ERP Success Partners Helps Quick-Service Franchisor Open 1,000 Stores within Five Years
Drinking tea is no longer just a habit; it’s a lifestyle that defines one’s attitude, mood and personality. Knowing this, Chatime has served up a wide variety of delicious teas to millions of customers since opening its doors in 2005. With over 3,000 locations in 62 different countries, the company—whose parent company is La Kaffa International Co.—now has its sights set on the US market.
In fact, Chatime US plans to open 1,000 new stores within the next five years. To support this ambitious goal, the company called on ERP Success Partners for help implementing NetSuite’s cloud Enterprise Resource Planning (ERP) platform.
The first three US stores recently opened in California, with many more to follow between now and 2028. “One of the solutions we always install to underpin the system strategies of a growing franchise is a good ERP system, and that’s always been NetSuite,” says David Nehme, a consultant with DNR Consulting Pty Ltd., a firm that helps drives profitability and improve genuine business value for clients like Chatime.
“A lot of organizations come to us with their growth stories and complaints about how their backend systems and strategies aren’t keeping up with that growth,” Nehme continues. “We work with them to strategize, understand where they are at the moment, determine where they want to be and design a roadmap for them.”
According to Nehme, that roadmap always includes an ERP that centralizes business functions, provides high levels of performance visibility across the entire organization and allows team members to collaborate effectively, regardless of where those individuals are located. Having worked with ERP Success Partners since 2012, Nehme called on the NetSuite partner to help implement the ERP for Chatime US.
“The US is a strategically important market where La Kaffa is relaunching. This venture, in collaboration with the Australian Chatime, is seen as quite important and strategic to launch 1,000 stores in five years and to be able to do that as efficiently as possible,” Nehme explains. “This entire digital strategy—which includes both NetSuite and ERP Success Partners—will play an important role in that 5-year plan.”
Right Out of the Gate
Tasked with managing Chatime US’ complete digital strategy—from point of sale to labor optimization to the back office—Nehme was instantly relieved when he learned that the company wanted to go into its growth phase completely prepared. Put simply, it didn’t want to use spreadsheets, disconnected software systems and manual processes to orchestrate the development and administration of its new US stores.
“They wanted to make sure the right digital platform was in place to support the company’s growth goals,” says Nehme. “With NetSuite, the organization has those scalable systems in place right out of the gate.” For example, NetSuite will allow the 1,000+ franchise owners to purchase ingredients from Chatime Global right in the ERP, where they can enter store orders, view inventory availability and submit orders that are sent directly to the company’s third-party logistics (3PL) warehouse team. That team has systems that integrate directly with NetSuite, which means all orders can be automatically ordered, fulfilled and shipped.
“There are a lot of automations that ensure that the store orders go seamlessly through the fulfillment process, with the dispositions then communicated back to the franchisor’s headquarters,” says Nehme. “Then, the franchisees/store owners are invoiced promptly and the payments are collected quickly.” Next, the company wants to apply the same level of automation to the orchestration of its marketing and standard royalty invoices.
Chatime US is also using NetSuite to record fixed assets and inventory, the latter of which includes perishable items that have lot numbers and expiration dates. The ERP ensures that only the freshest products are shipped out to its franchisees, and that expired or “about to expire” products are handled accordingly.
Managing Multiple Subsidiaries
So far, Chatime has gone live on NetSuite’s core financial modules and also integrated its new ERP with outside applications like its 3PL’s systems. Stores can also use the ERP to place orders. Now, the company is working with ERP Success Partners to “layer in” the next set of priorities, including more automation and some refinements to existing project processes. Soon, it will add NetSuite’s consolidation functionalities to manage multiple different subsidiaries.
“Chatime has five subsidiaries and each of them deals and trades with one other, so we have to ensure successful consolidation reporting in NetSuite,” says Nehme. “We need to do some tweaking to make that happen, all in the name of ensuring that we can manage things with a minimal number of people.”
For Chatime, ERP Success Partners also developed several customizations, including screens that the company’s franchisees use to place orders and transactional screens that were “altered” to suit the company’s specific business processes. Other customizations included one that enables electronic funds transfer (EFT) with Chatime’s bank and the special formatting of invoices, purchase orders and sales orders.
A Lasting Partnership
Reflecting on the role that ERP Success Partners continues to play in Chatime’s NetSuite implementation, Nehme says he’s always had a good relationship with the implementation partner’s young, energetic team members, many of whom have deep expertise in certain industry sectors.
“ERP Success Partners always brings its industry experience to the forefront to see if it’s of any benefit to us. I always appreciate those insights and they’ve made for a very good working relationship.” David Nehme, | Consultant, DNR Consulting