In addition to the story we published yesterday about the sudden loss of yet another Blenz location at Richards and Davie, Blenz has suffered perhaps one of their most fatal blows since the loss of their store at Robson and Burrard to a Yoga pants company.
If you were following this story over at the VCSFA you might remember the article where they had first reported the closure of this prime Pacific Centre Blenz location, and then the subsequent article where they published rumours of the possibility of Take Five replacing the long-time Blenz location which had suddenly shuttered its doors.
Rumours have become reality and the signs are up. Good bye another prime Blenz location. Hello another prime Take Five location.
Good bye another prime Blenz location. Hello another prime Take Five location.
This story is much more interesting, though, and sadly for the former franchisee of the location named Hossein, the story doesn’t end there, nor do the implications for Blenz. This quote from the VCSFA article, in an oddly prophetic prediction, summarizes the new situation that Blenz Coffee will need to explain to all future investors, and any current franchisee who cares about the future of their investment:
All eyes are now on Pacific Centre. Will it become another Lulu Lemon situation like at Burrard and Robson where a retailer from a totally separate industry takes over?
If it becomes a clothing retailer, or something completely removed from the food and beverage sector, then Blenz Coffee might be able to explain to this former (and probably rather upset) Franchisee that this location is not well suited for a retail coffee business, or their coffee brand or that the person who won the space had higher profit margins than them and are therefore able to justify doing business in Pacific Centre. It would be difficult for the former franchisee to have enough know-how to fight that battle.
If something like a Tim Horton’s were to open at 609 Granville, the Franchisee would then be able to present a good argument that Blenz Coffee just ‘let’ another similar business come in and ‘take’ their space, leaving them with nothing. However, Blenz might then be able to say something like ‘Well, Tim Horton’s is different. It’s more of a food-based model with cheaper price points – much different from the ideal Blenz customer.’
But if something were to open in the same space like a Waves Coffee, Starbucks, Take Five, Caffe Artigiano, or any other similarly-branded Italian-style coffee shop (especially those our Francouver list) with the standard espresso-based offerings and a few pastries spattered on the side, then the question will quickly become: How hard did Blenz the Canadian Coffee Company negotiate with the Pacific Centre landlord to maintain their prized location and assure the longevity of the Franchisee’s investment?
How hard did Blenz the Canadian Coffee Company negotiate with the Pacific Centre landlord to maintain their prized location and assure the longevity of the Franchisees investment?
If the answer turns out to be ‘not very hard’, then the next logical question would be “why not?”.
But only time will tell as the lease-hold improvements take place behind the boarded up windows at 609 Granville Street.
In this eerie prediction of what turned out to be the worst case scenario for the Vancouver brand, an entirely new can of worms has been opened and begs the following questions for anyone interested in investing in a Vancouver coffee shop franchise:
- Will Hossein go after Blenz for compensation for the evaporation of his asset as Blenz quietly allowed the location to be handed to its direct competitor?
- If Hossein goes after them legally, how will Blenz survive the costs of the mounting series of law suits that are hitting them?
- Will all the other Blenz locations be disappearing one by one in a similar fashion and replaced by its competitors like it did here and in New Westminster?
- Does the franchisor care whatsoever about the franchisees investment, or their own brand, for that matter if they are handing over their locations to their competitors?
Although it would be simple to paint Take Five as the winner and Blenz as the loser here, Take Five also needs to be accountable and answer the following questions to its current franchisees and any potential future investor in the brand:
- Was it disclosed to the franchisee on record at 701 West Georgia that head office plans to open another location less than a *30 second walk away*, at 609 Granville Street (conveniently named ‘Canaccord’ instead of ‘Pacific Centre II’) ?
- If it was disclosed to the franchisee, was it disclosed before or after the franchisee purchased the store just up the escalators from this new one?
- What clauses are in the Take Five franchise agreement to protect the franchisee from head office opening another location next door to them like this in the future?
As we move quickly towards the adoption of Franchise legislation in British Columbia, it will be interesting to observe which brands will survive in the new environment of full disclosure.