UPMARKET CONVENIENCE

One Asian grocery store looks to the future with eyes on franchise expansion.

Focus on an Asian grocery store.

Grocery store owner Stephen Lim knows that introducing a brand new franchise concept into the well-established convenience store marketplace will test his mettle, but he is more than ready for the challenge.

For one thing, the Yahweh Asian Grocery store business has a distinct point of difference in the franchising sector.

Lim set up the Asian grocery business 10 years ago with a store in Carlton, Melbourne. He added a Highpoint shopping centre outlet three years later, and has since sold the original store and opened another outlet at Moonee Ponds Central.

“In the last two years we started to look to restructure the business to look into franchising. We noticed there were no Asian groceries operating under the franchise model. It’s always hard to be the first because people do look for well-known brands in franchising.”

What the grocery can offer is quite an upmarket store presentation, complete with timber shelving, that distinguishes it from typical independent Asian groceries and attracts a variety of customers.

We noticed there were no Asian groceries operating under the franchise model. It’s always hard to be the first because people do look for well-known brands in franchising.

The design is costlier than a traditional metal shelving fitout and needs to conform to shopping centre standards. However, with help from the franchisor to negotiate a lease the franchisee will likely also benefit from a landlord’s fitout contribution.

A 100 square metre store is expected to have a turnkey cost of about $250,000.

“Retail is challenging, but where we have an advantage is in the number of enquiries from shopping centres. Rental prices have dropped too,” says Lim.

There are limited opening times, in line with shopping centre trading hours: typically 9 to 5 or 6 pm.

“People are looking for bigger brands which seem to be secure. One question is, ‘Why couldn’t I just operate my own independent business, what benefits would I get?’ We have about 1500 products and we take on board the ordering process. Any new franchisee doesn’t need to worry about what to order or where from; the system tracks this for them.”

Lim points out that while franchisees are freed from the standard stocktaking and ordering, they are encouraged to look for new suppliers and products to suit their local customers. Franchisees don’t need retail experience. Monthly merchandising and promotions advice, and sales analysis reports, are just part of the support paid for with royalty fees.

The expansion goal is realistic: to bring on just one franchisee in the next 12 months.

“We’ll start in Melbourne first, then develop interstate as it progresses.”