Franchising will be icing on cake for fashion team

By Libby Middlebrook

It's difficult to miss the City Cake Company, especially if your tummy's rumbling.

Shiny Christmas balls dribble down the Ponsonby shop's front window and jelly beans and candles circle a bright blue cake perfectly shaped into a globe of the world.

The company is one of New Zealand's most successful specialist cake businesses, with stores in Ponsonby and Mt Eden.

Famous for its window displays and brightly coloured cakes, increasing demand has led the company to franchise City Cake Company, with the first outlet due to open in Takapuna early next year.

"Our cakes capture the imagination," said managing director Maureen Keene.

"We see our business as part of the fashion industry, a lot of our competitors are reasonably traditional. We're always developing new ideas and we present everything in a stylish way."

Mrs Keene and her daughter Tracy Baird set up City Cake Company in Mt Eden village in 1996, after running Solla Sollew Cafe together for nine years. Mrs Keene, who also ran a wholesale clothing business, saw a gap in the market for a specialist cake shop, producing European influenced cakes and desserts such as chocolate mousse gateau and lime yoghurt mousse.

"I always thought there was a need for this sort of thing. I think of myself as a customer. If we were having people over, there was nothing I could go out and buy in European style."

While Mrs Keene says they weren't "quite ready" to set up the business in 1996, a lease became available in Mt Eden three doors down from Solla Sollew.

The pair bought in another business partner, Susanna Pattison, who coordinated the design of the $120,000 cafe and kitchen. Churning out hundreds of cakes each week at $120 a pop for an individually designed standard-sized cake, Mrs Keene says business grew quickly and within 18 months the kitchen couldn't keep up with demand.

"The business got so busy by the second Christmas and we just couldn't continue running both businesses. We either had to pull it back [the cake business] or expand."

By Christmas 1998, the City Cake Company had opened a new store in Ponsonby and a large commercial kitchen in Mt Roskill to supply individually designed cakes for weddings, parties and corporate functions.

The business also took on another partner, Anne Ackerman, to handle marketing and window displays.

Since then the company's annual turnover has grown from $500,000 to $1.2 million. The company employs 35 full-time staff, including four chefs and a cafe designer, and sells more than 70 cakes a day during the weekends.

"The business was highly profitable going through the early stages. It wasn't expensive initially to set up the business, but to expand and set up a commercial kitchen took a lot of capital."

Mrs Keene says the delivery service has been swamped with orders from throughout Auckland, prompting the move to franchising.

"We spent a lot setting up the commercial kitchen which we won't get back until someone else starts utilising it. It gets to a point where you can't keep on pouring capital into the business.

"Franchising's going to improve our brand awareness, too. We could put more money back into the business to expand, but it suits us to help someone else establish a shop."

With a Takapuna franchise opening in February, the company plans to sell its Mt Eden store and franchise five new shops in Auckland as part of a two-year business plan. The company eventually wants to go nationwide, with stores in Hamilton, Wellington and Christchurch.