Smooth path tosuccess for CafE Flo

With the opening of its eighth restaurant in Chiswick, London, next week, Café Flo has reached a watershed in its progression.

For proprietors Russel and Juliette Joffe, the time has come to decide how to structure the next stage of growth for the London-based French bistro chain.

In the 10 years since he left his post as general manager of Odette's, Mr Joffe has carefully built up his own restaurant chain. Although small in number of outlets, Café Flo is widely recognised within the restaurant business for being innovative, pioneering and successful.

Recently, the company has almost single-handedly funded the development of two new restaurants - in Marylebone and Chiswick - and has doubled the size of its Belsize Park unit. The £700,000 spent came largely from cash flow and some bank borrowing.

But having reached eight restaurants and developed the systems and staff training procedures needed to maintain standards, the company is now able to expand quickly and with little difficulty, apart from financing.

Mr Joffe is not one for sitting in his Islington office, counting takings and signing invoices. He needs to get out and create new locations, although he does not consider himself a wheeler-dealer.

While in some ways he may have preferred to stay with just three restaurants, now that he has reached eight, Mr Joffe believes it is time to move forward more rapidly. He envisages increasing the pace of opening to three restaurants a year.

How that expansion will be financed and structured is now being decided by the Joffes, who own 94% of Café Flo and are understandably reluctant to dilute their shareholding.

But, as My Kinda Town showed last week, restaurant stock market flotations are back in fashion. "A window of opportunity is being offered now," Mr Joffe tells Caterer.

"We have to decide whether to go public or find other private investors. We also have to decide what's right for the people around us, many of whom have been with us since the beginning of Café Flo. A flotation would give them the opportunity to become shareholders."

He confirms that he is "talking to a lot of people at the moment" about a possible flotation. "But we won't do it unless it's with the right people. I don't want to be forced into this because some merchant bank wants to increase its fees," he says.

How has Café Flo become so successful without big backing (although it has had several takeover offers)?

Mr Joffe points out that Café Flo started out offering good-value French food in a bistro atmosphere long before the recession forced other high-profile chefs and restaurant groups into this sector of the market.

"You have got to adapt to the market. People have now caught up with us, so we have to look at our plans for the next five years."

Café Flo has prospered because its basic concept is to under-promise and over-deliver, which means customers come back.

Good food that is more than bistro food is another key factor. Chefs are given incentives, paid well and encouraged to be creative with the "specialité du jour".

According to Mr Joffe, in the past four years the company has become more disciplined. All food is bought from nominated suppliers, wine is bought direct from suppliers in France and chefs are required to do weekly stock-takes which reveal problems quickly.

Tighter discipline has led to cheaper food and higher margins. But the Joffes have passed on most of the savings to their customers.

"We are probably cheaper now than two years ago," says Mrs Joffe. "As we have grown, so has our buying power. But we haven't been greedy and have brought down menu prices."

While similar restaurant groups, such as My Kinda Town and Pelican, have expanded quickly and developed public profiles, Café Flo has chugged along quietly, developing its market.

In fact, the fast growth of other comparable chains suited Café Flo, says Mr Joffe, because it meant they could "maintain standards and grow slowly behind them".

Up until now the Joffes have not sought a high profile. They employ 175 loyal staff and have not needed to push themselves to either develop the business or attract staff. "Restaurants and kids: that's our life. I haven't got time to join committees and associations. I say what I have to say through my restaurants," says Mr Joffe. o