Natural convenience is how Mr. Le Minh Cuong founded and operated the franchise coffee chain in the popular segment Milano in the past 10 years.

Year 2019, Milano raise capital because want to upgrade Milano More, want to learn professional management to go further, want to have experience in building factories and producing more products of international standards. Photo: TL

Natural convenience is how Mr. Le Minh Cuong founded and operated the franchise coffee chain in the popular segment Milano in the past 10 years.

In the last days of 2014, a young man looked for Mr. Le Minh Cuong, who was managing the 3rd coffee shop in a large alley on Nguyen Oanh Street (Go Vap District, Ho Chi Minh City), to ask about franchising. brand Milano In dalat. Milano At that time, it had reached 50 shops and the founder still did not think much of stepping out of the hot spot of coffee chain development, Ho Chi Minh City. However, when talking with this guest, Mr. Cuong accepted with the condition that within 3 years, there must be 12 shops Milano opened in Da Lat.

The first shop was opened on Pham Ngu Lao Street (Da Lat) and became a phenomenon at that time with rumors of consuming more than 300 cups a day. Although it is just a rumor, in fact, the speed of expansion Milano in Da Lat faster than committed and the presence in the coffee capital has pushed up the demand for franchising of this unit. Within 4 years, the network of Milano increased from 50 stores to more than 1.000 stores by the end of 2018; on average per year, Milano Construction of 250 shops for partners. Currently, this number is 1.800 partners, from the Central region and up.

More surprising than anyone is probably Mr. Cuong because in 2011 when he opened a coffee shop Milano The first is simply the "suppression" after a long time of giving up roasted and ground coffee. At that time, sidewalk cafes with poorly decorated plastic and wooden chairs dominated the streets of Ho Chi Minh City. Meanwhile, the shop Milano with a frontage of 5 m2 is decorated quite new with one side is a bar counter, on-site roasting, the other side is a place for guests to sit. In the middle of the shop is a high-ceiling wooden cabinet with many large square drawers displaying coffee and tea products…

Why do you say shop? Milano the first is the result of "repression"?

My family has a tradition of coffee roasting. In 2001, after getting married, I decided to start my own business. However, the harsh reality is that although my coffee is delicious and rich in flavor, not many people care because the price is high compared to demand while the general selling price cannot increase. After 3 months, I didn't sell much. The first lesson also comes from that, is when participating in sales for businesses, you have to follow the way the market works first and then talk about how good the product is. I changed the product to suit the market, my wife and I borrowed more capital to do promotions.

The coffee consumption market at that time was divided into 3 segments. High-class group with large campus, investment is Country House, Mien Dong Thao, Du Mien...; the intermediate group has air conditioning and has a smaller campus; and finally, the general group is the shops selling on the sidewalk. At that time, I also did not have any strategy, every month I offered the high-end group, the following months I offered the middle and high-class group. So rotate. Persist for 10 years. By 2011, my coffee was present in most of the famous shops at that time such as Nhat Nguyet system, MTV music tea room, Star, Meeting Point, 18 Degrees...

When I had stable resources, I decided to open a coffee shop Milano. The removal of termites is to put the product through an intermediary, it is difficult to be accepted, let alone bring the product at your disposal. Therefore, after accumulating experience in designing and operating the shop through partners, I decided to open my own shop to satisfy my passion for making coffee in the immediate future.

And the franchise also started there?

How do you do it so fast? In the first three months, the shop only sold enough to live. After a wave of major newspapers strongly condemned chemically-filled coffee, consumers began to look for healthy products. See Milano There is roasting on site so people like it very much and customers spike from a few dozen to a peak of more than 200 cups/day. That shop, I stand selling and mixing, still often chat with customers in my spare time, so they also appreciate it. Many people find the model simple, easy to operate and humane, so they ask me how to do it. At that time, I also didn't think about franchising, just instructed them, or rather, wrote down on a piece of paper the materials to be purchased, the date of construction... In return, they took the coffee and used their own sign. Milano.

The first 10 shops all followed this model and were very successful. At the 11th shop, a regular customer said that because he didn't have time, he asked me to do everything and he would send the fee. That's when the construction department was formed. I remember that shop in Dong Den (Tan Binh district, HCMC). This area focuses a lot of customers from the Central region, this is a group of customers who are very praiseworthy, but very fair when evaluating and Milano Luckily they accepted. Just like that, two nearby shops were also formed. The good news spread far and wide, and we reached the 2-store mark not long after that. It was the end of 50 and 2013 that started going to the provincial market.

What is the different formula in franchising of Milano?

The second shop we opened in the alley of Phan Van Tri street (Go Vap district, HCMC). At that time, my wife had spondylolisthesis, did not take care of the shop, so there were not many customers. Later, when she recovered from her illness, she spent more time and sales from there also went up. This is the first message we send to our partners: coffee is a service industry, the owner must take time to care about it, not necessarily often but during peak times, must be present. there.

The second message is viability. Before, Milano once opened a shop on the street front, right at the intersection of red and green lights, but because the stopping time was too short, customers didn't pay attention. By the 3rd month, I gave up because the rental cost was too high. The shop in the alley also has few customers for up to 3 months, but because of the low cost, it still exists.

All shops Milano They do not use air conditioners, but fans and nebulizers. We also do not prioritize sites that are too prime because of high operating costs. I am quite conservative because I believe that "beauty kills beauty", that is, the quality of the product determines, but to prove it takes time, it cannot burn the stage. When the service business people market, good products will be accepted by the market.

Have you ever felt afraid when you have to manage such a number of partners without any formal training?

Yes, we make a lot of mistakes, from negotiating the premises, choosing the location, choosing a franchisee partner. The saddest of which is choosing the wrong partner, because they do not understand each other, the franchisee partner is not like-minded to operate the shop by themselves to get the best results, but only consider it an investment, so the profit is zero. as expected. I feel sorry for them for wasting their time and sorry for myself Milano for the loss of new business opportunities. Milano Also faked, all but the order phone number. I was worried because at that time I did not know who to consult or learn from. But in the end I thought back to it all. Milano We didn't go fast from the beginning, so the problems did not affect the whole system, we had time to repair and learn.

If the partners do not agree, the agreement will be terminated. Interest is what binds both sides, when the benefit is no longer there, it can't be forced. Therefore, I don't put as much emphasis on the number of franchise partners as the number of partners who understand and believe in me. If one day, the number of partners decreases, then for me, it is also advisable, to look for better, more oriented partners.

Year 2019, Milano raise capital because want to upgrade Milano More, want to learn professional management to go further, want to have experience in building factories and producing more products of international standards. And Milano have done it, we have a more standard operating platform than before, a factory that meets export processing standards, with a maximum capacity of 1.500 tons/year.

Now, everything has changed from the more vibrant coffee market, the taste has also changed because the customers are getting younger and younger. Do you believe in keeping up with this change?

I keep telling the operations team that the good fortune from the past 10 years is gone. Good product is the only thing that helps Milano survive the current market fluctuations. Of course, we also have a certain advantage when we have 1.800 partners who can launch new products to retain customers. Basic Milano must always know new consumer trends and use their capacity and experience to select the right trends for their partners and perfect them, bring them to market with the most competitive time and cost.

That's why I haven't even thought about exporting coffee even though everything is ready. The domestic market still needs a lot of investment to serve partners in the system.

Over 2 decades with coffee, what makes you sob every day?

Milano As a small company, I have to experience many positions but my nature is a product person. And nothing is happier than the feeling that your product is accepted by a large number of users. I still remember the image of the elderly after the first sip of coffee, naturally, continuing to bring to their mouths to take a second sip, as if searching for a taste they had long lost. Or the image of a motorbike taxi driver leading you to the shop and boasting that “the coffee here tastes great!”… That motivates me to work tirelessly every day.

Sources of articles: Investment bridge

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