Spending $150,000 on a machine that cooks the perfect goat cheese cajeta. Importing pearl sugar with the ideal melting point from Belgium. Baking fresh apple pies just to cut them into bite-sized chunks and blend them into ice cream.
When it comes to dessert, no detail is too small for Demetres president Kayvan Mahbod.
“That’s a different way of thinking than a lot of people in this space, but that is my focus,” Mahbod says, “just being the best at every single thing we do.”
That obsession with perfection is what has prevented Demetres from expanding beyond the GTA, kept its location count below demand, and why the brand spent nearly a decade buying back former franchises.
Caffe Demetre was founded by pastry chef Gary Theodore on the Danforth in 1989. Soon after the dessert-only restaurant had lines snaking around the block. Five years later Demetres opened its first franchise — still operating onEtobicoke’s Kingsway.
In 2004, Demetres opened its 11th and final franchise in Richmond Hill, where Mahbod, an Iranian immigrant who grew up working in his family’s Persian restaurant, began working at the age of 14. The following year, he was promoted to store manager.
Even after moving to London, Ont., where he earned a degree in sociology at Western University, Mahbod continued to spend long weekends working for the franchise. Eventually, Theodore took notice, and asked Mahbod to join him as the second employee at the company’s head office during summers.
Following Mahbod’s graduation in 2012 the pair embarked on a brand elevating project that continues to this day. That effort began with the opening of Demetre’s first corporate location in 2015 and continues after Theodore’s retirement in 2023.
Today, Demetres has 12 restaurants and five Scooped by Demetres stand-alone ice cream stores, with more than a million combined guest visits per year, while 18 of its award winning ice cream flavours are also available at 600 grocery stores across Canada including Loblaws, Metro, and Real Canadian Superstores.
The brand’s strong commitment to quality, however, has created challenges in an era of skyrocketing food prices.
“Our costs have gone up by double digits every single year, non-stop,” Mahbod says. “It’s been torture.”
The Star caught up with Mahbod over tea, cake and ice cream at the brand’s first corporate location on Dufferin Street near Yorkdale to chat about Demetres’ enduring appeal, why it hasn’t expanded beyond the GTA, and how its commitment to quality is faring in the face of rising food prices.
How did you start working in the food industry?
I grew up in restaurants.
My parents opened a Persian restaurant in Richmond Hill in 2001. Even before that my mom worked as a chef, and I used to spend all my time in the kitchen as a kid. They opened their restaurant when I was 11 and I just started washing dishes to spend more time with my family.
When I was 14, I got my first real job at Tim Hortons working with my best friend at the time. Then this place was opening next door called Café Demetres. I had never heard of it, but my friend said we should apply.
They held a group interview, and my friend bailed, but I was such a keener that after the interview I asked how I could help. I literally stayed there helping them assemble chairs, fold menus and clean up, even before I was offered the job.
Tell me about Demetres’ history
The founder, Gary Theodore, was a partner at a restaurant when he was young where he was responsible for pastries and desserts, and when he got out of that business, he wanted to start a restaurant that was just desserts. It was such an obscene idea: a restaurant with table service, hosts, wait-lists, where you order at the table like a restaurant, but they only serve dessert.
Originally the focus was on cakes, pastries and ice cream but then he pivoted to crepes and waffles served with ice cream. At first customers rejected the idea but he did everything to get people to try it, even giving it away for free, until he converted them.
How did you end up in the corporate office?
The franchisee of the Richmond Hill location made me general manager of that store after a year. So, for three years in high school, I was doing scheduling, hiring and firing. Even when I went to University, I’d spend holiday weekends in the restaurant.
At some point the founder noticed this young kid managing the restaurant and invited me to work with him in the head office over the summers and Christmas break.
What kind of work did you do?
At first, it was just miscellaneous things but after I graduated in 2012 there was an intense period of evolution. We were evolving what we were as a brand and making a lot of changes back-to-back — creating new menus, revamping ingredients, updating our marketing, our website, our uniforms.
The biggest change came on June 8, 2015, when we opened this location on Dufferin as our first corporately owned restaurant.
We opened this location as a pilot store to test new ideas and systems before passing them off to the franchises, but one corporate store begets another. In December of 2024, we bought the last franchise, which was the one I started at in Richmond Hill. Now we’re entirely corporate owned.
From the outside it might seem like there hasn’t been much growth, but each store that became corporate-owned was as much of an investment as a new location.
Why hasn’t Demetres expanded beyond the GTA?
My focus is on being the best, not the biggest.
That’s a different way of thinking from a lot of people in this space, but that is my focus: just being the best at every single thing we do. That’s what led to the transition to corporate stores, which is harder and more stressful, but allows us to execute at a higher level.
For example, if a crepe grill stops working, there’s a specific person who will drive from our office in Woodbridge to fix it. Right now, that’s a reasonable drive, but we can’t expect that person to go to Ottawa, or Calgary or Vancouver.
If there’s a staffing issue or an IT issue, or if we need to send our pastry chef to test something, our team can drive to any one of our restaurants. I believe we can executive this vision better if all our stores are within driving distance.
I know that if we were to sell this brand or put someone else in charge that would probably be the first thing they would do, but at the end of the day I’d rather spend my time doing the best I possibly can, and for now that means staying in Toronto.
Tell me about Scooped
What makes our desserts so good, and what prevents the copycats from achieving what we have, is our ice cream. Almost all our desserts include our unique ice creams, which are 19 per cent butterfat. That’s extremely high.
That got us thinking about a sister brand that focuses on nothing but ice cream. At Scooped by Demetres we don’t offer cookies or brownies or coffee, even though it would probably make good business sense. We don’t even offer sprinkles or whipped cream. I wasn’t even going to offer cones until our brilliant pastry chef won me over with her brown sugar, buttermilk waffle cone — but that’s it.
It’s also a different experience than Demetres, and it caters to a different market. People come to Demetres for 90 minutes, but experience Scooped in 45 seconds. We can also put it in spaces that wouldn’t fit a 4,000 square foot restaurant, or at least not one we could afford.
How has inflation complicated your pursuit of quality?
Our costs have gone up by double digits every single year, non-stop. It’s been torture.
I remember seeing a report listing the categories with the highest food inflation. Number one was dairy, number two was chocolate, number three was nuts, number four was eggs, number five was flour; these are the building blocks of our organization.
As a business person, our options are to substitute ingredients, raise prices or lower profitability. We said right away that quality was non-negotiable.
In one instance, we had to take an item off our menu; an ice cream called White Chocolate Silk, which was basically Belgian couverture chocolate melted into ice cream. It’s arguably the best chocolate you can make, and nobody was crazy enough to put it in ice cream, and when chocolate prices went up it became almost comically expensive. We just couldn’t sustain purchasing this white chocolate, and I can tell you, people have noticed. Everywhere I go, people are mad at me for it.
That’s the only item we’ve taken off our menu. We are absorbing much of the added costs, but we’re also trying to get more efficient in our production, doing bigger batches and buying in bulk. Despite all of that, we just raised our prices in June by 1.8 per cent, our first price increase since 2022, during which time average Ontario restaurant prices have increased nearly 16 per cent.
What’s next for Demetres?
Our focus is on improving and investing in our existing stores.
We opened Demetres in the Distillery District about a year ago, and there are more pockets for us in the GTA.
That said, slow and methodical growth has been very key to our success, and so we’ll continue to be patient.
