10
Dec-09
Dec-08
Dec-07
Dec-06
Dec-05
Dec-04
Dec-03
Dec-02
Dec-01
Dec-00
Aug-99
1,338 1,463 1,287 1,252 8,000 1,092 1,159 5,236 5,336 5,469 903 5,136 522 6,000 4,967 5,041 4,869 522 562 4,760 4,000 4,345 4,453 4,587 4,260 4,964 2,000 4,100 3,533 4,086 4,422 4,688 3,067 2,766 2,520 2,271 1,810 2,067 0 778 1,382
6,204 6,943 7,423 7,950 8,439 8,887 9,321 9,912 10,685 13,638 14,535 15,213
of continued considerable growth, this Market size, growth and future: segment is one of the most successful in The branded coffee chain segment the UK economy. Allegra predicts the total recorded £2.9 billion turnover across UK coffee shop market will exceed 27,000 5,781 outlets, delivering impressive sales arket Overview – Market Size by Outlet Numbers / SECTION MARKET outlets and2: £16.5 billion turnover by 2020, growth of 11.9% and outlet growth of 4.9%, driven by branded coffee chain expansion. adding 271 stores in 2014. After 16 years
independents and non-specialist operators, reached 18,832 outlets in driven growth in the coffee shop market this year, adding net 888 stores, als. Following compound annual growth of 6.7% between 2009 and 2014, outlets by 2020, driven primarily by the non-specialist sector. Compound Annual Outlet Growth Dec 14-Dec 20F Total Market 6.5%
C 2020F
Non-Specialists
5,413
6,129
7,017
7,764
8,621
11,843 10,976 10,191 9,406
7,870 7,059 7,377 6,768 6,502 6,034 6,257 5,830 5,633
Non-Specialists 9.1%
Independents 4.2%
Dec-20F
Dec-19F
Dec-18F
Dec-17F
Dec-16F
Dec-15F
Dec-14E
Dec-13
Dec-12
Branded chains 5.3% 6,858 7,195 7,538 7,709 5,225 5,510 5,781 6,144 6,509
3 16,271 17,469 18,832 20,170 21,636 23,036 24,449 25,895 27,442
27,340
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bournemouth Store.
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Landlord information pack.
STORE CRITERIA.
We are seeking prime ground floor units of between 1,500-3,000 sq ft, with a minimum frontage of 19 ft, in all major towns and cities within our developmental territory.
Our store in Bournemouth. Sites should have high footfall and/or traffic flow numbers: Locations: Stores required in all major towns in Oxfordshire, Berkshire, Surrey, Hampshire, Wiltshire & Dorset Cambridgeshire, Essex and Hertfordshire and on A Roads linking those towns. Asset Types: • High Street stores • Shopping Centre Food Courts, In-Line stores or Mall area kiosks • Units on Retail or Business Parks – stand
alone Drive Thru or Drive To or in-line units • Roadside Drive Thru and Drive To • Kiosks • Concessions Fit Out: Each store fit out is individually designed by Starbucks in house architectural team, so that no two Starbucks will ever be entirely the same. The cost of fit out on 23.5 Degrees’ stores to date has generally exceeded £250,000, representing a substantial commitment to each new location.
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Existing Stores: • A3 Northbound, Liphook • Portsmouth Lakeside • The Triangle Bournemouth • The Meads, Farnborough • Town Quay, Southampton • Fore Street, Trowbridge • Nicholson Centre, Maidenhead • Newport (Isle of wight) • Richmond Hill, Bournemouth • Hedge End, Southampton • Witney, Oxfordshire • Guildhall Walk, Portsmouth
Stores Before and after The Triangle Bournemouth Store
The store before renovation.
The store after renovation.
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Landlord information pack.
The store after renovation.
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Stores Before and after
Maidenhead Store
The store after renovation.
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Landlord information pack.
The store before renovation.
The store before renovation.
Guildhall Walk Store
The store after renovation.
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farnborough Store.
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Landlord information pack.
STARBUCKS FRANCHISE. 23.5 Degrees Ltd – The 1st Starbucks franchise: We are proud to be the world’s first Starbucks franchise and our aim is to open over 300 stores over the next 5-7 years.
What Sets Us Apart: The crucial differences that elevate and separate 23.5 Degrees’ Starbucks franchise from any other company, coffee or otherwise, is the way we engage with our customers, our commitment to offering only the highest quality coffee and building stores that are inviting, dynamic and expressive; while always operating in ways that produce social, environmental and economic benefits for our partners and the communities in which we do business. 15
Witney Store.
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Landlord information pack.
COMPANY INTROdUCTION.
With a southampton based head office, over 100 employees and 3 agents, our management team includes: Anil Patil, (76% shareholder) Managing Director
Mark Hepburn, (24% shareholder) COO
Responsible for the group’s everyday management, in particular its commercial, financial and back office processes.
Responsible for store openings and operations.
Anil previously worked as a barrister but decided that the move to owning and operating his own business would ultimately give more financial security, a more flexible lifestyle and a greater sense of satisfaction in work. He and his wife Astrid became Domino’s Pizza franchisees in April 2005, and after initially continuing to work as a lawyer, Anil joined Domino’s full time in January 2008. Having built their franchise to 18 stores employing over 450 partners, Anil sold his Dominos business to develop 23.5 Degrees.
Steve Jupp,
A corporate banker with Barclays for over 35 years whose roles covered both relationship banking and credit risk, featuring leadership positions and specialism in leveraged finance and property/construction – including heading-up the Property Credit team which handled transactions ranging from £1m up to £2bn. Following retirement at the end of 2006, has undertaken consultancy work, examples include reviewing contingency planning at the Bank of England, leveraged finance at CIT, turnaround at Bank of Ireland, plus various credit, change, organisational, and regulatory workstreams at Barclays and Bank of Ireland..
Mark has over 25 years corporate and franchise management experience in a highly competitive, fast growing, labour intensive quick service restaurant environment. A long track record of delivering results through teams, with strong focus on people development, sales building and profit growth. He has a wealth of experience in business development and a sound working knowledge of site/restaurant procurement and construction. With great understanding and experience in human resources and restaurant marketing, has given him a detailed understanding of the QSR & Food Service Industry through numerous world wide recognised brands.
Ashley Cooper, Project Manager With over twenty years experience of project management in the retail sector including New stores and refurbishment of General stores, Drug stores, Pharmacies, Food and Beverage outlets in High streets, Shopping centres, Airports, Rail stations and Non public locations. I carry out my business activities with honesty, integrity & professionalism. I work to create a trusting relationship with my clients through providing a customer focussed service & being sensitive to my clients’ business & programme requirements. 17
Trowbridge Store.
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Landlord information pack.
COMPANY DNA. OUR MISSION:
“To inspire and nurture the human spirit – one person, one cup, and one neighbourhood at a time.” 23.5 Degrees OUR behaviours:
• B alance intense professional will with behaving respectfully and considerately – Facing challenges fearlessly and passionately, displaying competence but equally treating others with respect. • E levate warmth above strength – Build trust and emit a warmth of character by gaining an understanding of others through listening as much as speaking. • E mbrace change – Enable positive change by challenging long held beliefs and values. • P romote a culture of discipline that affords the freedom to excel – Through adhering to company policies we enjoy the freedom to express our personality in a positive manner. • P ractise truly collaborative leadership – Delegating where needed, actively promoting team work but remaining responsible for delivery of company strategy.
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Commercial References.
“It gives me great pleasure to recognise a franchise partner who was one of our early onboarded franchisees. Anil, Mark and the 23.5 degrees team have been a constant through our early journey and have been partner in the true sense. Anil and Mark opened their Liphook store nearly two years ago. We were a fledgling team, and they kept the faith, believed in the brand and our values, and worked with us side by side as we took every small step forward. Mark has been a pragmatic and positive partner. His hard work hand in hand with Anils financial support has enabled us to reduce the store build costs at their Hedge End store by over 20%, whilst still creating a welcoming and design led environment for our customers. I am sure they will join me in thanking Lynn Day for her creativity and integrity. They now have twelve stores, a strong pipeline and are our most recent Trident project partner. Most importantly they have a strong commitment to their partners and the community they serve. Chariya came second in the first ever UK Barista championships, and the drink she created for the
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competition became available to our customers. This year Mark Makeman one of their store managers became Store Manager of the Year for the south region. He has now been promoted to the new openings manager, showing Anil and Marks commitment to developing and growing their team. Anil, Mark and their team actively support many local and national community projects, which include the Farnborough store supporting the Community First responders, Bournemouth supporting the Redhill Rangers U11 football team, and they also support ‘Parity’ which is a wonderful charity giving support and care to disabled adults near to their stores. Their energy is infectious, their values are strong, and their work ethic and belief admirable and inspiring. It gives me great pleasure to award the Starbucks ‘Bravo’ award to Anil and Mark of 23.5 degree.” Jane Coleman
Starbucks Director of Franchising
B3 Shop fitting: “B3 Shop fitting have been successfully trading with 23.5 Degrees for over 12 months. We have successfully completed a number of large shop fitting projects for them over this time. We have found them to be polite and professional in their business dealings and true to their word. They have been prompt payers and we have no hesitation in recommending them.” Fitzgerald Power Accountants: “We have acted as accountants and business advisors for the above mentioned company since April 2014, during which time we have noted the excellent operational and financial stewardship of the senior management team.” Metro Bank: “With reference to (23.5 Degrees Ltd) we would advise that we have known the business and its Directors for some time and throughout this period we have been entirely supportive of their business operations and growth aspirations and have been in a position of providing the appropriate banking support to date.”
ABP (UK’s Leading Ports Operator): “I can confirm that 23.5 Degrees maintain regular check on their balance with ABP and invoices are paid in a timely manner which is appreciated by ABP. ABP recently had software issues and invoices were sent to postal addresses rather than Email addresses, 23.5 Degrees did not receive their invoices as they would have expected and rang ABP to chase up the missing invoices before ABP needed to follow up. The are a first class tenant and would be recommended from a financial Dep view.” Parc Supplies : “Parc Supplies are a national supplier of cleaning, janitorial and hygiene products. We have been supplying 23.5 Degrees with a range of our products since April 2014. During this time we have enjoyed a good trading relationship.We have a long relationship with Director Mr Mark Hepburn and have a good relationship with Director Mr Anil Patil. The company is a valuable partner for our operation and the management are always approachable and helpful. We are currently working closely with the directors and management to develop the service we offer and increase our product range.”
see appendix: 08 January 2015 To Whom in May Concern.
Reference: 23.5 Degrees Ltd.
23.5 Degrees Unit 3 Hedge End Retail Park Charles Watts Way Hedge End Southampton SO30 4RT 5th January 2014 To whom it may concern
We have found them to be polite and professional in their business dealings and true to their word. They have been prompt payers and we have no hesitation in recommending them. Yours Sincerely
Dear Sirs Re: 23.5 Degrees Limited
With reference to the above we would advise that we have known the business and its Directors for some time and throughout this period we have been entirely supportive of their business operations and growth aspirations and have been in a position of providing the appropriate banking support to date. With regards to the current project which does fall within the franchise remit we would advise that whilst we are at a very early stage of considering expansion proposals we do not believe that our valued customers would enter into a commitment that they could not fulfil.
TRADE REFERENCE B3 Shopfitting have been successfully trading with 23.5 Degress for over 12 months. We have successfully completed a number of large shopfitting projects for them over this time.
TO WHOM IT MAY CONCERN 2nd February 2015
Tim Bowyer Director Franchise Business Development Metro Bank. Mobile: 07770 823558 Email: tim.bowyer@metrobank.plc.uk.
We have been asked to provide a reference for the above company based on our trading experience with them. Parc Supplies are a national supplier of cleaning, janitorial and hygiene products. We have been supplying 23.5 Degrees with a range of our products since April 2014. During this time we have enjoyed a good trading relationship. We have a long relationship with Director Mr Mark Hepburn and have a good relationship with Director Mr Anil Patil. The company is a valuable partner for our operation and the management are always approachable and helpful. We are currently working closely with the directors and management to develop the service we offer and increase our product range. This information reflects our current position with 23.5 Degrees Ltd. Should anything change in such a way as to affect this document, no obligation to inform the holder of this document is accepted by the undersigned. This document should not be used as a substitute for independent advice and does not constitute any guarantee. We trust that this information is sufficient to satisfy your requirements. If you require any further information please contact the undersigned. Yours faithfully
Martin Blackburn Director B3 Shopfitting Limited
Max Armstrong General Manager Email: max@parcsupplies.com
Latchmore Park, Lowfields Road, Leeds, LS12 6DN. Tel: 0845 567 66 77 Fax: 0845 567 66 88 Email: sales@parcsupplies.com Web: www.parcsupplies.com
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Witney Store.
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Landlord information pack.
GET IN TOUCH.
Please feel free to contact Sam Hepburn for all property related enquiries or Anil Patil Director for non property related queries.
Sam Hepburn, Property Consultants
Director
Mobile: Email:
Mobile: Email:
07590 456863 sam.hepburn@23-5degrees.com
Anil Patil,
07866 264274 anil@23-5degrees.com
Address: 23.5 Degrees limited Unit 3 Hedge End Retail Park, Hedge End, Southampton, SO30 4RT
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Landlord information pack.