Peter Irvine and Nabi Saleh: The Glory of the Bean

After just eight years in business, Gloria Jeans annual turnover was $85 million and the company employed 3,500 Australians.

That was in 2003, today, Nabi Saleh and Peter Irvine who started the Australian arm of Gloria Jeans in 1995 own the global brand, represent 12 nations and have 300 stores in Australia alone.

Price Waterhouse Coopers' 2005 Franchisor of the Year will not rest on its laurels. The foundations Gloria Jeans has set and the ongoing dream has them estimating growth of another 360 stores in Australia within five years. There is also the goal of increasing cups of coffee sold from 73,000 to 240,000 cups per day.

To talk to the two men behind the global phenomenon is to receive a lesson in passion and humility. To sit down with Nabi while taking part in a coffee taste test could almost convert the coffee abstainers: here is a man who lives, breathes and still pleasures from the taste of a good bean.

Peter is the more sedate of the two, however no less passionate about the mission, philosophy and values: to produce the best product, but also to serve the community beyond the retail persona through charity and community work.

The two form a unique partnership built on trust, loyalty and respect. Nabi refers to it as a marriage that began in earnest in 1996 when the pair formed Jireh International Pty Ltd, the company that holds the right to franchise Gloria Jeans. Though the partnership is now ten years old, it remains strong. And the dream that has carried them this far is still as relevant today as it was ten years, in spite of or even due to their vastly different skill sets.  

Nabi has over 27 years experience in the tea and coffee industry, beginning on the plantations of Papua New Guinea. Working for Australia New Guinea Holdings, Nabi was responsible for the marketing and manufacture of coffee and tea in PNG. In 1978 Nabi took charge of ASCO, a medium sized coffee company and changed the company's fortunes to the tune of 14 and three quarter of a million dollars ($250,000 to $15 million). He then went onto establish Columbia Coffee and Tea in 1983, Maranatha Imports in 1989, Praise International in 1994 and Tea and Coffee Traders in 1986.

Peter came to the partnership without a background in coffee, but with a strong background in marketing, retail and branding. He joined Australia's third largest advertising agency DDB Needham in 1963. In 1994 he was appointed the agency's Managing Director. He also worked as the agency's Media Director in Sydney and as General Manager, a position he held for five years. He worked with such franchising and retail giants as McDonalds, offering advice and establishing the Franchised Operators Discussion Group.

Their different backgrounds and shared values have allowed them to come up with a globally successful concept.

The creation of the concept

?Like anything in life you can have the best concept but not at the right time and it could be the biggest failure,? says Nabi. ?Timing is very important and the only way you ever know if the timing is right is by doing sufficient amount of research, a sufficient amount of surveys and testing your potential market to see the kind of response you'd be getting.?

Pre Gloria Jeans Nabi was supplying coffee to the major supermarkets and to the hospitality industry. One of his suppliers, Brothers Gourmet Coffee had acquired Gloria Jeans in the United States and sparked Nabi's interest to launch in Australia. ? Having done the research and having known that the market was ready that's when we launched. There is never any surety or guarantee, but at least we were that much ahead rather than going in cold, living in hope and dying in despair.?

Nabi joined forces with Peter, whom he'd met in church. ?He's a great guy and he'd had one job his whole life before he moved to become a partner with me. That shows to me the character and stability of the individual.?

As Managing Director of DDB Needham, Peter not only represented the major account holders but held sway over a large crew of hardened executives. Yet he says it was the right time to move on and he has no regrets doing so. ?If you've decided for good reason to move forward then you keep moving. If you continue to look over your shoulder, you'll ruin your future.?

He also knew that the issues people face in business are similar across the industries. ?It's just the new disciplines you need to learn. What you've learned over the years helps you master those things, not that you can master everything.?

The first thing the pair did was to write a mission statement that reflected the values, philosophies and dreams of a company. Says Peter, ?The vision and mission was put in place and then as the rights were secured the business plan was created. You need that to approach financial institutions and then you start putting together the people you need, the structure and how you will move forward.?

?The mission statement is something all in the company adhere to. I'm living a dream,? says Nabi. ?As life goes on, it's easy to forget the dream so we have a mission statement. If there is ever an issue we direct our team back to the mission statement. That's the foundation. You have one dream, one vision. There can be a few additions, subtractions, but the focus is singular.?

Nabi believes that once you have your dream and vision you can start building the plan. ? Where we are today is only because of the dream. We didn't become market leader by default or good luck. We set our course. This vision statement was written before we started the company so it's not an afterthought or a feel good statement. It's built on a solid foundation. If there is not a good foundation, it's likely to collapse.?

The statement sees Gloria Jeans as a market leader by meeting customer needs. It calls for Gloria Jeans to be pioneers at the cutting edge of the market and represented in all capital cities through rapid expansion.  

The vision is reality and more so, but it has taken time. ?Business is not a get rich quick scheme, it's a journey and it goes on for many years,? says Nabi.

The secret to Gloria Jeans longevity has been to recognise the industry's needs and concerns. Nabi says, ?If you are in a service industry you have to have a service heart. You have to be prepared to serve the needs of those people you come into contact with. At all times it is to look at what it is the customer wants. It's not what I want, or what Peter wants, it's the person paying the dollars who is keeping us all going.?

Identity

The original concept however, was far from the smooth roasted beans they serve today. The first two stores, which opened in Miranda and East Gardens (two weeks later), suffered an identity crisis and the two Australian founders had to re-think their strategy.

?There's a saying that if the horse is dead, dismount. If you keep riding, it's not going anywhere. You have to get off and make some changes,? says Peter. ?As we started to modify and develop the concept to what it should have been, which was a specialty coffee house, we started to gain some traction.?

Nabi continues, ?People keep asking us how it is that we have opened over 300 stores in less than 10 years. There is no quick way of getting there. It wasn't our dream that the first two stores we opened could be the death knell to our concept, but we were losing market share and dollars faster than we could contain it. We based our stores on the US model, which was totally un-Australian. People loved the coffee, they loved the product but they said ?where are the seats, where is the food?' It was a take away concept. We knew if we kept going like that we would not be in partnership too much longer. So we started to re-format. It was more like a gift shop concept than a specialty coffee outlet. It took us until March 1998 to polish the concept and that is when we began to franchise. But again it didn't fall into our laps, it was perseverance and believing in what you stand for.?

The Franchise Model

The pair began to franchise in 1998, however they received calls to franchise well before this. ?In the early days when we opened the first two stores we were receiving regular calls from people who saw the first stores and were interested in franchising,? says Peter. Yet Gloria Jeans Australia wasn't ready to build a franchise model. ?We said ?we'll take your name and number if you're interested and we'll get back to you one day'. That one day went on for quite a while.?

Their first franchisee was a men's fashion retailer. ?He said, ?I want to be the first franchisee and I'm willing to put the money up. I'll help you build this thing',? says Peter. ?He was prepared to take all that on so he became the first franchisee with managers of our second store who became co-owners of that franchise. After that there were people we knew who worked in retail and advertising and said ?I see a great future, I would love to get my son started.' Then ex-employees of mine from the Gold Coast who understood retail said ?we want to be the pioneers in Melbourne' and they moved to Melbourne to do it. The phone calls continued to increase. As we accelerated the pace we started to run little ads in the business pages of the newspapers and that generated more response. We still do that today.?

Gloria Jeans receives anywhere from 400-600 phone calls a month from people wanting to buy into the franchise. ?Not everyone's right, not everyone will follow it through, but out of that we get about 100 applications that are pretty detailed to complete,? says Peter. ?The beauty for us is the ability of the brand. The quality of franchisee inquiries is improving all the time.?

Good franchises need good people. People are the company's focus ? whether they are consumer, staff member or franchise partner. ?You have to recognise that growth is only achievable by people. You are constantly building a team,? says Nabi. ?After a year and a half we had to recognise that as much as we'd like to continue playing the game you have to become the coaches on the sideline building the winning team. The only way to build a team is to firstly choose the right players. We are very selective with who we bring into the family. This company is built on family and family values. It is not what you do that makes you the member, it is whom you are. We look for not only family oriented people, but people with passion. It's the commitment that we seek. And it always starts from the top and flows down. We set the benchmark.?

The takeover

By the time Gloria Jeans Australia was in full flight, the US arm had diminished from 300-odd stores to 140 stores in a season. At the same time Peter and Nabi were experiencing management and ownership issues with the US. ?They (the US) could see something that was successful,? says Nabi. ?They came over and saw what we'd achieved, the style of stores, the format of our stores, the customer base and franchise base and they were only too pleased for us to buy them out.?

It sits very well with them, to be accountable to us. They are now modelling and reshaping not only their new stores going forward, any stores that need refurbishment. We are now fine-tuning that further and getting stores worldwide to come and learn the foundation and principles that we've applied.?

The Australian model has been so successful that many additional nations to the 20 that currently hold Gloria Jeans licenses have applied to become part of the chain. A tour of the vast Wonka-like building (watching the beans explode through the chute Augustus Gloop style, and taking in the heavy aroma is something to behold and is surely a world of pure imagination) attests to this as Nabi inadvertently walks into a couple of European teaching classes. This is the dream of two men bearing fruit and gaining worldwide appeal.

? As you know the world is shrinking and people are travelling a great deal and the first thing they align themselves to is something that is familiar,? says Nabi. ?One of the critical reasons for us to do what we did (take ownership) developed during a visit of mine to Malaysia. I walked into a Gloria Jean's store and they were serving curry and rice! Now that is the furthest from who we are. I love curry and rice, but the fact is that the aromas and the odours contaminate your coffee. That's not a good testimony for a product that stands for quality and excellence.?

The last two years has seen Gloria Jeans blossom. The dream is alive and well. The vision is being prophesied. From two stores that weren't making the grade to over 300 in Australia alone and ownership of the brand, Peter and Nabi never lost sight of what it was they set out to achieve. ?To me, life is a plan,? says Nabi. ?You don't just wake up of a morning and make your decisions. You plan your day and set out to achieve something from the day. You don't let the day dish out what it wants to you, and then start talking about what a bad day you've had. The day is constant, morning comes and evening comes, what happens between is up to you and me.?

The pair will continue to expand nationally and internationally with international acceptance of the master vision making it easier to move into new areas of the business. ?The world is our oyster,? says Peter. ?We're not going to stop growing just because we think we've got enough. The master franchisees we now have, after taking charge globally, can see they have the potential to grow this. The franchising model many of them weren't utilising ? now they're embracing. No one trained them. They were given nothing and now we're doing that whole program. We're introducing banks and finance to them. We're introducing leasing companies worldwide. We're introducing franchisee partners, things the US never adapted.?

The goal is to have over 600 stores within five years. Given the rate of growth, this is not out of range and the goal will come to fruition because the vision and foundation is solid and the dream is unwavering.

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