COFFEE REPUBLIC - about to boil in 2006?

TOB, I think you need to look at Costa Coffee. They say that getting a franchise from them will take 6 months or more. There are a lot of legal/technical issues that have to be sorted. With DOM they have a standardd franchise developed over many years, CFE are in their infancy with franchising.

4 franchises completed in 3 months is a pretty decent pace at the moment imo, they were taliking about 6 this year which would have been painfully slow.

As I pointed out higher up the thread, CFE could give their loss making stores away and just take the £17K license fee to make them profitable. What if they were to give away the 30 stores that they plan to franchise and just take the £17K per store franchise fee they would get £340K in one off fees plus (even based on the current average turnover of a Coffee Republic) around £38K per store per annum. These are royalties and near pure profit. So over £1m on a vey conservative sales expectation.

That from a £4.5m market cap company. I can see the reason why some might be sceptical but I can also see the potential, it isn't going to take much to get £1m in rofit from this co on a franchise basis. There's also the chance that if they get it right in a big way with international territories they make many millions per year.

So for me it's risk v reward as ever. But when I listen to the gloom, doom and lack of expectations from people looking at CFE it just makes me think that expectations are rock bottom. Definitely only seems to be half a dozen posters with anything positive to say which for me makes this look even more attractive.

CR