Specialty Coffee Retailer is a publication for owners, managers and employees of retail outlets that sell specialty coffee. Its scope includes best sales practices, supplies, business trends and anything else to assist the small coffee retailer.
Issue link: https://read.dmtmag.com/i/38014
Who bucks Starbucks? There’s not a clear No. 2 franchise in the coffee business, but a budding franchisee still has plenty of enticing options. BY DAN CALABRESE L ook around at sites that deal with coff ee franchising, and you’ll fi nd one user question that comes up more oſt en than any other: How do I get a Starbucks franchise? Th e answer, of course, is: You can’t. All Starbucks stores are company-owned. But it’s no surprise that people who are attracted to the idea of being a franchisee would like to do so under the Starbucks banner. Like McDonald’s in the fast food industry, Starbucks is recognized for its ability to generate healthy revenues almost everywhere it goes. But the biggest diff erence between McDonald’s and Starbucks is that, while McDonald’s has Burger King as a perpetual challenger, always nipping at its heels, there is no Burger King equivalent in the coff ee industry. Jack Groot, owner of Holland, Mich.-based JP’s Coff ee House and a longtime consultant to coff ee shop operators, off ered the analogy – saying he has heard many franchisers vow to take solid hold of the industry’s No. 2 position. To date, no one has even come close. “My gut would tell me that 80 percent of the franchises out there in the coff ee world are not making money,” Groot says. “Th ey are most likely anywhere on their way from going out of business up to being able to pay all their bills and pay themselves some type of wage. But as a business owner, if the only thing you do is pay yourself a wage, then all you’ve really done is bought yourself a job.” But just because no one is ready to challenge Starbucks, or even assume the decisive mantle of second fi ddle, doesn’t mean there are no coff ee franchisers who can be held up as examples of success. 18 | August 2011 • www.specialty-coffee.com Based on interviews with industry experts and research on current statistics, here are some of the best examples of coff ee franchisors who have successfully found their niche in the market – even if they haven’t yet conquered the coff ee world: Caribou Coff ee. Th e Minneapolis-based chain has more than 400 locations nationwide, and while more than 300 of them are company-owned, Caribou has franchised more than 130 locations. “Th ey’ve identifi ed themselves with a brand that’s a very pine-lodge feeling, kind of come- away-and-relax,” Groot says. “As franchises go, they’ve done a good job with their quality program and their beverages.” P.J.’s Coff ee. Based in New Orleans and named aſt er founder Phyllis Jordan, P.J.’s footprint is still relatively small, with 34 franchises and eight company-owned stores. And while P.J.’s has been franchising since 1989, it has only been in recent years that the company has been aggressively seeking to expand its presence outside the New Orleans area. Jordan sold the business in 2002 to Raving Brands, a company that aggressively acquires and builds franchise brands. Raving Brands then turned around in 2008 and sold P.J.’s to a New Orleans-based, family-run company called New Orleans Roast and New Orleans Brew, which already owned fi ve P.J.’s franchises. “Like Phyllis Jordan, who founded this great coff ee company in 1978, our family has been vested in and passionate about PJ’s throughout the course of the company’s 30-year history,” says Paul Ballard, one of the partners in New Orleans Roast and New Orleans Brew. “Raving Brands has placed us in a very strong position to grow PJ’s Coff ee of New Orleans in the Southeast