Chennai: Dough from dough is the mantra for the Peter Elligett, 43, managing director of the Australian company Cookie Man Pty Ltd (www.cookieman.com.au).

With the markets expanding, he plans to make India his dough base. Nearly 60 per cent of the company's A$20-million turnover comes from selling dough, and the balance from contract manufacturing of cookies.

Ex-McDonaldian Elligett's Cookie Man is the world's third-largest cookie chain (32 outlets in Australia and 78 in 12 other countries) after Mrs Fields, USA, and Millies, UK.

In India, Cookie Man has a joint venture, Cookie Man India. ''It is the first and only joint venture for us in the world. In all other countries, we have licensed the local players,'' says Elligett. The Indian company holds the exclusive license for the brand in South Asian markets.

When Elligett first joined Autobake, an Australian oven company with a single cookie outlet at the Myer's departmental store in Melbourne, Elligett sensed the immense potential for a stand-alone cookie chain. He bought out the outlet and the Cookie Man brand for A$1.5 million in 1997.

After the management buyout, it was time to invigorate the brand and the ''store-in-store'' concept within and outside Australia. Following the franchising model, he expanded the chain in Australia and licensed local entrepreneurs in other countries. While there are no ongoing service charges or royalties, Cookie Man makes its profits by shipping the cookie dough to franchisees / licencees from its 4,500-sq ft commissary in Sydney.

''By this yearend we will have 36 outlets, and 44 outlets by 2003 in Australia,'' he says. According to him, Australia has the potential to have 60 full-line cookie outlets. In Australia Cookie Man outlets are located in departmental stores and shopping malls where buyer footfalls are high. The company also does contract manufacturing for Arnott's and others.

Elligett was in India to announce the replication of his ''shop-in-shop'' model here, with a deal signed by Cookie Man India and the grocery chain Foodworld Supermarkets. He talks about Cookie Man's India plans. Excerpts:

What made you enter the Indian market?
The Indian taste buds. Australians and Indians have several similarities. Both like sweets and consume lots of coffee. The Australian market is nearing saturation level, while the potential in the Indian market is untapped. In my estimate, the Indian market can take at least 100 Cookie Man outlets.

What is your India strategy? Apart from expanding the retail outlet through franchising, we plan to set up a new and bigger commissary at an outlay of A$ 4-5 lakh. This is necessitated due to our deal with Foodworld Supermarkets, whereby our franchisees will have counters inside Food World stores. Two years later, we will enter the western region - first Pune and later Mumbai. We also intend to make India the sourcing base of dough for our proposed outlets in Middle East countries.

Is it economical to source the dough from India even for your Australian operations?
The freight economics doesn't support that possibility. It is true that 90 per cent of the ingredients are available in India. While the inputs are slightly costlier than in Australia, the cheap labour balances out that disadvantage. We already have a huge (4,500 sq ft) 14-tonne-per-day commissary taking care of Australian and seven overseas markets.

Can you explain the deal with Foodworld Supermarkets in Chennai?
What we have done at the Food World outlet in Kilpauk, Chennai, is a ''shop-in-shop'' deal. Basically it is a rental deal. We will locate a Cookie Man outlet (owned by our franchisee) inside a Food World store for a rent based on the outlet's monthly sales. We hope to convert 10 per cent of the footfalls in Food World into sales. And if that happens, the franchisee would break even within one-and-a-half years. The Kilpauk outlet will house the oven, and some cookie varieties will be supplied to counters located in other Food World outlets in Chennai. This reduces the initial investment of franchisees on equipment as also the rental rate, as the space requirement is reduced. We will be opening similar outlets in Food World stores located in Bangalore, Hyderabad and Coimbatore.

How about striking similar deals with coffee chains like Qwiky's, Coffee Day and Barrista?
It is the young crowd that frequents coffee chains. At the most they may buy a couple of cookies to have with coffee. Our economics lies in selling in bulk, and youngsters will not buy a quarter/half kg pack while going out. On the other hand, Food World customers are serious shoppers who shop there for the family, and there are more chances of big pack cookie sales.

Cookie Man India has been talking about appointing franchisees for more than a year. But you only appointed one now. Why this long delay?
It is true that we have been talking about this for quite some time. But we didn't focus our efforts on it, as we wanted to showcase the success of our first outlet (company-owned) in Spencer's Plaza. Last year the outlet logged a turnover of Rs 1 crore. We have invested A$1.2 million till date (including two equity infusions in recent times) and we have just broken even. Now we will appoint more franchisees. It should be noted that there is no direct competition for us now in this space while other chains like coffee face competition, entailing heavy investment.

Apart from sourcing the dough, a franchisee has to buy the oven from you.
Yes, that is true. But that is done to maintain the uniqueness of our product. Cookie Man doesn't make money from oven sales.

About your institutional sales in India - do you sell dough to hotels?
Our bulk/institutional sales are picking up. Corporates like Airtel, Touchtel, Polaris, Hyundai Motor India, Elbee, RPG Cellular and others are buying in bulk for gifting. The Park Hotel buys cookies from us in bulk. In Australia, 40 per cent of the revenues come from contract manufacturing.