Coffee Republic stands by franchise model

Coffee chain Coffee Republic says it will continue to pin its hopes on franchising to save the struggling brand.

The group today reported a fall in like-for-like sales during the six months to 25 September from £8.9m to £7.7m.

Chairman Bobby Hashemi said the 13.7% decline was "expected" following the planned closure of several non-core outlets.

He warned sales will now continue to fall as more of the group's coffee bars come under franchise agreements.

The 46-strong chain also said it had suffered as a result of unseasonably warm autumn weather.

The closure of non-core outlets and tighter control on central costs did stem pre-tax losses from £799,000 to £661,000 over the same period.

Coffee Republic now hopes to continue its focus on expanding its franchised operations, aiming to retain only 10-15 bars as owner-operator outlets.

It admitted a few sites had been earmarked for disposal, but said it hoped to open its first new site in four years in 2006.

The chain's deli model is said to be "performing strongly" with nine sites now converted, four of which are franchises.

by Jessica Gunn

Get your copy of Caterer and Hotelkeeper every week - click here to subscribe and save 25%.