Romania entrepreneur story: 5 to go coffee shop chain

Radu Savopol, the owner of the 5 to go coffee shop chain, aims to open between 70 and 80 locations nationwide by 2017, while this year the entrepreneur intends to invest about EUR 500,000 in expanding his chain to 40 locations.

 Anda Sebesi

 You recently announced ambitious plans for the development of your coffee shop chain by the end of this year both in Bucharest and nationwide. How much will you invest in this business expansion?

 We estimate that we will reach 40 locations by the end of this year, of which 5 will be nationwide and the remainder in Bucharest. The level of investments depends on the surface area of each location and how much work it needs. We estimate a total investment for this year of about EUR 500,000.

How many coffee shops do you have now and what are the main cities you target for expansion?

Read more about

Franchwise: Romanian brands would have resounded success abroad, but entrepreneurs still have reservations about expansion

read more

At present we have 23 locations opened, 4 are in progress and another 10 franchise contracts are signed. We target mainly county residencies but we are also in negotiations with other cities like Campina, Sinaia, Navodari and Otopeni. As for opening a location in malls, I can tell you that it is not an option for us. We have a project for the outside areas of malls but we haven’t opened such a location yet. We are in discussions with a mall that will be open this fall. Our business is a proximity one and so we don’t have a pattern for our potential areas of interest. The total investment per location varies between EUR 12,000 and 20,000.

You estimated a EUR 1 million turnover for the end of this year. How is this sum split between Bucharest and other cities?

At present about 90 percent of our turnover is generated by the locations in Bucharest. We have forecasted that EUR 1 million will be possible with 20 locations opened. The total turnover generated by the entire 5 to go group will be higher by the end of this year.

How many coffee shops are operated by 5 to go and how many are franchised now?

At present five locations are operated by 5 to go and the rest are franchised. We have started the process of transferring our locations that already have a history to those entrepreneurs that are interested in a turnkey business with a history of sales, as we intend to open other new locations.

How do you intend to fight your competitors?

I think that we have opened a new sales channel positioned between HORECA and retail. I cannot name it but I feel that there is a new business area through the range of services we have created so far. The competition is welcome and we are connected to all that is new in our field of activity, studying very carefully everything that happens in more developed countries in the coffee-to-go sector.

What is the idea behind the 5 to go concept?

The main idea was to create a Romanian brand with an attractive and very functional design in the coffee-to-go segment, with quicker service than what was on the market back in 2014. Another factor was the fixed price concept which was implemented for the first time in the sector of “to go” businesses.

What is the fixed price business model and how is it perceived by Romanian consumers?

The fixed price is the main factor that generates swiftness and the comfort that you can buy anything from that coffee shop for RON 5. It was welcomed but we needed to communicate in an aggressive manner to make consumers understand that everything costs RON 5.

To what extent do you work with Romanian suppliers?

We have managed to use Romanian producers such as Hiper Ambrozia, Joy Food, Cofetaria Octavian and Piramida. Some of them were already established while others have grown with us. Our customized 5 to go products are supplied by Romanian producers and we intend to increase the range of such products by the end of this year.

What are your plans for the chain for 2017?

For 2017 we will focus on the development of the team and our distribution platform. We also aim to increase our number of locations to 70-80. We have started a project extending our 5 to go franchise in Poland and we are likely to open our first locations in Warsaw next year.