Cofix

Cofix (Hebrew: קופיקס‎, a portmanteau of coffee and fix) is an Israeli coffee shop, bar and supermarket chain established in 2013 by Avner "Avi" Katz. Most of the Cofix branches are in city centers, and other popular areas, but some are located in or next to educational institutions, such as the Haifa University and Ariel University.

The chain has 114 branches, most of which are regular branches selling coffee, food products, and occasionally a small selection of other products. The Cofix Bar part of the chain also includes alcoholic beverages, and Super Cofix is a Cofix-based supermarket. The chain offers all of its products at a fixed price of NIS 5 ($), including in the bar and supermarket branches. The entire chain is kosher.

Cofix is listed at the Tel Aviv Stock Exchange under AGRI. Upon its entrance into the stock market, it was valued at NIS 90 million (~$ million). As such, Cofix became the first coffee shop chain to be listed at TASE.

Business and impact

Cofix's entrance into the market caused a significant reduction in take-away coffee prices in Israel, notably in the Aroma Espresso Bar chain, which was forced to reduce take-away coffee prices. Some stores and chains reduced prices on coffee, sandwiches, and other products similar to Cofix's to NIS 5 to compete. This has been termed the Cofix Effect in major mass media outlets. Cofix's entry into the market has been compared to the "cellular revolution" which took place in Israel a few years prior and saw massive reductions in cellular communication prices.

Cofix's business model has led to a number of competitors, but as of 2015, only the Cofizz chain has remained as a major competitive force in the same market segment. The major coffee and fast casual restaurant chains, such as Aroma Espresso Bar, Café Café and others, also compete with Cofix. In late 2013, the Israel Antitrust Authority investigated claims that these chains coordinated prices in order to hurt Cofix's position.

Cofix operates both directly and through franchisees. Its first franchise was granted in March 2015 for the King George Street branch in Tel Aviv. In 2015, it entered the Tel Aviv Stock Exchange through the shelf corporation AGRI. The public owns 15.5% of the company. In January 2016, Cofix partnered with Israeli burger chain Burgeranch that would see Cofix products sold next to Burgeranch ones.

In June 2015, Cofix opened a supermarket chain, called Super Cofix, that contains a relatively small number of common items sold at competing chains, in smaller packages so they can be sold for a fixed price of NIS 5. The business model calls for a gross profit of 22–23%. Some major manufacturers, such as Tnuva, created new packaging lines to be able to supply Super Cofix.

Future plans

The chain's founder Avi Katz has set out to open 300 Cofix branches, with at least 10 Cofix Bar branches. One-hundred twenty of those branches are set to be opened till the end of 2015, and 180 by 2020. According to Cofix, it costs NIS 350,000 to open each new branch.

Cofix hopes to achieve a 3% market share countrywide, of the food market.

Internationally, the chain's founder revealed plans to open Cofix branches in Moscow and London. In Russia, the plan is to open 300 branches in Moscow and 700 elsewhere in the country.

Controversy

Cofix has waged a battle against its main competitor, Cofizz. Cofix claims that the latter plagiarized its logo and exploited the success of its brand, while Cofizz founders claim that they worked for Cofix without a salary and in exchange for unfulfilled franchise promises, which forced them to open a competing chain. The battle has reached the Israeli court system.

External links

• Official website

• Fearing the King, Cofix and Burgeranch team up