Streat cafes seek Scottish inroads

Published on Saturday 7 November 2009 16:37

ENTREPRENEUR Gerry Carey expects redundancy and cheap retail property deals to fuel the expansion of his Irish coffee shop franchise across Scotland.

Carey described his aim to open 25 to 35 The Streat cafes in Scotland as a "conservative" growth plan for the business over the next five years.

Franchise outlets have already opened in Glasgow's Silverburn shopping centre, with six others due to open in East Kilbride, Clydebank, Livingston and Aberdeen.

Franchisees, who pay 120,000 to 150,000 to open a cafe, have benefited from incentives offered by landlords. Carey says franchisees have got deals of up to 18 months rent-free or two-year packages that include rent-free periods and capital towards shop fit-outs. He said: "One of the benefits of expanding in a recession is people are looking for a change of lifestyle and they have some cash to open the business. On top of that, it is a buyer's market from the rental point of view.

"I have been in retail for 20 years and in the past you would have to pay a premium to a landlord to get in."

In June last year Carey acquired the master franchise for the cafe in Scotland. Typically, franchisees need to raise 30 per cent of the start-up costs, including a 23,500 franchise fee. Banks, including Clydesdale, HSBC and RBS have so far been involved in backing the new franchisees, often offering 70 per cent of the start-up costs.

Carey says the franchise is different from Irish sandwich bar chain O'Briens, which placed its UK subsidiary into administration in June. "There is no comparison – we have all-day breakfasts, for example, as well as sandwiches. We are very much about coffee. And we have free wi-fi for business people."

Carey was made redundant from his role as head of retail operations for Rangers Football Club after its owner Murray Group licensed its 22-strong retail chain to JJB Sports three years ago.

The Streat launched 11 years ago and now has 33 stores in Northern Ireland and the Republic.