Franchising lessons from Mugg & Bean's founder

Filmalter, who opened the first Mugg & Bean coffee shop in Cape Town's V&A Waterfront in late 1996, was addressing a franchising breakfast session yesterday morning in Fairlands, Johannesburg.

“This is a very difficult industry that needs dreams, tenacity, common sense and resolute leadership,” Filmalter said, adding that one has to believe and be fully committed in this business if one wants to make it big.

He told Bizcommmunity.com that he has since sold all 100 Mugg & Bean shops to Famous Brands for R104-million, but kept the international outlets, which include operations in the Middle East.

Describing himself as a dreamer, he said, “We should never stop dreaming. This world needs few lawyers and accountants, but plenty of dreamers. My dream got me in tough times and made me get up every day to find ways to do better. I dreamt of having the best restaurant in the country. So you should constantly dream.”

He also said that it was critical that business people understand what is going on in the market and changing forces that constantly influence the market.

“You have to understand the season and keep up with the trends. Changes are happening and there is nothing you can do about it. It is part of life.

“But look at the change in demographics and change in markets dynamics and plan around that. I can read the market - that is my biggest skill and I now have a diplomatic prowess.

“We live in an era of low inflation. SA inflation is historically high and all of sudden we find ourselves not being able to raise prices.”

Filmalter said people should develop a culture of unrelenting renewal. “We made a lot of mistakes, but we soldiered on and kept going. You should choose your friends, your wife and your partners very carefully. Get one only if you believe that you share the same vision, and surely you will find common ground.”

He said the biggest challenge they had was when they decided to revamp.

“We never allowed the stalemate in our business,” he said. “We spent sleepless nights but it was vital. We had to come up with something fresh, and we did it.”

However, Filmalter warned that despite the decision to revamp, people should ensure that the tangible things that make customers identify with the brand remain.

“Franchising is not a democracy and someone has to be held accountable,” he said, adding that he is a pioneer, a constant learner and a dedicated observer of life.

“You should never underestimate the power of observation. See more, listen a lot and talk less. You should not stop learning.

“The concept of brand creation is all about getting something established and raising its bar. Build relationships - I did build a strong one with my franchisees and it paid off.”

The session was sponsored by First National Bank in collaboration with Franchising Plus, a franchising consulting company.

FNB's Deborah Senekal and Anita du Toit said the company has put a website in place to help industry players with necessary tools needed for their businesses.

For more, go to www.supplierstool.x2in5.com and www.franchisingplus.co.za.