SOMETHING’$ BREWING

Coffee house with gelato twist poised for supergrowth.

GRINDING OUT SUCCESS



The Coffee Grinder Franchise Corporation
Wells Fargo Tower
1105 Wooded Acres Dr., Suite 640
Waco, TX 76710
877-477-2507

www.thecoffeegrinder.net

Concept: The Coffee Grinder has been brewing exceptional coffee since 1996 and has developed into an upscale chain of franchised coffee houses. The Coffee Grinder offers a unique menu of gourmet coffees and teas, blended ice drinks, Italian gelato, gourmet pastries and desserts in a warm and inviting atmosphere. The Coffee Grinder offers 55 different flavors of coffee, with six brewed daily. Customers can also purchase whole beans to brew their own coffee at home.

Training and Support: The Coffee Grinder’s comprehensive two-week training program at its corporate headquarters in Waco, Texas, combines classroom and hands-on training in a Coffee Grinder location. All the fundamentals of establishing and operating a Coffee Grinder franchise are covered including food/beverage preparation, computer usage, daily and weekly cost controls, employee training, grand-opening advertising, equipment maintenance, insurance, payroll and inventory control.

The Coffee Grinder also assists with demographic studies, market analysis, site selection and lease negotiation prior to buildout.

It’s the speed of Jeanna Kish’s foray into franchising that is most startling. Only four months after signing on to become the first franchisee of The Coffee Grinder—a burgeoning Texas coffee house chain—Kish also became the company’s president and CEO after she and her husband acquired majority ownership in the concept that is looking to fill a unique niche in the fast-growing retail coffee industry.

While Kish’s ascension to becoming a franchisor has to be considered among the most rapid in the long history of franchising, the development of The Coffee Grinder is equally impressive. Begun in Texas in 1996, The Coffee Grinder has been serving the finest coffee blends from around the globe for the past decade, but it took a longtime franchising veteran to see its potential as a franchised concept.

Michael Grozier—who has started, developed, franchised and sold several successful companies—acquired the franchising rights to the concept in February 2005 after its founders had developed The Coffee Grinder into an established brand but chose not to pursue growth beyond their two existing locations.

Kish, who along with her husband, Freddie, owns a thriving auto repair shop in Waco, Texas, became The Coffee Grinder’s first franchisee in July 2005. But with an ardent desire to be more than simply franchisees coupled with an acute business acumen—their auto repair facility is the No. 1 seller of ACDelco parts in a Texas district that is larger than some states—the Kishes stepped up their involvement and acquired majority ownership in The Coffee Grinder in November 2005.

Now Kish and Grozier—who serves as The Coffee Grinder’s vice president of development, have positioned the concept to expand its boundaries. The first franchised Coffee Grinder location, owned by Kish, opened in Waco in February 2006. A second Waco location and one in Woodlands, Texas, outside Houston, are slated to open in August and October, respectively.

Projections call for approximately 12 locations to be open by the end of 2006 throughout Texas and in Florida, Arkansas and Washington, D.C. About 30 to 40 locations are projected to open in 2007, with long-term strategy calling for 300 to 400 locations throughout the United States. The biz is booming.

“That’s Michael and I, we’re shakers,” said Kish, of the aggressive and newfound exposure for the long-established brand. “We’re not the kind to sit back and watch. We like to get at it and get going.”

The retail coffee industry is percolating at an all-time high in the United States. Studies have found that more than 77 percent of American adults are daily coffee drinkers. And according to the Specialty Coffee Association of America, the number of specialty coffee drinkers has risen from 7 to 27 million in five years.

But The Coffee Grinder is unique. According to Grozier, it is the only franchised coffee house chain that offers Italian gelato in addition to coffee, specialty drinks and pastries. The diverse menu attracts the young as well as the old—from the traditional coffee drinker to the ultimate specialty coffee connoisseur—as well as adults and children with a sweet tooth for creamy Italian gelato or decadent desserts.

By combining its unique menu and pleasant, upscale atmosphere that features plasma televisions and high-speed Internet access, The Coffee Grinder provides friends, families and business clientele with a fresh alternative to other coffee house chains with limited menus and nondescript QSR chains.

“Our menu and atmosphere have something to offer all age groups,” Grozier said. “We’re the answer. We’re not like the larger coffee house chains and we’re not McDonald’s. We’re the answer in the middle that has something for everyone.”

Grozier is a lifelong entrepreneur, having started a custom van conversion business while he was only 16 and still in high school. Over the next decade he developed and later sold several different franchise companies ranging from a postal services/packaging company to a first-of-its-kind video kiosk business that rented only Top 40 videos based upon Billboard magazine’s Top 40 list each week.

Grozier later turned a successful consulting business into Global-Link Business Solutions, which offers both business consulting and franchise consulting and support services. It also offers franchising opportunities in three concepts: ADigitalU; Maids, Meals & More, a weekly concierge maid service; and Extermarite, a pest control service.

Grozier sought to add The Coffee Grinder to his umbrella of companies because he had always liked what he had seen of the concept as a customer.

“I recognized The Coffee Grinder as an opportunity because so many people want to get in on the coffee craze, but there aren’t many great businesses out there that you can invest in,” Grozier said. “The operation itself and its longevity said to me, ‘This has franchise written all over it.’”

At about the same time, the energetic Kish, also 46, had been looking to tackle a new challenge. Kish was a single mother looking for an honest mechanic when she first met Freddie Kish. He was that honest mechanic! They soon became a couple and eventually opened Freddie’s Auto Service in December 1998 with one technician. Within two years, their customer base more than tripled and today Freddie Kish’s Complete Car Care Center in Waco is housed in an 18,000-square-foot facility with 20 employees and 21 bays.

“I knew how desperate I was to find an honest mechanic, so I immediately saw the niche Freddie could fill after getting to know him,” says Jeanna. “I guess that’s my gift—I can spot a business opportunity, and then make it work.”

Jeanna had supplied the marketing and business skills to the auto repair shop, while Freddie had provided the mechanical expertise. But with the business maturing and Jeanna finally able to delegate some of her responsibilities, she set out to pursue a new opportunity.

“Everybody wants to find something that’s already successful, so I started looking for a franchise—something with a proven track record—vs. starting another business of my own from scratch,” said Kish, whose husband is not involved in The Coffee Grinder’s daily operations. “Coffee is such a hot commodity. We liked everything about The Coffee Grinder. We liked the ambiance, the coffee and being able to sell coffee beans that customers could take home. Everything fit.”

Everything, that is, except the extent of the Kishes’ involvement. Their initial franchise agreement was for three stores, but there were also discussions of the couple becoming area developers for the state of Texas. It finally culminated with the Kishes taking over majority ownership of the entire franchise corporation.

“They just had a real desire to be a bigger part of this new franchising company,” Grozier said.

The transition from cars to cappuccinos has been a relatively smooth one for Kish, especially with the assistance of Grozier. Relying on his many years of franchising experience, Grozier is helping by building the necessary corporate infrastructure, generating leads, establishing a training and support program and providing guidance on site selection.

“The most important role for me is to help Jeanna build the organization with the right personnel to service, support, sell and grow the business,” Grozier said.

Kish said her biggest hurdle has been learning the legalities of the franchising industry. She has also had to adjust her way of thinking, keeping in mind that any decisions she makes will impact more than just one small business and group of employees. Now, she has to deal with issues that will affect a network of franchisees.

“It’s a different world from owning a small business and having rules that apply only to you,” Kish said. “Now you’re adopting rules for the franchise corporation and the franchisees that will be joining it. When you make a decision it can’t just be for one store, it has to be for everybody.”

Grozier said more than 800 individuals have contacted The Coffee Grinder regarding franchise opportunities. Both kiosk and storefront packages are available that can be adapted to fit a wide variety of retail formats. Grozier said prospective franchisees see The Coffee Grinder as a ground-floor opportunity that offers a unique niche in the already-established coffee house industry.

“The market has already been established. We’re not reinventing the wheel. We’re just taking parts of the wheel and putting them together better,” Grozier said. “We have a better mousetrap. There is always room for someone to do better.” •