Julie: Opening a Kvik store is a big investment and you need a long-term business plan. Kvik actually has a team that can support you in creating the business plan, but ultimately, you are your own boss and you set your own goals.
Miguel: You have to invest like 250,000 euros for each store. In our business plan with no delay we were getting our money back in year four and start winning money in year five. That was the business case. But we’ll get there..
Julie: And now you’ve been delayed two years.
Miguel: But we’ll get there. I’m not really worried about this. We just, you just have to learn how to run the business. So that gross margin that it’s supposed to be 30–32 percent, we started with 22 because of our own mistakes but every new franchisee is going to go through that. So you have to start slowly.
You have to start hiring people when you need to hire them, thinking a lot about costs and waiting. Some maybe, you have to start some low profile, running low and then when you start learning more then grow with the business.
In my case we start really strong with all these things and really open with Kvik and after that we have to shift. It’s okay. We are okay. But I have been talking about this with the country manager a lot. [laughs] It’s not easy to go with the figures straight for any franchisee and just tell him, well maybe it’s just a matter that some of these new franchisees maybe they want what we call here auto-employment. You call the same?
Julie: Like self-employment?
Miguel: Self-employment. For me it’s a business to run and it should become a business. Maybe a six, seven million euros business with a structure, with people, with teams and that’s the ambition where I want to go. Where we will go. I’m sure about that.
But some of the approach of these first stores should be self-employment and if you make the approach in that way, I’m sure you can be profitable maybe second year. That’s to be profitable. Then to get your money back, some more time. But you’re not going to be rich with one Kvik store in Spain. I know that in Holland and all these countries they really sell more and the ticket they make for each kitchen is like twice what we make here. But not in Spain. So I think the approach should be different.
If you check all the franchisees in Spain they are all husband and wife. Because that’s self-employment of two. So if you have the two of them working in the store, then you don’t have to hire so much people. So then maybe the numbers will come faster. That was not my case. We have been shifting after some time to just be ready and not to lose money ‘til we open the second store.