BUBBLING UP

The bubble tea market is expanding its horizons. Here Chatime and Gotcha share insights into their 2021 plans.

CHATIME

Andrew Benefield is chief development officer at Chatime Group.

Q. HOW DID CHATIME BUSINESS BOOM THROUGH 2020? A: Chatime persistently strives for excellence – even with the uncertain times that Covid brought throughout 2020. Over the last year we opened six new sites across Australia with one location being a second site for existing franchisees. Some key stats for last year are: 31 per cent of our sites returned a positive Like for Like over the course of 2020, we achieved a five-year sales compound annual growth rate (CAGR) of +14.2 per cent and reached a 5-year store count CAGR of +14.9 per cent.

Q. HOW MANY STORES ARE IN AUSTRALIA NOW AND WHAT'S THE TARGET FOR THE NEXT 12–24 MONTHS? A: We currently have 126 Chatime franchises located across Australia with 29 more to come over the course of 2021. We have more than 50 per cent of our target locked in.

Q. HOW DO YOU PLAN TO EXPAND THE NETWORK? A: We aim to expand our network through franchising as we have found that stores run by driven, dedicated business partners who are heavily involved in their own businesses tend to perform better. We aim to branch out right across Australia and to be in every major shopping centre and city.

As well as this, we are currently working on an exciting project to expand into rural Australia, looking to hit locations such as Orange, Bathurst, Bendigo and Ballarat towards the end of 2021.

Q. WHO IS THE CUSTOMER AND HOW IS THE DEMOGRAPHIC CHANGING? A: From researching into our customer base, we’ve made some really awesome discoveries that have allowed us to really tune into our demographic. For example 78 per cent of our customers are women with 71 per cent between the age of 18 to 35; while 43 per cent (and increasing) are Australian, however 42 per cent (and declining) come from an Asiatic background.

We’ve also established that our customers are high-level digital natives and although they are brand loyal, they are mainly driven by innovation. So we can see that although we have roots stemming from Taiwan, our products are definitely appealing to the western market and this is undeniably on the rise.

Q. HOW IS CHATIME DISTINCT FROM OTHER TEA BRANDS IN THE MARKET? A: Chatime aims to delight current and new customers via delivering superior, tailored and digitally-supported experiences. Through our tastefully provocative marketing, we highlight issues in a witty way, sparking curiosity and getting our audiences to think, often leading to change.

Unique to Chatime is our Loyal-Tea app, which allows our customers to get the most out of their Chatime experience. They can earn tea-riffic awards with points earned for every dollar spent, jump the queue and order via the app for pronto pick-up, locate their nearest T-brewery as well as app exclusive offers and promotions.

Q. WHAT'S KEY FOR SUCCESS IN THIS MARKET? A: Chatime’s secret to success is in the consistency of our product, with all our drinks served having the same amazing taste no matter what location you visit. Chatime also demystifies the concept of bubble tea, opening it up to others and appealing to the masses. This is reflected in the fact that 60 per cent of our customer base come from non-Asian backgrounds. As well as this, we focus on the concept of freshly brewed tea, making sure to brew fresh tea frequently through the day, with our most popular mix-in being the tapioca pearls cooked fresh every four hours.

Q. WHAT ARE YOUR EXPECTATIONS FOR THE MARKETPLACE IN THE NEXT FIVE YEARS? A: Our expectations are that the market will consolidate to two to three key players, Chatime of course included. Our goal is set high with the aim to hit 250 stores across Australia. We believe quality operators with good systems will shine through, with fresh iced tea becoming an accepted staple end competitor to other beverages such as juice.

Another growing push in the market is for brands to be more environmentally friendly and reduce plastic waste. Chatime is currently working on Project Happy Turtle, which aims for us to completely eradicate single-use plastic within our stores across Australia. We’ve trialled this through the introduction of reusable bubble tea cups, as well as paper straws across the network.

GOTCHA

Gotcha’s tea ranges are tailored to suit everyone, no matter their age, dietary preference or palate. They include handcrafted collagen teas, milk teas, cheese foam, macchiatos, Japanese-style yogurt and fruit teas.

Gotcha assistant managing director, Christy Chen, says, “As Gotcha successfully combines Asian tea culture with the European salon experience, we invite all walks of life to enjoy the taste of our fresh tea.”

Q. HOW MANY STORES ARE IN AUSTRALIA NOW AND WHAT'S THE TARGET FOR THE NEXT 12–24 MONTHS? A: Since 2018, Gotcha has expanded to 21 stores across Australia with five new outlets opening before midwinter and another 15 Australian expected to open by the end of the year.

Gotcha is planning to expand to Saudi Arabia, New Zealand and Singapore this year, and is expanding to eight stores in Indonesia.

Gotcha will continue focusing on the interior of our stores to deliver an elevated level of design.

Q. HOW DO YOU PLAN TO EXPAND THE NETWORK? A: We are currently focused on building strong franchising relationships, mainly in suburban locations. Landlords and shopping centres appreciate the brand’s western design concept and sophisticated offering at a reasonable price point. Gotcha’s offering is fast and convenient, which performs well in heavy foot traffic locations.

By July we plan to open stores at Fountain Gate, Epping, Broadmeadows, Watergardens, Werribee, Sunshine, Chadstone, M-City and Clayton in Victoria. In NSW, a Granville store will be unveiled.

Q. WHO IS THE CUSTOMER AND HOW IS THE DEMOGRAPHIC CHANGING? A: The Gotcha consumer is aged between 14 and 50 years old.

Q. HOW IS GOTCHA DISTINCT FROM OTHER TEA BRANDS IN THE MARKET? A: Gotcha has established itself as a connoisseur in the bubble tea market. We believe our strength is in our ability to harvest the highest quality teas, build impressive product ranges and by creating an unparalleled instore experience.

The interior design of all Gotcha salons is a huge element of focus for the brand in ensuring that customers can indulge in the highest luxury and enjoyment of bubble tea.

Our founder, Roger Fu, is exceptional at employing his smarts as a mechanical engineer and industrial designer, having designed a tea brew and quick shake machine that will cool hot tea to a chilled bubble tea in 0.5 seconds. We like to call this the Ferrari motor of bubble tea making and expect this to revolutionise the industry.

Gotcha’s unique machine was created to professionalise and elevate the making of each tea, instead of traditional handshaking, which can standardise the quality of the drinks.

Our brand strategy is built on the promise of providing a high-quality tea experience and education for the discerning bubble tea consumer. Gotcha remains unparalleled with rigorous quality control, from leaf to cup, with our tea being farmed and picked from our own plantation to ensure the highest quality ingredients for each customer.

Q. WHAT’S KEY FOR SUCCESS IN THIS MARKET? A: We credit our success to two branches, entrepreneurship and innovation, which we believe stem from the creativity tree, that when combined create a business model that will flourish.

We are always working towards enhancing our products, working towards a sustainable future, maintaining jobs for our employees, and maintaining the quality of our tea.

Q. WHAT ARE YOUR EXPECTATIONS FOR THE MARKETPLACE IN THE NEXT FIVE YEARS? A: As coffee and tea are beverages consumed across the world, we are very confident the bubble tea market will continue to grow, especially as we expand into international regions. There continues a great buzz among the trends of the food and beverage industry, with boba balls, full leaf tea, high-quality milk and sustainable packaging showing no signs of the interest dwindling away.

We are committed to enhancing our bubble tea experience and taking Gotcha to the next level through strategic planning, innovation and expanding our beverage options to suit all consumers. n

WELLNESS FLEXES ITS MUSCLE

The wellness market is a multidisciplinary sector that’s fast gaining strength. We look at franchises across Pilates, fitness, rehabilitation and allied health that are smashing goals and setting their sights on a healthy future.

The wellness industry is booming globally. Here we shine a light on what’s happening in Australia and a spotlight on what wellness means.

So what do we mean when we talk about the wellness industry?

“I think there is an important distinction between health on one hand, and wellness on the other,” says Back In Motion founder Jason T. Smith.

“Traditionally, health has been about treating sickness, illness, pain and disease. Wellness has focused on delivering services that simply make people feel better.

“Wellness has grown to encompass the spiritual, emotional and even the

By Sarah Stowe

intellectual, environmental, social and economic/occupational dimensions. “As our societal awareness of the integration of ‘self’ emerges, we see a blending of the health and wellness spaces.”

Selina Bridge, KX Pilates CEO, says the wellness market “is in many ways undefined. It is very broad and can cover physical, mental and spiritual health”.

What we do know is that this multidisciplinary sector is growing apace. Figures from the Health and Wellness Market: Global Industry Trends, Share, Size, Growth, Opportunity and Forecast 2021–2026 show the marketplace accounted for $4.27 billion ($US3.31 billion) in 2020. Predictions for the next five years suggest a compound annual growth rate of 4.10 per cent to reach $5.47 billion by 2026.

Included in this are services based on wellness real estate, wellness tourism, health spas and thermal and mineral springs as well as personal care/beauty, nutrition, weight management, fitness and preventive/personalised medicine.

Key players in the Australian franchise sector include yoga and Pilates brands, allied health providers such as physiotherapists, alternative fitness options such as electro muscle stimulation, and rehabilitation services.

Matej Varhalik, SpeedFit co-founder and CEO, enjoys the constantly evolving nature of the wellness market.

“That makes it a very exciting market to be part of,” he says.

BLENDING HEALTH AND WELLNESS

SPEEDFIT

CEO Matej Varhalik says, “The concept for SpeedFit was based on my personal experience of having an injury that was causing me great discomfort and inconvenience and needing a solution for rehabilitation that would not take up endless hours of my day.

“SpeedFit is designed to give people with busy lifestyles a fast but effective option for health and wellness, and fits well into the current market.

“At SpeedFit our vision is for all people to live an active and healthy lifestyle, regardless of time constraints or physical limitations. We believe that your fitness routine shouldn't overtake your life but fit into it,” Matej says.

He predicts the sector will continue to grow, the post-Covid space now bringing health issues to the fore.

“Health issues like obesity and mental health are being discussed more in the media,” he points out. WHAT ARE YOUR FIVE-YEAR GOALS FOR THE BUSINESS? “SpeedFit is Australia's largest EMS (electronic muscle stimulation) fitness franchise and we will continue to grow our presence across Australia with a goal of servicing 20,000 people by 2027.

“EMS training is still quite new to the Australian market so our goal is to continue driving awareness and education about the various benefits that this training can offer.”

HOW ARE YOU OVERCOMING THE CHALLENGES OF EXPANDING THE NETWORK? “We achieved a 76 per cent year-on-year growth for the period of 2020–21 and are excited to keep supporting our growth across Australia. To do this we have started recruiting for key positions which we may not need right away but will need sooner than later.”

There’s an increase in broader marketing and communications initiatives as awareness and education is key for the business, he says.

“We also recently introduced a part-ownership franchise model to make owning a franchise more accessible to people who would like to own their own business but do not have the upfront funds to get started. We have trialled this in a few locations and it is working really well.”

BRAND BASICS How long have you been trading? Eight years How long franchising? Four years How long is a franchise term? Five years with two options to renew

What is the upfront franchise investment?

In our partnership model $100,000; a full stand-alone studio is between $150,000 and $220,000

What are the franchise fees/marketing

fees? 7% royalties; 6% marketing levy

BACK IN MOTION

Founder Jason T. Smith says the healthcare chain has always considered itself a brand that connects health and wellness.

“We are university trained healthcare professionals delivering expert physiotherapy, chiropractic, podiatry and exercise physiology services, but design our client care models around a wellness philosophy that acknowledges the bio-psycho-social context.

“We don’t want to just fix the ‘problems’ of poor health, we want to promote people’s wellness through proactive, positive lifestyle choices and habits. This is our brand’s point of difference and explains our high levels of year-on-year growth over two decades.

“Our brand essence at Back In Motion is built on the belief that ‘movement is for life’. We don’t just treat the injury, we treat the whole person … by understanding their individual lifestyle, preferences and goals to design a treatment plan tailored to their life needs.”

Jason’s goal is to empower clients to have optimal lifelong health, and Results4Life is a proprietary philosophy of care that governs the group’s clinical approach.

And rather than push products and services, Jason believes the goal should be to listen to clients and solve problems.

“I think a good deal of demand for our expertise emerges from sound and consistent education. I’ve dedicated my career to being a health advocate, investing more time and effort into education of our communities than ‘selling’ our services.”

WHAT ARE YOUR FIVE-YEAR GOALS FOR THE BUSINESS? “We have been growing at a steady rate of between 10–15 per cent year-on-year since inception. Our intention is not to slow down any time soon.”

Jason has just launched Back In Motion’s #impact2030 strategic plan and expects to significantly increase the number of practice locations from 140 to 400 within 10 years.

A rollout of new sites across Australia and New Zealand has a special emphasis on podiatry, chiropractic and dietetic services.

“We are also committed to investing heavily into technology to facilitate digital health services, home-care offerings and ongoing research into healthcare and best practice,” says Jason.

Expanding the network is a threepronged approach: existing staff members become franchisees; opening brand new sites; and converting existing physiotherapy practices.

HOW ARE YOU ATTRACTING FRANCHISEES? “We simply invest our time educating our profession on the importance of sound business practices, strategies for growth and how to live balanced professional lives,” says Jason. “As they realise their need for solutions around this, our franchise offering presents as a high-value proposition for their consideration. It’s an organic process rather than an aggressive sales strategy. But it has worked well for us for over 20 years.”

BRAND BASICS How long have you been trading? 21 years How long franchising? 16 years How long is a franchise term? Five years with ongoing options

What is the upfront franchise investment?

$70,000 + equipment/fitout

What are the franchise fees/marketing

levies? Franchisee fees are 2–7% gross sales depending on the size of business. As the practices grow, the royalties become lower. A royalty-free concession on the revenue and goodwill is available to conversion franchisees. Marketing levies are 2% of gross sales.