Rising to a New Challenge.

Venezuelan bakery chain is betting on a U.S. sweet tooth.

IF ALVARO GORRIN GETS HIS WAY, TASTY treats like cachitos de jamon-pastries stuffed with ham--and frothy strawberry shakes, or batidos de fresa, will eventually be as familiar to U.S. consumers as a Whopper or Big Mac.

In heavily Hispanic Miami, it's already happening. Don Pan, a Venezuelan bakery chain transported to south Florida in 1995, boasts 18 fast food-style bakeries in the metropolitan area. The company is now poised to take its South American pastries across the country.

"We've created a consumer trend in south Florida that simply did not exist before," says Don Pan President Alvaro Gorrin, a 31-year-old bachelor who has lived in Miami for eight years. "Where else do you have this kind of variety under one roof?"

It's true. Don Pan sells bread, milk shakes, meat pies, sandwiches, pastries, cakes and even cell phones at one store. Outlets open before dawn to nab workers on their morning commute and stay operating until late in the evening for those who want a bedtime snack. The bakeries, with seating areas and gleaming display cases jammed with goodies, are clean, brightly lit and income-producing. Last year, the chain pulled in US$12 million in revenues--and it continues to grow.

Don Pan's reach into the United States has been a one-man plan. In 1993, a then 23-year-old Gorrin moved to Miami to study English at Florida International University so he could get his pilot's license. But a craving for familiar pastries prompted him to bring his family's bakery business stateside. "I was a baker," he says, "and there were no bakeries like ours."

He couldn't get loans in the United States, but his family anted up and he opened a store near the university. Don Pan quickly became a hot hangout for Venezuelan immigrants. Before long, word-of-mouth testimonials turned it into a popular stop for the rest of Miami's disproportionately Latino community.

Within a year, he'd opened two more Don Pan outlets. By the end of 2001, he'll have 26, all in Broward and Miami-Dade counties. By 2002, he hopes to have the franchising system up and ready for a national push. Gorrin claims that his office receives at least 10 calls a day from prospective investors.

"Who doesn't fancy something sweet?" asks Gorrin, whose grandfather created the sit-down, fast-food bakery concept in Venezuela in the 1960s after emigrating from the Canary Islands. "Portuguese, Germans, Italians, Americans, they all love this product," he says.

Gorrin's father and uncle inherited the family business and expanded it. Besides some 30 bakeries in Venezuela, the Gorrin family now owns franchising rights to Burger King, Papa John's and Subway in the South American country and plans to bring in Church's Chicken later this year. They also own interests in other restaurants, food companies, car dealerships, marinas and even a small bank--Banco Canarias de Venezuela.

Beyond bienmesabe. It's one thing to win the hearts--and bellies--of Latin American immigrants familiar with cheese-filled tequenos and bienmesabe, a Venezuelan dessert. But it's another to move into mainstream North America.

"I love this place, but I'm Cuban," says Don Pan customer Marcel Moreno. "I don't know if Americans would like it."

Franchising expert Erik Gordon says it's not necessarily the product that will be the challenge.

"Franchising is one of these things that looks fairly easy," explains Gordon, director of the Center for Retailing Education Research at the University of Florida. "You go to a law firm and you draw up franchise agreements and people are just dying to open your franchise because your bakery's so good. That's the easy part."

But, he adds, being deft at running a bakery doesn't guarantee success in running a franchise.

Still, Gorrin insists his nationwide strategy is bound to work. "McDonald's does well at the expense of Wendy's and vice versa, but they have to share the millions with each other," he says. "We're doing something that does not exist."

Still, he'll start the expansion in safe spots--cities with big Hispanic populations. Chicago, Los Angeles and New York are first on the franchising list. And when he goes to check on the franchises, Gorrin won't be flying there in his own plane. The bakeries have left him with no time to get the pilot's license.

"My hobby now is work," he says. He'll be doing plenty of it to steer this bakery into unknown territory.