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Gelatissimo brothers taste sweet success

Written on the 6 December 2012

BRW magazine
By Caitlin Fitzsimmons

Australian franchise Gelatissimo has opened its seventh gelateria in the Philippines, just a month after opening its third one in Kuwait.

The chain now has 45 stores globally, with a collective turnover of $20 million in the 2011-2012 financial year, the company reports. Although the biggest footprint is in Australia, with 28 stores, founder and joint chief executive Domenico Lopresti says international expansion is a good way to diversify.

“Last year we suffered in Australia because of the terrible weather,” Lopresti says. “We can ride through rough conditions locally the more we expand internationally and the more stores we have internationally."

The newest gelateria is in the SM Megamall, close to movie theatres, in the Phillipines’ Mandaluyong City.

As well as Australia, the Philippines and Kuwait, Gelatissimo also has a presence in Singapore, Malaysia, Indonesia and, surprisingly, Italy.

The company has won several awards this year, including the Franchise Council of Australia’s international franchising award and the business excellence award for retail, wholesale, import, export from the Italian Chamber of Commerce and Industry in Australia.

It has been a long journey for Domenico, 38, who started out as a teenager working part time in his father’s gelateria in Crows Nest on Sydney’s north shore. He founded his first company, a wholesale gelato business called Bravo Gelato, at age 21 and still runs that alongside Gelatissimo.

His business partner for both companies is his brother Marco who is six years younger and joined Bravo after doing a business administration degree at university. Marco looks after the administrative and operational side of the business and Domenico focuses on product and business development.

In 2002, the brothers co-founded Gelatissimo, with investment from John and Stanley Roth through Henroth Investments.

“We saw a gap in the market for gelato retail because we thought that no one was doing it right and no one was displaying gelato the way it should be displayed – you’d walk into a coffee shop and there’d be six to eight flavours but no one had created a concept around gelato,” Domenico says.

Originally the plan was to run the business as a chain of corporate-owned stores, mainly because the brothers were not familiar with the operational details of running a franchise business. However, in 2004 it switched to a franchise model for all but three stores – Circular Quay and Watsons Bay in Sydney, and Noosa, Queensland.

“We ran it as a company-owned model for a couple of years but we started to see cracks in the system,” he says. “In the first two years we made a few mistakes – we opened quickly and then we had to consolidate things and that’s when we switched to a franchise model. What franchisees do for a business is not what store managers do for a business – they’ve got skin in the game so the care factor really goes up multiple times than with a typical manager.”

Finding the right franchisee is crucial and the Lopresti brothers go through an extensive vetting process, including psychometric testing. Once they find the right person, it can take another six months to find the right location. “I’d rather wait for the perfect site than take an ordinary site with mediocre business,” Domenico says.

The formula behind Gelatissimo is that gelato is made fresh in each gelateria, using quality pre-prepared ingredients supplied by the head office and traditional methods.

Domenico says the chain doesn’t use artificial additives and the gelato retains its shape – allowing it to be piled into high mounds in the display case – because of blast freezing. The business doesn’t charge a franchise royalty but instead builds its margins into the products it sells to franchisees.

There is plenty more growth ahead for Gelatissimo, Domenico says, not just overseas but in Australia has well.

He has plans to open more gelaterias with franchise partners in Queensland, South Australia and Victoria and is in negotiations with a new franchisee in Western Australia.

Domenico forecasts double-digit growth for the business – last year growth was only 7.5 per cent because of the wet summer in eastern Australia but for the three years before that it was averaging 10-11 per cent a year.

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