Scooter's Coffee: Riding the Strong Trend in Coffee Concepts
Scooter’s Coffee occupies a prosperous intersection of the franchising business these days. They are riding the strong trend in coffee concepts with a preference for going to market with multi-unit franchise partners who may own multiple brands. The results have been explosive, with a robust number of store openings, record annual unit volume and same-store sales growth that is far outpacing the QSR industry average. Plans to field Scooter’s Coffee brand in consumer packaged goods this year are expected to add to the momentum.
Coffee franchises are hot. More than 80 percent of Americans drink coffee daily, providing a huge pool of existing and potential customers for Scooter’s Coffee and its competitors. U.S. coffeehouse sales are expected to reach $28.7 billion by 2021 despite increased competition from ready-to-drink coffee, according to Mintel, a leading research house. That would be up from sales of $23.4 billion in 2017 — which in turn represented a 41 percent increase from sales in 2011.
What’s more, drive through coffee kiosks — a major point of emphasis for Scooter’s Coffee — are an especially popular type of outlet for increasingly time-strapped consumers. And kiosks have the benefit of being easier and much less expensive to locate and build than full-service coffeehouses.
Scooter’s Coffee adds its own franchising distinctives to the overall promise of coffee. Based in Omaha and operating 215 stores in 14 states now, the brand plans to open an additional 65 stores in 2019 and is structuring and resourcing the company to grow to 1,000 stores by the end of 2023. Scooter’s emphasizes customer satisfaction with a loyalty application that already has surpassed 37,000 users and accounts for about 10 percent of transactions. It focuses on franchisee satisfaction with a strong system that provides a structured training course, strict product-quality controls, top-level marketing and communications, an embracing system-wide culture and ongoing operational support.
Scooter’s management, led by CEO Todd Graeve, also has accelerated growth by emphasizing franchise partnership with entrepreneurs who want to own multiple Scooter’s Coffee stores as well as those who already have been successful with other brands that are complementary to Scooter’s. Multi-unit operators are taking over the franchise business from the old model of single-unit owners who are content to “buy a job” and be their own bosses. Today, more than half of all franchise units in the United States are run by multi-unit operators.
Multi-brand franchisees also are a rising trend. Often, they have expanded their number of stores to the maximum for their territory and want to take on a second or third brand to continue to grow their enterprise. Other motives include seeking additional brands to provide cash flow for different dayparts or to hedge against changes in markets, consumer tastes and economic shifts.
All of those considerations played in the minds of Carissa and Brent Votroubek a couple of years ago as they pondered strategies for expanding from multi-unit operators of Jimmy John’s franchises to multi-brand franchisees. The couple in Cedar Rapids, Iowa, were already part of a family enterprise that owned a handful of outlets for the Champagne, Illinois-based sandwich brand. Brent Votroubek also worked in commercial and residential real estate development; and his wife, Carissa Votroubek, was a telecommunications equipment leasing consultant.
“Scooter’s Coffee had just opened up in Cedar Rapids, and like a typical female, I said that owning a coffee shop would be kind of cool,” Carissa Votroubek recalls. “Right away we liked the fact that Scooter’s already was in our market, so the brand was already here.”
After researching not only Scooter’s but also a number of other national coffee chains, including Caribou, Dunn Bros. and Dunkin’, Scooter’s Coffee looked especially good to the Votroubeks. They were seeking a partnership with a brand that was relatively new and on the rise, and that emphasized the human touch, personal relationships with franchisees and the passion for shared success.
“When we went to their ‘discovery day,’ we really felt like everyone there cared about us,” Votroubek recalls. “They seemed passionate about the business itself.”
Carissa, who is 32, and Brent, who is 34, embraced other aspects of the Scooter’s Coffee proposition and personality. She liked the brand’s emphasis on the sustainability aspects of coffee harvesting and “the fact that Scooter’s has a very philanthropic side,” Carissa says.
Already involved with their extended family in a Jimmy John’s enterprise that had grown to five local outlets, the Votroubeks committed to a four-store territory in Cedar Rapids with Scooter’s Coffee. Their positivity about Scooter’s was reaffirmed during the ramp-up process, Votroubek says. Brand management kept its promises and demonstrated a flexibility that helped the couple complete construction and trim costs on the first two Scooter’s Coffee outlets.
Now, the Votroubeks are looking forward to opening the other two Scooter’s Coffee locations in Cedar Rapids and to succeeding and growing along with the brand.
“There’s that small-business feel that we so appreciate,” Votroubek says. “And more important than that, we think that’s something Scooter’s Coffee will continue to focus on as they grow. That’s a piece we don’t want to lose.”