Gelatissimo began as a small store in Western Sydney under the name Bravo, which sold gelato primarily to restaurants and food-service operators before it became a retail-facing business in 2002. What’s sustained it over the past 20 years has been the fresh quality of the gelato itself. Franchisees buy and receive a delivery of kits with the raw ingredients that are mixed in with fresh milk and churned in-store and ready to eat in under half-an-hour.
“I think it’s unusual for a retail food brand to actually last 20 years in Australia,” Lord says. “We always hung our shingle on the fact that we have a very high devotion to be able to produce great quality to last.”
But the pandemic, of course, knocked out many retail and food outlets for a six. The gelato, sold entirely through bricks-and-mortar stores in high-traffic retail locations or tourist hotspots such as beaches, was no longer reaching customers under lockdown or tourists barred from entering the country.
It’s part of what inspired Gelatissimo’s entry into supermarkets, with the gelato now stocked in Coles. Getting on shelves and in people’s homes will help diversify revenue streams as well as reinforce the brand and encourage people into its stores.
Boosting brand strength will need to happen if Lord is to achieve the goal of increasing the store count from 42 to 100 and make Australian gelato popular around the world. It’s already global, with 25 stores across Singapore, Saudi Arabia, the US, India, and the Philippines. Between now and Christmas, Gelatissimo will open five more stores: Waikiki in Hawaii, Phuket in Thailand, another in Singapore, and two more in Australia.
As a former chief, general manager or managing director at 7-Eleven, Grill’d and Baker’s Delight, Lord is aware of the pitfalls of the franchising business model. Previous investigations by this masthead revealed a brutal business model that involved systemic wage fraud at the country’s biggest food franchise operator, Retail Food Group, owner of Gloria Jeans, Donut King, Michel’s Patisserie, Crust Pizza and more.
In early 2019, a bipartisan report by a sector inquiry into the $170-billion franchising called for a total overhaul of Australia’s franchising system and slammed existing regulation as “manifestly fail[ing]” to deter poor conduct and exploitative behaviour.
“Where franchising can go wrong is that they lose the essence of what has made the business successful right at the very beginning,” Lord says. This can look like growing too fast without ensuring adequate support for franchisees, he says, or charging too much for ingredients, for instance.
“If they’re concentrating too much on being able to ensure it’s profitable for the holding company instead of being incredibly profitable for the store, I think that’s where you end up in the imbalance of the relationship.”
Lord believes this is part of Gelatissimo’s success: the business model itself is built on reasonably strong foundations. “It was a matter of ‘how do we improve that even more’, instead of ‘how do we fix this little broken business model’.”
As it seeks to win new customers, Gelatissimo will face the same economic headwinds as almost every other business. Electricity, milk, and sugar prices are increasing, as are staff wages. The tight labor market will make workers harder to find.
“I think [price increases are] inevitable, unfortunately. But I do see that any future price rises would be far less than what we’ve needed to pass through our business in the last 12 months,” Lord says.
But despite rising inflation, interest rates and a probable slowdown in consumer spending, Lord is looking forward to the summer holiday period getting people out and about. It’s also the first in three years without any COVID restrictions, meaning higher tourist numbers.
“For many families, this is a nice affordable treat.”
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