Caffe Benea leading South Korean coffee and pastry franchise chain with more than a thousand locations in Asia is planning an aggressive rollout in New York City.
Caffe Bene has signed deals with more than 80 individual franchisees to open locations in the five boroughs, Min Hong, the company’s franchise development manager for the United States, told The Real Deal. The chain picked New York City as the focus of its U.S. strategy because of the brand awareness it would bring.
“Opening in New York, in Manhattan, is the best way to make people know our brand,” Hong said. “The Manhattan market is the most competitive in the U.S. If we can succeed in Manhattan then we can succeed [throughout the country].”
Last month, Caffe Bene tapped Andy Kim and his team at the mostly residential-focused brokerage Blu Realty Group to find locations for the franchisees.
Those franchisees pay a $35,000 one-time charge plus an annual fee of 4.9 percent on gross sales for the franchise rights. They must also pony up an additional 1.9 percent of gross sales as a marketing fee.
The Caffe Bene website lists neighborhoods such as Soho, Little Italy, Financial District, as well as outer borough locations such as Sunnyside and Brooklyn’s Chinatown, as target locations for stores.
Industry observers said a coffee chain would face several headwinds in an expansion drive in New York City, including record high rents in some neighborhoods, and strong competition from the market leaders, Dunkin’ Donuts and Starbucks.
Beyond those two, Caffe Bene can expect stiff competition in the city from other coffee and sandwich stores, such as the Oakland-based Blue Bottle Coffee, a high-end coffee chain which recently raised $25.75 million in a new round of financing.
And another South Korean coffee and pastry chain moved into the New York City market over the past several years. Paris Baguette, a division of the SPC Group, now has seven locations in the city.
It has three in Midtown including 6 West 32nd Street, two in Bayside and two in Flushing.
Caffe Bene currently has three stores open in the city: at 1611 Broadway in Times Square, 299 Seventh Avenue in Chelsea and 158-14 Northern Boulevard in Flushing.
Source: [via]
