Crêpeaffaire is on the rise. Founder Daniel Spinath and his team have opened tens of units in the UK and the Netherlands and even more stores in the UAE with franchise partners.
Daniel’s goal is to create solid brands. “I am a brand person”, he says. “My goal is to create relevant brands with great brand equity. The brand has to be clear. It is the only way to scale.” His second concept, Crêpe & Roll, is the best proof of this, which aims to scale through multiple distribution channels.
In this episode, Daniel and Carl discuss developing a strong brand identity that can be rolled out broadly while remaining locally sensitive. Daniel recalls the difficulties in scaling from 2 stores to 3 and more. And he explains why a group and a chain are different and why that difference matters.
He and Carl elaborate on the importance of a cultural fit with locations, staff and partners, and they unravel the search for the holy grail in technology for restaurants.
Carl: Welcome to the second podcast of the food service growth show. With me I have Daniel Spinath and he’s the founder and CEO of Crepe Affaire. Thank you very much, Daniel, for joining us.
Daniel: Thank you very much, Carl. Good to see you.
Daniel: What I’ve been doing for the past 15 years or so, I’ve been trying to sell pancakes or crepes. Starting in the UK and now also internationally.
My background is in fast moving consumer goods, started in hospitality and did a lot of other things. I was with Procter and Gamble for some time, international position and kind of grew up with pancakes and crepes and always questioned why there wasn’t anything really branded and systematic in that area.
And at some point I decided to actually become an entrepreneur and say, Hey, perhaps my hospitality and marketing backgrounds have served me to actually start a business around this very well-known product, but has always been more or less a mom and pop kind of business.
So and that’s how we started Crepeaffaire in 2005, initially as an experiment to see whether people would understand and like it. And we found that most people associated crepes as a sweet treat.
Some people up north didn’t even know what a crepe was. Creep? Crepe? What is it?
Things have changed dramatically today. Travel has democratized. Lots more people get on the scent of international foods.
And today, I’m glad to say that people understand in this country and many other countries what crepes are. They understand that crepes are not just sweet treats, but they are savory meal solutions for all day parts as well. And it’s good to see that we’ve become the undisputed kind of market leader in the segment in the UK.
And we’re growing our brand internationally as well with presence in mainland Europe and in Middle East and looking for sites further afield. The idea really was that we or still is that we see crepes as an envelope which you can easily customize you can use them rolled, sliced, diced, triangulated various different fillings adjusted to local cultures as I said.
We’re active in the Middle East where obviously there’s a completely different eating culture. And yeah, the ground principle was to build a brand rather than just a product line which can expand in various different distribution channels both in the UK and further afield.
Daniel: The short answer is it depends. The longer answer is it depends, namely very much on where you are.
If I take a call it an extreme case, the Middle East, where we’re now growing dramatically, particularly in Saudi Arabia, it is a sweet tooth culture. And whereas we are effectively also in a savoury game, the product is still much seen as a dessert approach.
So about 90% of our business approximately in that business in crepes is sweet. The remainder savoury.
In the UK, which is our home market, the situation is dramatically different and this has really more to do with consumer behaviour depending on where we are.
In a shopping mall, for instance, the general consumer would gravitate towards the more classic lunchtime kind of concepts for their lunch, whether that’s pizza, salads or burger or sandwiches and will see Crepeaffaire or crepes in general more as a sweet treat and therefore it’s skewed to more towards sweet.
And also, that means that our footfall pattern or customer pattern is more stable during the day rather than lunchtime or dinner peaks. In other sites wether it’s more of an office destination, where more residents, where there is more a different type of dwell time and shopping pattern, it’s also savoury.
We’ve come to the point where we, on certain sites where we started out with 80% of our probably being sweet that is now more or less split 50-50. And for us that’s extremely important because we really want to be seen and perceived as an all day meal and snack solution rather than just being pinched, hauled into the sweet segment.
And this is really the reason why a lot of malls or interchanges that like to have F&B like to have us quite simply because one can fulfill all day parts.
Daniel: 60 to 70% of our product line is more or less the same across the board. And this is you get universal consumer tastes almost everywhere in the world nowadays, and this is around chocolate, about fruits and so forth and so on.
Again, Middle East, where there is a different eating culture, where there is a halal culture, we’re catering to other religious groups as well, obviously adjustments need to be made.
We’re looking currently at entering the US whereby it’s not just about different eating habits, but it’s also about different patterns of consumption. People will come in for breakfast, they will drive to a place to have a breakfast, for instance.
Where we need to be a lot more sensitive as well to peripheral products that go into the mix, whether you’re looking at yogurt pots and so forth and so on.
But in essence, the Crepeaffaire brand is a hard brand in that we have a very clear and strong brand identity. You see that in our color coding and our furniture.
However, we don’t want to be seen as a chain. We want to be seen as a group. And the advantage of being a group, it allows local outlets and local cultures to adjust the menu, to adjust also layouts and so forth and so on, to different cultures.
Daniel: Yeah, I think that’s a good analogy. You mentioned McDonald’s, I’m an enormous fan of McDonald’s, even a very standardized chain like McDonald’s has some time ago come to the realization that local differentiation is very important.
If you look at the local differentiation in terms of products and also layouts, McDonald’s has been leading the way, it’s not mutually exclusive. You can have a very strong brand, but you can still be locally sensitive.
I would say that on the other side of the spectrum, and I’m not saying anything negative about it, but it’s certainly not something that we are certainly not would be a Subway, which wherever Subway you go to in the world, they will always have fake walls and a certain product line and it served them well. It’s not our approach.
Daniel: There’s a bit of a story behind it. I’m afraid that I cannot really bring into the brand story, like my grandmother from Brittany, who was having her own recipes and all that stuff. It’s a lot less romantic than that.
I grew up in Holland and yes, that’s the country of the pancakes, but I spend a lot of time during my youth in the south of France, where there was this famous crepe au Grand Marnier stand in St Tropez and which is iconic and I always associated crepes with holiday with good times and it’s a lifestyle product that I’ve always loved.
And again I think this is where at some point the idea came I’d love to do something again in hospitality and take something which can still be created rather than go with a concept like a burger or a pizza or a salad, which has already been invented and reinvented a number of times.
How can we take this simple crepe? How can we package it, promote it, define it, and improve it to become a global type of product.
And yes, there’s always been a love for crepes. And I sincerely believe that you can only be an entrepreneur if you have a passion for the product.
Daniel: How do people spend their money? Well, hopefully mostly with us but within Crepeaffaire.
The idea is we are not yet a sandwich. We are not yet a place where people go every day necessarily as they would go maybe to Pret a Manger to buy a sandwich.
We see more and more loyalty and we see more and more people seeing this as a location. But crepes are still very much seen as a treat type of product.
Coffee has a completely different profile. People are intent of having the same coffee very often every day, sometimes even more than once. And we pride ourselves on having a very good coffee, and we feel that coffee is a very important part of a business in order to basically get frequency in. And I think that’s the whole point.
So coffee represents today, depending on location, up to 20, 25% of our business. And the principles really be as relevant as you can be, not just with crepes, but with peripheral products that match the crepe concept and use coffee really as the frequency driver to get the right people in and to then have an opportunity also cross-sell them on crepes.
Daniel: I think coffee is a global phenomenon with some variations, and the Middle East is one where we effectively also do Turkish coffee.
But coffee is a universal element. And I think this is where we also to our business partners basically explain this coffee effect. It’s still a growing market. If you have a great and consistent product and you have the right training, the right beans, the right kind of approach there, coffee is a driving force.
We see ourselves as the coffee plus concept very often, and we also promote ourselves as a coffee plus concept, meaning that we do want as well, or sometimes better, what the Costa’s, the Starbucks and so and so forth do on the coffee side.
But we offer that “plus” which the classic coffee chains are not necessarily very good at. We find in terms of poor packaged food and overpriced and not necessarily the right quality, that we can give that plus to the consumer.
That we can give that plus to any of our business partners that we work with. Be they franchisees or other where you can easily double or triple your average transaction value using the coffee as a key driver to get the same people in at a higher frequency.
Carl: That’s impressive. Let me go a little bit into scaling the business. You come out of a probably well paid job at Procter and Gamble. Then you say, okay, I want to be an entrepreneur. So you start with a concept. You have the concept in your mind probably a long time. Then you take the decision to open the first shop.
Daniel: Yeah, I think it’s a mental process as a procedural process as well. I think from going from the corporate world and I did some things between Procter and Crepeaffaire but I think you first go through a phase of total euphoria.
You have the idea, you’re very enthusiastic about it. And then to get to the point where you actually have to fund it and you have a complete white paper in front of you.
So the first phase is you’re scared. It’s paranoia. Like, is this going to work? And I think once you have your first store up and running, which is really a laboratory, lots of trial and error, you learn a great deal from it. And it became clear to us after a few months in that this was a concept that was going to work and had the potential to scale.
So I think the initial stage is and for me was certainly was from the stage of enthusiasm and then fear to actually get it up and running to say, okay, now what are the learnings? What can we learn from this first store?
We can learn from consumer behavior and how do you get then to store two and then to three? I think two and three were kind of similar. You basically pick up the things that you’ve learned from your first stores.
You become a bit more adventurous in certain ways. You also downscale certain things that you thought would work and didn’t. You promote those that were better than you thought.
And that was a process that took about two years to get to store two and three, I think from store three onwards.
And before you go into national or franchising, that’s when structural changes start to come in. That’s when you realize that when you’re on your own as an entrepreneur, there’s not everything you know.
You need to start delegating a lot more. You need to have systems in place, be they financial, be they communication, be they inventory and so forth and so on. And you start cautiously.
And because in a starting business, there’s little money to basically fund this all. So it’s again been a lot of trial and error. I think where we got to now where we have a business which you know internationally now we’re not big, but we have 30 sites and there’s consistency when it comes to product, sourcing and marketing and other things.
And yeah, it’s it’s been a jump. And when you get to that point of ten plus, that’s when you need to make decisions on investment into systems. And I think that was the key thing that you need to start prepare for growth.
Daniel: It’s a bit a dual structure in that we tend to give our general managers, our restaurant managers quite a bit of freedom which is part of the attraction of working in Crepeaffaire. It’s not too formulaic but with a clear set of rules as well.
How are we organized? We today have a a UK CEO. I stepped down as the CEO actually a couple of years ago and I have the enviable title of founder, which means I can do a lot of fun stuff such as talking to you today, Carl. And so really from a day to day perspective, Alan Kerslake, who is managing the business, is very much the center of gravity in the headquarters basically managing the team.
But still very much on a on a very collegiate way in a very collegiate way. And this is what Crepeaffaire is all about. We’re not bureaucratic, but it means that effectively he needs to have a strict control in all our systems and the way we can develop outside of the UK, do new things, new product lines, new concepts such as Crepe and Roll, which is a new concept we just launched, is that Al and I work closely together on everything which is future.
So it’s fair to say I’m probably more focused on the future, on strategy.
Carl: You have the vision.
Daniel: Where as Alan is focused on the today and the nearer future, but it goes hand in hand. And I think I’ve made a great deal of mistakes of wanting to do too many things at the same time.
Focus is always very important. And this structure, this dual structure actually allows us to focus on the things that are important now, but also focus on those things that will be important in the future and makes the business a lot more fun as well to operate.
Daniel: Yeah, I think the priority initially was speed and efficiency at point of sale. And then how would that then connect to your back office to inventory management, which is really the Holy Grail to try to get a totally integrated kind of business.
That has always been a priority. We then very much looked at how can this integrate as well with real business results and labor management. Because again, in a food retail business, labor is very often your largest cost factor besides your fixed property and your food costs, obviously, which is extremely important to manage well.
So if you can bring this all together, that’s great. And I think in the earlier days we always tried to find that holy grail of this integrated system and we found that that was actually almost impossible. And it’s really more of a best in breed approach to take and make a lot of mistakes.
And we made our great deal of mistakes in terms of being sometimes overpowered perhaps by certain technologies or suppliers who said, this is fantastic, you’ll turn around things very quickly and easily, only to find out that once you pick up a new piece of technology, it also includes it also involves your staff getting used to it and wanting to use it.
I’ve been in my my past corporate life, I’ve been involved with much larger companies where extremely expensive technology was brought in and three years later it wasn’t working.
Quite simply because there was no cultural fit with it. The second stage really came towards when delivery became very important.
Generally in a business where pre ordering integration of delivery orders and so forth became very important. Covid has obviously exacerbated the whole need for contactless ordering, pre ordering and and so forth. So we were one of the frontrunners with that. And today we are operating a system which is partly digital, which is still also partly old fashioned.
And we believe very much in that dual approach, the high tech high touch approach in the hospitality sector being very important.
The next step and I think this is also where obviously you are with Apicbase are very involved, is really looking at how do we standardize recipes, how do we translate certain recipes from one place to another, how do we work, which is what we’re developing now on the CPU central production unit basis, where certain ingredients need to be packaged, need to be put together and then transported somewhere else.
So I think the more you grow, I think, and the more you want to centralize certain things, the more the back office type of technology needs to play a much larger role.
Carl: As you mentioned, indeed, Apicbase does do a lot of the things that you just mentioned…
Daniel: I knew you were going to say that Carl.
Carl: That’s not what we’re here to talk about. I’m pretty much interested in something that you mentioned. It’s the change word. It is making sure that the people that work for you also embrace the technology that you bring into the business.
And can you tell us a little bit on how you approach that thing? Because indeed, you can choose whatever software you need, but if you have a business that doesn’t follow, if the people don’t follow, then the software won’t do anything in your organisation.
Daniel: I think before we talk about franchising, I think we need to set the example and we need to be convinced effectively before we convince others. And the way to do that is we do quite a bit of research and look around and sometimes steal, shamelessly steal ideas from others that already have implemented certain technology.
But I think the key principle to actually getting buy-in is to right from the beginning use your front line staff. The people who really make the operations work. The area managers and operations people to involve them right from the beginning in the process. When it comes to whatever system we want to implement.
It does not make any sense from a head office perspective to basically come put something in and it’s not being accepted. They need to embrace it. Sometimes you need to maybe push a bit on convincing to embrace. They need to work with it.
But we very much believe that it’s a big failure or it’s a recipe for disaster to basically just impose anything.
So involve your frontline staff from the beginning, make sure they understand that they test that they question that they challenge and that they see the great advantages to them and to our guests and customers. On the franchise level
I think it’s a similar story. Once we can demonstrate that it works for us, then we can demonstrate that it will work for them, although not always. We have partners, for instance, in Middle East, where it’s the tail wagging the dog because they are a few billion dollar kind of companies that have their own technology platforms and where it makes sense for us to listen to them and understand their challenges rather than impose.
What we’re trying to do as much as possible, is to integrate and to say, okay, this works for us, this is why it works for us.
What is it you do? Can the things that we have right now really be a real difference to you? We do not insist on putting technology into a franchise business just because it benefits us from a control perspective. If it doesn’t benefit our franchisee, because it would be the wrong kind of thing to do ethically and commercially.
And that seems to work. And this is how we have generally created across the board a relationship of confidence between our business partners, our franchisee partners, our joint venture partners and investors and ourselves trying to find win win.
Daniel: Yeah, and we’re still having that question sometimes. And our approach right now is it’s a dual strategy because we believe and partly answers your question I think we believe very strongly in company owned as a basis for further development, expansion and to keep the brand identity alive.
What brings or what brought us to franchising or what spurs us to further do this is that you realize that you cannot do everything yourself. Well, first of all, you realize there’s interest from other parties in your brand, which is always nice to hear.
And sometimes, particularly when you look at international development, the idea is basically build a win win relationship where we have a strong brand identity, we have strong systems, we have products, we have the knowledge to operate it, and the local partner is much stronger than we would ever be to operate in that region because they have the knowledge, they have the talents, they have the cultural skills of that region, the real estate and so forth and so on. And this is where you create that one and one is three idea.
Inside the UK where the question very often comes up, okay, you’ve got a successful concept, why franchise and why not do it yourself? We tend to be fairly London centric in what we want to develop ourselves quite simply because we have the organization that’s there. But but we cannot be everywhere. And this is where there are very extremely interesting and good opportunities.
You know, anywhere in the UK where there are organisations that just have the local organisational presence and where it just makes sense to work together with them to develop the brand and create that win win situation. So there is no deliberate we don’t like franchising or we don’t like company owned.
It very much depends on where we are and also on the strength and the chemistry between the partners, which is very important.
Carl: But and I don’t know how comfortable you feel discussing that, but I’m always a little bit curious to know franchise. It can go very good, but it can also go horribly wrong.
Daniel: Any business that does franchising will lie if they don’t. If they say we’ve only had successful and super stories. You’re absolutely right.
Franchising can be great. And franchising also has its risks. And I think the idea is to try to leverage the strength and minimize the risks.
As a general rule, if you’re mostly working with individual franchisees, these are entrepreneurs like I am, and they’re strong willed and that’s totally understandable.
They put their money into a business. And there are sometimes arguments or discussions, and the deal is basically not to let those escalate. The key, I think, to a strong franchise relationship is to be very upfront right from the beginning as to what the expectations are from both parties. And and then it usually will work.
Anecdotes about something that has gone terribly wrong… Terribly wrong, I wouldn’t say. But yes, and without going to detail, we’ve had a certain franchisee at some point start selling certain things that were absolutely outside of the remit of Crepeaffaire that didn’t make any business sense from a brand perspective where we were alerted actually by consumers who said, what you’re doing here?
And then we found out that effectively that was not the right thing. And we rectified this. And of course, there was the usual kind of discussion around it. But, you know, if you’re sensible, one comes to a conclusion.
I think I’d much rather talk about the franchising success stories and I think we have quite a few. I believe we have been exceptionally successful in rolling out a brand in the Middle East and we’re looking at new territories there as well.
There’s lots of scope, there’s lots of interests whereby effectively we were able to take that brand message and to take the DNA of the brands and adjusted to the local culture and whereby our franchisee partners actually have been starting to add new ideas that are extremely useful for them in a local market where we also said, well what you’re doing here is fantastic.
Can we use your idea in the UK. Where some of the designs that are currently being designed that are very much in tune with what what Crepe Affaire is all about. Because they understand it, they like it, they love it, they have a passion for the brands are just splendid and where we say,
Hey, what you’re doing there is wonderful. And I think that’s because it’s been a great relationship. We’re having fun together. We speak very often together. I think a continuous communication, whether it’s franchisee licensing partners or anybody else, is very important and to be transparent about opportunities, but also about issues.
So I don’t think we’ve had real disasters, not yet. Knock on wood. We’ve had some real success stories. We’ve been very, very lucky so far.
Daniel: So the the principal idea of Crepeaffaire, the classic Crepeaffiare as we know today is that the products can mainly be produced in each location, in each unit, and supplies are being delivered by our main suppliers directly to those units.
So there is no real need for such production. And also the ingredients that come into those units are relatively straightforward and can be locally be treated. So it doesn’t or did not so far make any real sense. Now we’re moving into a new era, a new chapter whereby we’re looking more and more into simplifying certain things for ourselves and for our franchisees.
We’re looking more about consistency and speed and where we have just launched a new brand, which is called Crepe and Roll, which is a centrally produced product that we are wanting to scale and which is now going into some very exciting new distribution channels we just launched with Primark.
We’re about to launch also in a cinema chain. We are integrating it into some new partnerships as well. Too early to tell, but there’s a real need now for this product for central production because that’s the whole name of the game.
Crepe And Roll is a freshly produced product, as the name says it’s a range of sweet and savory crap rolls filled, they are then frozen and are then distributed to different locations, making it very simple for an operator to then regenerate and bake off that product wherever they are.
Be that a unit, be that a third party location and from a very small footprint. So the whole idea here is how we take the crepe a step further whereby we make it even more available any time, any place, anywhere to take the skill to make it very simple, to make it very quick without losing any quality.
Small footprint, high footfall, low dwell time, speed and quality without missing the theatre that people still want to see. And this is where we take into production of the key product away from the operations, and we put it into a central production unit whereby the operator can really focus on the theatre, on the service, on the speed and on the lifestyle aspects of this new and edgy brand.
And it gives us tremendous opportunities for various distribution channels that we’re not in, including Cloud Kitchens and so forth and so on, and store in store. And this is where those new partnerships come about. So key to have consistency. To get that consistency, you need to isolate the production process.
And this is where the CPU comes about.
Daniel: Oh, at least ten times more than that. At least 300. And I should say that’s not just the UK that will be international as well. We believe there’s great growth opportunities for Crepeaffaire both outside and inside the UK as the classic crepe concept as we know it today.
There is enormous opportunity out there as well for our new concept Crepe and Roll. We just talked about much smaller footprint, more distribution opportunities, particularly store in store, other distribution in partnership with property owners, but also as standalone units. And we believe there’s tremendous opportunity for those as well.
I wouldn’t be able to at this stage give you a number, but I would say that we should be a global business with Crepe and Rolls. Well, and I would say at least also 300 units.
And I must say that this is not just going to be a company owned strategy. This is also going to be a partnership franchise strategy, which we believe makes sense for both brands.
Carl: Thank you very much, Daniel, for taking the time to have this conversation. I think there were some very nice insights for people that want to scale their own business. And I thank you very much for being in this show.
Daniel: Well, thank you very much, Carl and your team. It was very enjoyable.
Carl: Thank you very much for listening to this episode of the Food Service Growth Show and please subscribe to the channel if you want to hear more about how to grow your business. But for now, thank you very much for listening. See you next time.
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