FranSynergy Acquires Cuppy’s Coffee, Smoothies & More

Business is a fast paced and sometime difficult road to manuever. It is also a series of evolutions from startup to completion. And it is in that process that Cuppy’s Coffee is proud to announce that FranSynergy has acquired our fast growing coffee company to navigate it thru the next stage in that evolution. Below is a copy of the letter sent to all franchisees acknowledging the transition and welcoming the new management team to Cuppy’s Coffee.

Dear Franchisees,

Cuppy’s has grown leaps and bounds since our humble beginnings in May of 2006. We currently have more than 231 franchisees nationwide and 73 open stores, with many more stores in the works!

It’s our ultimate goal to see the Cuppy’s brand grow strong and be successful. In order for this to happen, change is inevitable. Our objective is to always keep you, our franchisee, up to date as these changes occur.

With that in mind, we have some really exciting news! We are pleased to announce that FranSynergy Inc., lead by Dale Nabors, CEO, has acquired Cuppy’s Coffee & More, Inc.

Dale Nabors has over 25 years of franchising experience and worked for the Dwyer Group from March, 1995 to August, 2000….

To read the entire letter follow this link.

McDonald’s Foray into Specialty Coffee

     The McCafe. The McDonalds® hamburger empire has for some time been interested in serving espresso based drinks in its stores. This year there has been considerable press concerning the financial impact this venture will have on the specialty coffee industry. Although mainly targeted at Starbucks® the nation’s leading coffee company, the questions still begs to be asked: How will McDonald’s venture into the specialty coffee industry affect your store sales?

      McDonalds has always had a very lucrative morning breakfast rush with coffee accounting for 5% of the ticket. Their coffee has somewhat been palatable to the consumer in a rush to get to the office. But with more and more consumers willing to spend the extra money for a premium coffee, McDonald’s tactics makes for a very good reason to capitalize in this segment of the coffee industry. In a recent interview in the The Atlanta Journal-Constitution columist Leon Stafford asked Don Thompson, president of McDonald’s about their venture into the specialty coffee arena:

Q: McDonald’s is upgrading its coffee products, rolling out more

premium blends. Some have even speculated that McDonald’s could be taking on Starbucks. What are your thoughts?

A: Espresso-based drinks [are] a huge market opportunity. Our efforts in this arena are not focused on any competitor. What they are focused on are our customers and what their drinking habits are. And when you look at the espresso-based drinks, it is a category that is growing tremendously.

   The remaining interview focused mainly on McDonald’s business strategy and relationships with its vendors. It may be to early to gauge the impact that this move will have on smaller coffee shops around the country. But the announcement may have impacted stock market shares for both McDonalds and Starbucks.

      Other analysts and consultants have a different take on McDonald’s move. In an online interview with columnist Kristen Cole for WCBSTV.com Judy Ganes had this to say:

     “For the consumer it’s a win-win,” said coffee consultant Judy Ganes. “There’s better coffee at more locations.”

     Ganes tracks production and pricing of coffee and says Starbucks first poached from McDonalds’ playbook by offering drive-thrus and breakfast and lunch. Now the roles have reversed.

    “McDonalds is hoping this brewing competition will add a billion dollars to its bottom line and is also promising consumers their coffee will cost 60 to 80 cents less,” she said.

     But one thing is for sure, consumer’s will have more choices for its specialty coffee needs. To compete for those choice demands, smaller coffee shops will need to start building a loyal customer base today. When McDonalds roles out en-mass its McCafes, coffee houses will have already established their customer base. As the novelty of the McCafe wears off, this will be one of the best opportunities to fill a void left during and after the Starbucks/McDonalds battle for coffee dominance.

     Creating an atmosphere where your customers want to be is very easy to obtain. Customers want to feel special, make that happen. Get to know your customers by their first name and their choice of coffee. Customers want a quality cup of coffee for the prices they’re paying. Other ways you can build and keep your loyal customer is to educate them to the subtleties of espresso based drink. Today’s connoisseurs are more than eager to take in information about what’s going into the preparation and production of their coffee. Offer your customers loyalty cards for their patronage. It doesn’t have to be a lot, it’s the gesture that makes all the difference. Select a few loyal customers and teach them how to make an espresso based drink. Occasionally offer a class on the nuances of coffee in your store.

     The ideas to build and sustain a customer base are numerous. Acting now will ensure that whenever McDonalds does roll out their national cafes, you will have already secured your niche in this competitive market.

New CFO Joins Medina Enterprise Executive Branch

Medina Enterprises, a Fort Walton Beach based holding company, announced today the newest addition to its executive management team with the hiring of Don Ochsenreiter as Executive Vice President and Chief Financial Officer. Ochsenreiter brings significant financial and operational leadership to Medina Enterprises. With Medina anticipating tremendous future growth, Ochsenreiter’s primary objectives are to establish optimal capital structure for the company to facilitate its imminent growth, and to help Medina achieve this growth building a solid financial foundation.

Before joining Medina, Ochsenreiter was President and CEO for Burton Golf, Inc. for the past 13 years. At Burton Golf, Ochsenreiter repositioned and grew the leading golf bag brand to the number one market share position in golf course shops worldwide. Before recently selling the company to a strategic buyer, he managed every aspect of the company through operational and industry change. Ochsenreiter holds a B.A. in economics from University of North Carolina at Chapel Hill and an M.B.A. from the McCombs School of Business at the University of Texas.

Problems in Franchising: Avoid these Costly Mistakes

It takes a lot of money to build a business, and you certainly don’t want to waste any. Check this list of 7 costly mistakes to avoid.                                

1. Letting emotions rule. Falling in love with a franchise concept is a common mistake. Don’t let your emotions guide your decisions. Use your head, do your due diligence and take the time to thoroughly investigate the franchisor’s offering.

2. No professional team. Don’t try to do your own financials, contract reviews, or negotiating. The cost of professional franchise attorneys, accountants, and advisors is money well spent.

3. Too little cash. Lack of capital is the number one reason franchisees fail. Item 7 in the UFOC will tell you how much money you’ll need with a low and high range. Be smart-go with the high range. Then ask current franchisees if the numbers are high enough.

4. Penny wise and pound foolish. Choosing one franchise over another because the initial franchisee fees are lower is shortsighted. It assumes that all franchises are alike and nothing could be further from the truth. Choose the franchise with the proven concept and strongest track record.

5. Too much help. Payroll is the biggest part of overhead for most franchise businesses. New franchisees often hire too many people or pay too much in wages. A good franchisor will provide a good staffing plan. Stick to the plan.

6. No comparison.  Never buy expensive equipment, supplies or inventory without shopping around first. Even if your franchisor offers group purchasing, do your own research, shop as many vendors as you can, consider aftermarket suppliers, and weigh different financing options (loans or leases).

7. Marketing blunders.  As a new business owner, you’re going to be targeted by every ad salesperson around. Ignore them. Follow your franchisor’s marketing plan to the letter to avoid wasting thousands.

Editor: The Problems of A Cuppy’s Coffee Newsletter

Company newsletters throughout the business world have a key element or theme about them. That theme or purpose of the newsletter is to motivate its employees to be more productive. At the Bean Street Journal, a Cuppy’s Coffee’s newsletter, as Editor I want to move beyond motivation. The purpose and main editorial thrust of this company wide publication is to educate and inform franchisees as well as the staff of Cuppy’s.

As a parent of a teenage daughter, I learned early in my homeschooling days that in order to sometimes inform or educate the best route is to entertain to get the point of the lesson across. This worked well with my daughter, but will it work with adult business people?

Therein lies the problem with a monthly newsletter. Will the information and content of the newsletter educate the readers? Will it also entertain and keep the reader flipping thru every page? As editor I hope this is the case, but as a writer and contributor the crux of any writing is will the readers enjoy it? Will my passion for fiction interfere with the nonfiction topics of business? This is always a concern.

Before the release of any newsletter, I enjoy receiving feedback from the staff of Cuppy’s. This pre-screening by a 100 pair of eyes, always catches the errors I may have made in producing the newsletter. For this I am thankful.

As for the reader I do hope that you enjoy the newsletter and are educated by the contents. Your feedback and suggestions are always welcome at the Bean Street Journal.

~Editor