Cracking the Australian market as a newcomer

Stan Gordon’s business mantra is to make money and have fun. And with four well-known food brands under his belt, Gordon is definitely doing both.

Born in South Africa, Gordon heads up the Franchised Food Company, which he founded after immigrating to Australia with his family.

After acquiring iconic ice cream brand Mr Whippy, Gordon built his business by purchasing Pretzel World in 2005, Cold Rock Ice Creamery in 2009 and Nutshack in 2010.

The world of franchising wasn’t new to Gordon when he came to Australia. In South Africa, he established several franchise operations, most notably Pies for Africa with the Mandela family.

But Gordon admits he underestimated the Australian market.

“My biggest mistake was when I got to this wonderful country, Australia, thinking I knew everything about retail, franchising and food,” he says.

“It was an entirely different market, and it really was my biggest mistake, but in fact it stood me in such good stead to go forward.”

After struggling to make the pie business work here, Gordon realised he would have to do things differently.

“If you look at Krispy Kreme – an American brand – it has failed in this country,” he says.

“If you look at Starbucks, which came to Melbourne even though Melbourne’s coffee rivals that of Italy, you can’t bring American culture to Australian culture because we’re different. It’s the same thing with meat pies.”

“Here, people buy one product at a time, with a coffee. In South Africa, you have maids buying dozens of the same product for a household… I realised you have to do it the Australian way.”

Rather than pursue the meat pie market, Gordon decided to take an entirely different path.

“I bought Mr Whippy. I changed it to try and give the consumer what they wanted. What I was taught, with my advertising background, is you need to create an experience,” he says.

“It’s not just an ice cream store – we do things a little bit different. I changed the position while still keeping the brand name.”

The Franchised Food Company, which consists of 160 stores, now turns over about $55 million. Rather than sugarcoat the franchising sector, Gordon is upfront about some of the expectations.

“We do no marketing for franchisees [and] everyone comes through the door to us – we don’t take people just with a cheque,” he says.

“We don’t like investment businesses… We want people to work in the business. Generally speaking, we don’t have many problems.

“We also understand we’re in a retail environment. There are a lot of franchisees whose command of English is less than acceptable in Australia.”

“In a retail environment, you must be able to converse in English. You must understand customer service and engaging the customer.”

Gordon would like to see this company grow organically, but is also considering another acquisition.

“I don’t want to do a Starbucks but I would like to get involved in another brand within the sector. However, if Nandos came and said ‘Buy us out’, I would say no,” he says.

“I want fun, quirky, strange brands… We’re not a serious brand. We sell treats – indulgent, naughty food. That’s the Stan personality coming through.”

This article first appeared on StartupSmart.