Development of the Baimskaya Ore Zone: project launch
An Arctic Zone resident intends to open a roadside café in Murmansk
22.12 // CM North which became an Arctic Zone resident this December, has plans to open a roadside café. It will become the very first drive-in café in Murmansk that will allow its guests to get affordable restaurant-grade food and beverages without ever leaving the car. Alexei Zaitsev, director of CM North, tells about why drivers in Murmansk have been deprived of good coffee thus far, and shares his tips for successful franchising.
While CM North was officially registered as a business in January 2020, the actual idea of opening a drive-in café in Murmansk had occurred to the team a few years before. It all began when Alexei's best friend stumbled across an article in a popular business journal that told about a company called Coffee Machine. Coffee Machine was building a roadside café chain throughout the Far East and offering help to any other businesses that wanted to do something similar.
‘The article listed all the essential terms of collaborating with Coffee Machine, along with an initial investment estimate and a rough ROI timeline. And since my childhood friend and me were just in the middle of looking for a cool business pitch, so this really piqued our interest. Knowing there were no outlets like that in our region, we figured that a concept like this was bound to take off. So eventually I got in touch with the company and took a flight to Vladivostok for an in-person meeting,ʼ Alexei recollects.
He further comments that the Coffee Machine holding opened its first roadside café all the way back in 2011 and currently operates 69 outlets in 27 Russian cities under its brand. Alexei cooperates with his new business partners under a franchise. The key idea of a franchise is that a business owner buys the rights to a business model from a prominent company and then starts operating under its brand. This makes building up a customer base (and thus turning over a profit) much quicker. The franchisee uses their own money to open their business, while their franchiser helps them with procuring equipment and resources and organising their operations.
‘We are Coffee Machine's official franchisee in Murmansk. Coffee Machine is contractually obligated to consult us on purchasing equipment, training our staff and promoting their brand. In our case, the initial investments reached about 6 million roubles,ʼ notes Alexei.
Alexei and his friend were supposed to go into business in the spring of 2021, but their schedule was disrupted by the pandemic. More than that, they are still searching for the best land plot in Murmansk for their café. Alexei points out that a true roadside café must be located right next to a busy highway, and there are only a handful of those within the city limits.
The regional department of economics explained to the two businessmen that they could apply for Arctic Zone residency. Applications are currently open to small and medium enterprises, and, according to the department's representatives, the minimal investment margin is 1 million roubles.
‘We met all the requirements, so we rushed off to do all the paperwork, and in December CM North became an Arctic resident. We are already seeing the first benefits of our residency: thanks to administrative support from the local authorities, we are already seeing a lot of progress in our land plot issue which was previously at a complete standstill. We are hoping that we will finally get that plot in the nearest future and get down to building the necessary infrastructure, buying equipment and hiring personnel. This kind of synergy between the government and the business community helps to transform the Murmansk region into a comfortable place to live in, along with creating new jobs,ʼ says Alexei.