what I want to try today is something a
little bit different a short sweet
response to a piece of news in our
industry today I want to talk about J a
be buying Preta Monge which is both
interesting and incredibly incredibly
boring what makes it interesting
they paid or going to pay 1.5 billion
for Pritam on J which which is a lot for
a business that makes only a hundred
million in profit a year they're paying
fifteen times that it's a 15 X multiple
which implies there's going to be really
really fantastic growth coming now prep
can't have about 500 locations most of
which are in the UK most of which most
of their profit is actually in London
and while I've expanded in the u.s. that
hasn't gone quite as well as you'd think
so if they've struggled to expand well
why is there this huge potential prep
makes about 818 million a year as a
business and if you work this out this
is kind of interesting
each Pratt location on average makes
1.75 million a year now for the kind of
business they have where they sell
questionable coffee and sad little
triangles called sandwiches that seems
like an enormous amount of money
considering what their sell is not
particularly expensive and this is the
thing that's interesting this is the
thing where we don't give pret enough
credit and enough attention yeah I don't
really like the product in terms of its
coffee for sure but they're all about
speed pret values their customers time
perhaps in a way that not many other
businesses do they have a publicly
stated goal of serving you within 60
seconds of you walking in the door and I
think they do a pretty good job of
getting there and that is hugely
important to an enormous number of
people that's how they're able to
process as many people as they do they
sure they have a lot of people on any
one time but they're still making good
profit they're still making eleven
twelve percent each year in terms of net
profit so their business model is pretty
sound but they value people's time and
if you have a coffee shop and you're
looking at this deal and you're thinking
how is that happening why would you buy
this business
it's because the model is actually
pretty interesting in the world of
specialty we haven't really really
valued our customers time we've been
very product focused and as a result I
think we haven't valued people's time
adequately we've made people wait often
wait just far too long for what they're
ultimately getting and in doing so I
think we've excluded a large number of
people who either value their time very
highly or just aren't willing to invest
the kind of time that we ask of them and
I think if we took a little bit of that
from pret it would allow us to access a
much larger community of people who'd be
interested in what we're doing and right
now one of the biggest challenges
specialty faces is growing its audience
right now the audience isn't really
growing but the number of cafes is we're
all competing for the same customers
instead of finding new customers and I
think embracing a little bit of what
makes pret so incredibly valuable a
multi-billion pound company embracing
valuing our customers time will be
extremely worthwhile so that is a little
business talk for today if you like this
let me know leave a comment down below
if you want to talk about something else
in the future give it a like if you
think it's worth me doing more of these
I'll try and respond quickly when pieces
of news in our industry come out I mean
if you if you didn't like it don't don't
push their dislike button though that
would make me feel bad he goes very
fragile