Austin Chase brews expansion

Not everyone is familiar with the brand Austin Chase, but that is about to change as the new franchisor looks to develop a new kind of coffee culture and expand rapidly not only in Malaysia, but also in the region.

Chase Coffee Holdings (M) Sdn Bhd is the master franchisor for Austin Chase coffee for Southeast Asia and India.

After being available in the market for almost a decade, the previous franchise holder of the American coffee brand closed its last store in 2008. After a brief absence, the brand was reintroduced in mid-2009.

Chief executive officer of Chase Coffee Thesan Salva, the new master franchisee, said its target is to have at least 250 Austin Chase outlets in Malaysia and the region by 2015, from four today.

"We have projected to have 50 outlets in Malaysia in the 2010 to 2013 time frame," Thesan said. He added that half of them will be franchised.

Total investment for the Malaysian stores is estimated at RM20 million and return on investment from each new store, which measures about 2,500 sq ft and seats up to 60 people, will take between three and four years. Abroad, Thesan is likely to take the brand first to Singapore, Indonesia and possibly even India.

Today, there are four Austin Chase outlets in Malaysia, located at The Gardens Mid Valley, Wangsa Walk, Queensbay Mall in Penang and Pavilion Kuala Lumpur.

Its best-performing store is the one at The Gardens, which opened in October 2009. It sells 300 cups of coffee a day.

These four outlets and another four, expected to be opened by year-end, will help the company post revenue of RM7 million in the year ending December 31 2010. Two of the new outlets will be in Sunway Giza in Mutiara Damansara and Doubletree by Hilton at The Intermark Kuala Lumpur.

Thesan, who has a decade of experience in the food and beverage industry, expects healthy growth at the outlets.

"We expect revenue to grow to RM45 million to RM50 million in 2012," he said in a recent interview with Business Times.

Each outlet is cash-flow positive within three to four months and takes about three to four years to recover its return on investment.

Thesan also operates Spice of India (three outlets), Bombay Spice, Chola Spice and Athena which serves Mediterranean cuisine. In total, the group's revenue is expected to hit RM30 million this year.

Store expansion is one way to grow the business, but Austin Chase has to first lure the crowd, enjoy a good number of repeat and new customers who will then contribute to a handsome level of same-store growth.

"The quality of our beans is fresh and it comes directly from the US from the principle. They are packed to our specification and order," he said.

The size of its large coffee is priced the same as that of regular-sized coffee available at other more established coffee chains.

"We are looking at a lifestyle concept. We have a reading room which doubles up as a meeting room. We have projectors available for private functions, books and board games. We want to create a cluster of lifestyle-based artiste. We want people who don't just come to buy coffee, but are active," he said.