Khaled Al Kawass was only 18 when he brought Café Supreme to Egypt, a Canadian brand that spiralled into an omnipresent chain as he introduced the sub-franchising model. In an interview with Startup Scene, he talks expansion, shifting models, and surviving in a country in crisis.
In the entrepreneurial micro-cosmos - that parallel universe where unicorns actually exist beyond the myth, where parlance is reduced to acronyms, where terms like ‘cliff’ or ‘boot-strapping’ will mean something completely different, and where funds come in ‘seeds’, they say there are two types of entrepreneurs; those who venture into business because they see an opportunity, and those who do it out of necessity. For Khaled Al Kawass, the 28-year-old businessman who extended a family business into a massive chain with 40 licenses sold, 24 branches, and 16 others to be opened in the next 2 years, his entrepreneur persona is a mixture of both.
“I would say I’m more of an entrepreneur out of necessity,” says the businessman as he traces back the inception of his family business, born off the ashes of a former franchise who suffered the blow of bankruptcy. “Back in the 90s, my family used to own the American franchise A&W, but somehow things went really bad when I was 15, and we went bankrupt. So by the time I was 18, I had no choice but to integrate with my family’s business and try to bring it afloat,” says the businessman, who now boasts 10 years in the market.
Now the head of Café Supreme, a Canadian-born café-restaurant concept that has extended to 24 branches across Egypt, the young entrepreneur says getting back up on his feet was as much a matter of strategy as it was of luck. “Luck is very important, it’s 80 percent of the equation, but luck doesn’t come to people who are sitting at home watching TV. You need to go out, go to meetings, and take chances. That way, luck will eventually come,” he smiles, as we delve into his journey turning a cafe business into something far beyond its initial scope.
“The achievement I’m most proud of is establishing the franchising business,” he says. Having surfed the waves of a country in constant transformation, Al Kawass found an opportunity in the F&B sector, as investors saw in the sector a safe haven in times of economic uncertainty. “At that time, everybody was very afraid to put their money in the bank or to keep it in Egyptian pounds because of the political instability, and a café investment looked like the safest. So we took advantage of that and started selling the sub-franchise,” he recalls, a decision that signalled a milestone in his entrepreneurial path, reshaping his entire business model - now focused not on selling coffee, but the know-how behind it. “Today, businessmen looking into setting up a café come to us to acquire not only the franchise but, most importantly, the know-how,” he stresses.
Back in 2012, when his company consisted of 350 employees, Al Kawass told CairoScene that he read every single feedback comment he received from his 2,000 customers at the time. Now, as his company ballooned into a staff of 1,200, Al Kawass’ sub-franchise chain rivals other international brands, leveraged precisely by that competitive advantage: his rigorous knowledge of the Egyptian consumer, and his ability to adapt and cater to the Egyptian market. "Coffee is for a very specific, niche customer. What people really drink here is Turkish coffee, tea, and shisha. Having a café and not selling shisha in Egypt is like having a bar in Europe and not serving beer,” he says.
But as he grew what originally was a small family business and redesigned its model, shifting directions and stepping into an arguably uncharted territory, he took home the intricate lessons that only 24/7 working shifts teach. “What I have learned about the Egyptian consumer is that they have a specific budget in mind when they go out, and they stick to it, “ he states. “You can raise the prices as much as you want, but they are not going to pay more; they are just going to buy less products to fit their budget, so you need to be aware of that when you are pricing your menu.”
It was that thorough understanding of the uniqueness of the Egyptian consumer's behaviour that led Al Kawass into reformulating the café concept, persuading the Canadian brand owners to re-shape the entire business. “I think what makes Café Supreme different is the extensive variety in our menu and our expansion plan; we were the first brand to introduce a menu in a café that ranges from sushi, to shisha, to really good coffee and even burgers,” he says, explaining the diversification that gave birth to Sushi Bay, a second brand within the café empire.
Having expanded into 24 branches - and 16 more to come - the entrepreneur dismisses the idea of a saturated Egyptian F&B market. “Most people at my age now are investing in Food and Beverage. It’s pretty huge, but not as huge as New York. People say we have a lot of cafes in Egypt; well, they need to visit New York, where there is a café in every other shop,” he says.
Balancing service with an ambitious expansion plan, the entrepreneur walked through the ups and downs of a country that has been undergoing constant change since 2011. “I went through a lot; I started at a very bad time in terms of political and economic stability, I have been through the 2011 protests and it was a disaster - we lost two of our three branches, which were totally destroyed in the protests. At that point I thought we are done, we may not get out of this anymore,” he recalls. But the hurdles and struggles of a country in transition, however, taught him one lesson he considers key to staying alive. “The most important thing is not to panic; not to take permanent, emotional decisions based on temporary circumstances. You end up regretting it,” he says. “Sometimes the best decision is to do absolutely nothing.”