By Annelia Nixon

Tribune Business Reporter

anixon@tribunemedia.net

A Bahamian restaurant chain continues to target expansion to downtown Nassau, the Family Islands and other Caribbean nations despite challenges posed by its cost of goods increasing from 37 percent to 60 percent of revenue.

Chef Kevin Culmer, chief executive of Tropical Gyros, which successfully financed its development via a crowdfund raise through the now-defunct ArawakX platform, yesterday said he is still receiving interest from potential franchisees in locations such as Andros, Eleuthera, Exuma and Bimini as the restaurant opened its latest franchise location in Delaporte on New Providence.

“We'll probably maybe go Downtown if there's a person who wants to put a franchise Downtown,” Mr Culmer said. “We did open in Freeport. We did well initially, but we've had some challenges in Freeport. Freeport is a whole different community and economy right now. And so we've had some persons who have expressed interest for Andros, Eleuthera, Exuma and Bimini. So, you know, we're exploring those opportunities.”

Continuing to look beyond The Bahamas’ borders, Mr Culmer said interest has been expressed by “quite a number of persons” in the US, two in Jamaica and, “based on the Zoom I had last night, we're looking at Antigua and St Vincent as well.

“So, the possibility to expand Tropical Gyros internationally is there if we get the right strategic partner. We know that we don't have the financial capability to get it done yet, so we would be relying on strategic partnership and franchising in order to push it on the international level,” he added.

Mr Culmer said he wants to encourage Bahamian employees to become employers through franchise opportunities. Noting that the cost to bring in an American franchise is out of reach for most Bahamians, he said the Tropical Gyros model requires just $150,000 to launch a franchise.

“When you look at the cost of bringing an American franchise to The Bahamas, they won't speak to you unless you have a certain asset worth, like half a million, a billion dollars,” Mr Culmer said. “I think McDonald's, you have to have $1.2m disposable income, free and clear, in order to get a McDonald's franchise. So when you start looking at all the persons that have brought American franchises here, you recognise they've invested millions of dollars into it.

“Tropical Gyros franchise, we look at it as something that's way more affordable, like $150,000 roughly, to try to get something off the ground. And so it becomes more attractive to average Bahamians... but, more importantly, we give people opportunities. When we look at the amount of people we employ, we find that, as a company, we tend to pay our staff more than the average restaurant…

“We have seen the influx of the American franchise restaurants into this country; all of the major ones. We know the names. And when you sit down and look at the cost to try to purchase one of those franchises, you read that it's out of reach for many, many Bahamians. So what we decided to do with Tropical Gyros was to offer this opportunity to Bahamians at a very, very affordable rate where persons that were not considered part of the elite financial class of the country would still be able to afford a Tropical Gyros franchise.”

Mr Culmer said franchisees play a key role in the brand’s development. While he strives to provide as much logistical support as possible, he noted challenges faced by the food industry as a result of the rising cost of groceries.

“Every day our inventory costs are going up. When I started this business, our cost of goods was 37 percent of revenue. Now it's close to 60 percent. And so we are challenged every day with providing, first and foremost, our mandate of providing a healthy option for Bahamians but also an affordable one. Yes, there are times we may have to do a slight increase, just to meet our ability to keep the business open,” Mr Culmer added.

He said price fluctuations occur but, in order for operations to continue, he is doing what he can to get groceries at a cheaper rate and charge less for the food Tropical Gyros sells.

“I just had two Zoom calls this week with a group in Louisiana,” Mr Culmer said. “One is a hydroponic farmer that is producing produce hydroponically. They took me on a tour of their facility via Zoom where they are looking to provide us with all of our produce - our lettuce, tomatoes, bell peppers, onions, at a much lower rate than we're currently purchasing it here from our suppliers.

“We also in discussions with poultry farmers. There's a Black Farmers Association in America that is looking to just supply black-supported businesses in America. And so I also had a meeting with them yesterday via Zoom, where these people provide chicken for Tyson, this particular farming organisation. And so we are looking to see the best that we can do to bring our prices down.

“We do have some wholesalers here that are trying to find us the best possible price. Sometimes they have to go to different regions. That's my responsibility on a daily basis. I am encumbered with trying to find lower inventory costs not only for the company, but also for our franchisees, because they have bought into this business,” Mr Culmer added.

“They've invested their money to open up their location. They do all of their infrastructure, everything on their own. The only thing Tropical Gyros provides them is the licensing rights to trade under our name. And, of course, they purchase the inventory from us to prepare. So we are working diligently to try to find alternative measures but it's a challenge. It's a challenge. It is a challenge every day. But you know, if you're in the fight, you have to stay in it. You can't give up.”