Australian chocolate franchise plans for 200 stores in China

Australian café franchise The Chocolate Room has announced an ambitious plan to open 200 outlets in China, along with stores in Europe and the Middle East, despite having just seven stores here.

The Chocolate Room, founded by Jim Richardson, was first established in Geelong in 2006. As the name suggests, it taps into the chocolate café trend, pioneered by the likes of Max Brenner.

In addition to handmade chocolates, chocolate drinks and chocolate food lines, The Chocolate Room offers a savoury range. There are seven Australian stores, with another three in the works.

But in India, the franchise has opened more than 50 outlets.

While this number is impressive, it pales in comparison to the number of stores planned for China, where the company plans to open a whopping 200 outlets in four years.

According to Richardson, the first of five corporate outlets will be in Beijing, and is scheduled to open in April or May next year.

Richardson says there are several reasons for the big push into China and India.

“We selected China and India as these two massive nations with an emerging middle class… especially in IT in India and manufacturing in China. The growth potential is fantastic,” he says.

“[Consumers in these markets] need the money to come into the store, but there’s also this unending desire to be seen to be adopting western society.”

Richardson points out many people in China and India don’t drink alcohol, so cafés are also seen as a “cool place to hang out”.

In addition to China, The Chocolate Room is planning to open a store in outer London early next year, followed by two additional stores within 12 months.

And in October, The Chocolate Room will open its first store in Cyprus as part of another three-store strategy.

“We had an inquiry from the now master franchisee over there and we got talking. He loved the concept and we spoke about it for six months,” Richardson says.

“I was initially very sceptical [about expanding to Cyprus] – it’s only a holiday island… Until you go to these places, you don’t really understand.”

“Their café culture is absolutely extraordinary… Their cafés are 500 square metres. They’ve all got WiFi, enormous plasma TVs and people just go there and hang out.”

Meanwhile, an Australian-based company – with an office and warehousing facilities in Dubai – will take the brand into the United Arab Emirates, Hong Kong, Sri Lanka, Singapore, Malaysia and Pakistan. Dubai and Pakistan will be the first locations.

Richardson says he will divide his time between the company’s domestic and international operations, insisting the Australian stores are still “very important”.

“We’ll be dedicating staff to look after the Australian franchisees… I would like to have 20 stores here in the next four to five years,” he says.

The Chocolate Room isn’t the only Australian chocolate café franchise making waves overseas. Theobroma is expanding into the United Kingdom, Saudi Arabia and Singapore, having already launched in five other markets.

This article first appeared on StartupSmart.