The Coffee Club bets on franchise confidence to drive next phase
The group is trading speed of growth for quality, backed by a loyalty model.
The Coffee Club is rebuilding its franchise foundations as Australian cafe visits fall and customer selectivity rises, with the group tackling procurement, discounting and occupancy costs to improve what partners earn from each transaction.
A recent report by Bey You and Westpac DataX in June 2026 revealed that cafe spending went down 1.4% year-on-year, driven by fewer customer visits despite average spending remaining the same.
Ahead of his appearance at the QSR Media Conference & Awards 2026, powered by Red Bull, on 12 October at the Sheraton Grand Sydney Hyde Park, Richard Hinson, CEO of Minor DKL Food Group, the operator of The Coffee Club in Australia spoke to QSR Media about the metrics he watches most closely, why the group is replacing two loyalty programmes with a single member-pricing model, and what he believes a healthy franchise system actually looks like.
QSR Media: In the last 12 months, what's your biggest success as a QSR leader?
Hinson: For me, one of the most pleasing outcomes has been seeing Franchise Partner confidence start to improve. We have spent a lot of time listening to our Franchise Partners and working on the things that directly affect their businesses, including procurement, discounting, technology costs and occupancy. We are starting to see better sentiment across the network as a result.
There is still plenty of work ahead, but I feel we have made good progress in rebuilding confidence and creating a stronger foundation for the business.
In your view, what are your top 3 pressing challenges or issues that you believe QSR brand leaders should discuss today?
Customers are more selective today, so we need to give them a genuine reason to visit more often without continually leaning on price or discounting. At the same time, our Franchise Partners are dealing with pressure across food, labour, rent and other operating costs. As a franchisor, we need to keep looking across the whole P&L for opportunities to help.
The third piece is confidence. If Franchise Partners believe in the direction of the brand and see an attractive return from their business, they are far more likely to invest in their stores, their people and future growth.
Where are you allocating the bulk of your investment in 2027, and what specific metric will determine whether that investment has succeeded?
One of our major priorities for 2027 is profitable customer frequency, and our new loyalty proposition will play an important role in that. We are moving away from our two existing programs to one which introduces a member pricing model synonymous with clubs, but unique in the QSR category. So rather than customers having to accumulate points, they get instant everyday value, and this gives us an opportunity to drive transactions and provide a sense of community by joining.
Our early trial work in South Australia has been encouraging, with more members who are spending more whilst also reducing overall discounting.
The metric I will keep coming back to is profitable transaction frequency. If customers are visiting us more often and our Franchise Partners are retaining more value from those transactions, we will know we are moving in the right direction.
Which looks healthy on the surface but actually worries you?
Average transaction value is one I watch closely. It is easy to look at customers spending more per transaction and view that as a positive result. But if they are visiting less often, you need to understand what is happening underneath the headline number.
That is why I prefer to look at spend, customer numbers and frequency together. We need to remain thoughtful about pricing. For me, the better long-term outcome is giving customers enough value and relevance that they choose The Coffee Club more often.
Visit frequency is falling across every age group under 55, and discounted orders have risen 90% year-on-year. What are you doing to give customers a reason to walk in more often without leaning on price?
What we are seeing is a more selective customer. People still want to go out and enjoy themselves, but they are thinking more carefully about where they spend their money and what they receive in return.
The main drivers for cafes are quality products, value and a warm and welcoming environment. So, we have been heavily focused on refurbing out stores so that they attract and invite people in and elevate the overall experience.
We have also been focused on product innovation and menu optimisation, with a specific focus on new and growing categories such as cold drinks, and what’s been an interesting finding is that they are more successful in refurbished stores, showing how together they are making The Coffee Club easier, more relevant and more enjoyable to visit.
Looking ahead, what's the biggest trade-off you are currently making or planning, price vs margin, speed vs quality, growth vs consistency, etc, and why do you think it works well for your brand?
For us, it is probably quality of growth versus speed of growth. We absolutely want to grow The Coffee Club, but I do not think growth for the sake of adding store numbers serves anyone well. We want the right Franchise Partner, the right location, sensible occupancy costs and store economics that allow the operator to earn a good return and reinvest.
That means sometimes being more selective about where we open and continuing to work hard on the performance of the existing network. One of the best signs of a healthy franchise system, in my view, is an existing Franchise Partner wanting to invest in their second, third or fourth store.
That is the type of growth we want to encourage.
