Michael McFall and Bob Fish have a simple goal: They want Biggby Coffee to be the dominant gourmet coffee retailer in Michigan. Period.
One might look at that objective and think it is too modest. Too narrow. Too short sighted. McFall and Fish take umbrage with that opinion. For them, dominating the state is the first step toward greatness a greatness that brings local communities, their franchisees and their value-based company culture with them along the road to commercial success.
In other words, Biggby’s next steps toward expansion go something like this: First, Michigan. Next, the world. Or, at least, a few more neighboring states where people appreciate quality coffee, an emphasis on friendly customer service and a belief that a company should do the right thing not because it’s convenient but because it is right.
Simple, right? That’s the point. McFall and Fish are moving forward in a straight trajectory, and they’re taking small, measured steps to grow their East Lansing-based gourmet coffee chain and its franchisees toward a bright future. Granted, they’re already in nine states, so they have a toe into the pool; the challenge is when to go nationwide or even further.
We are highly focused on developing Michigan right now. If you inquire to become a franchisee outside our key nine states, we just send a polite response saying we’re not franchising in your area at this time, said McFall, the company’s president. That’s about making sure we don’t spread our resources too thin. Our idea is to develop the brand and become the dominate gourmet coffee brand in Michigan. From that point, we will start to put a strategy in place to go develop other marketplaces and aggressively so. We don’t go a whole heck of a lot beyond that.
So don’t compare them to Starbucks, Dunkin Donuts or anyone else. To do so is to be met with a sympathetic smile. You either get Biggby Coffee or you don’t. The company doesn’t want to be everything to everyone. They want to be a welcoming place where great coffee is served. And that is what will allow the business to grow, just as it should.
I’ll get asked the question on a regular basis what is our International growth strategy? Toledo is international to us! We’re not worried about Europe or the Middle East. What we worry about on a daily basis is becoming the strongest coffee retailers in Michigan and that’s a pretty big goal, McFall continued. If we can become the dominant coffee retailer in Michigan, that’s a big deal. And we’re proud of that. From there, we’ll decide where we’re going. We don’t have these massive, grandiose plans. Of course our objective is to grow and become a substantial company. The definition of that? That’s a little big nebulous right now.
The full cup
Well, to be honest, they have a larger plan. They do want to develop Biggby into a great coffee company. But to really understand McFall and Fish, you need to dive deeper into what makes them tick. And it is as easy to understand as Biggby’s core values: B happy, have fun, make friends, love people and drink great coffee. But more on that later.
Here’s the facts: McFall and Fish have been working diligently since 1996 (the year after the company was founded) to develop a franchise system that rewards both the management team and its franchise owners. Biggby is currently unleashed in Michigan, Ohio, South Carolina, Wisconsin, Illinois, Indiana, Texas, Florida and Kentucky. There are about 200 stores open or under contract, and the company has an objective of having another 100 open by 2015.
The 2013 goal of having 48 new stores under their belts came to pass in mid-December. Both McFall and Fish carried a look of pride from that final signature, which seemingly could cause stress internally if they had failed to meet their goal. But they did. They will have another 60 into 2014, Fish said. And they will move rapidly, aggressively and decisively into Metro Detroit in the months to come. So if there isn’t a Biggby franchise in your hometown yet, just wait. You’ll be seeing their bright orange B glowing early in the morning and late into the evening soon enough. Profits are growing as well it has been reported that its systemwide sales were about $59 million in 2012, and its revenue is expected to reach $68 million in 2013.
We started in an unlikely way in Lansing. From that small nucleus, we grew out about an hour. We went to Kalamazoo, then Toledo. We skipped over Detroit, Fish said. From our perspective, we skipped it because it is a giant. We have about 40 locations in the Metro Detroit area, but we should have 3 to 4 times that number of stores in that marketplace. But we are well on our way. This year, we said they’d sell 48 units. Next year will be 60. You’ll see the presence in Metro Detroit go up significantly in these next few years.
So there is good reason to be optimistic. Pure numbers tell part of the story. According to the Coffee Statistics Report 2011 Edition, coffee shops make up the fastest growing part of the restaurant business. Americans consume an estimated 400 million cups of coffee per day or 146 billion cups of coffee per year, making the United States the leading consumer of coffee in the world. Moreoever, coffee represents 75 percent of all the caffeine consumed in the nation. And Specialty coffee that’s the kind Biggby Coffee makes is said to account for about 30 percent of the country’s $40 billion coffee industry.
The coffee houses feature more than 30 specialty coffee, tea and frozen drinks. Each day, brew masters prepare six special coffees and the stores carry a broad selection of pastries, fruit and sandwiches ready for customers. All beans are 100 percent Arabic and vigilantly roasted at Paramount Coffee in Lansing.
People visit coffee shops with a high degree of frequency. But there’s no other (retailer or restaurant) that you go to with that frequency. The inherent thing that happens that’s beneficial to our company is that we get to know our customers, Fish said. We know their names. We know if they’re going to soccer practice. We know if they’re having a bad day. So we’re embedded in that particular community. We always said that ROI means to us âReturn on involvement.’ We want to have that involvement in the community. That community is supporting that coffee shop; our coffee shop is supporting that community.
This confidence in their concept, in their franchise structure, in their brand wasn’t easy to come by. It is something that grew over the past 18 years, McFall and Fish said, and it really became cemented over the past decade. Between its name change, its commitment to the franchise concept and their own belief in their core values, Biggby has hit a stride, the business partners said.
What we’re trying to do is position ourselves as true gourmet coffee for everyman, for everybody. When they compare us to other concepts, that consumer feels comfortable coming into our stores, McFall said. You don’t take a company and force a culture. For a number of years, we were more traditional, a gourmet coffee with an Italian style. Over time, we realized that wasn’t us. It was very incremental. It took about 10 years. It was always our culture, and it was always how we treated our people. There was no one moment. It was just a slow progression.
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| Michael McFall and Bob Fish sealed their partnership with a walk, a handshake and $3,000. They took a single idea of creating great gourmet coffee into the fastest growing coffee shop in the Midwest. Photo by Rosh Sillars |
It hasn’t always been easy. In 2007, Biggby Coffee took on the huge work of changing its name. What started in 1995 as a partnership between Fish and Mary Roszel (who has since retired) under the name Beaner’s made the independent decision to go with Biggby instead. The original name, which many loved, had a derogatory connotation in some circles, and the coffee chain wanted to separate itself from that demeaning word not because they had to, but because the company felt it was more in line with where they were going in the future.
It was really expensive; we had real money wrapped up in that transition, said McFall. But it was absolutely the right thing to do. And we haven’t second guessed it for a second. If our culture is our culture, having a name that was derogatory toward anyone let alone a very significant percentage of the population it didn’t match up with who we were so we changed it. It wasn’t a difficult decision to make; it was a difficult transition to plan and execute and get done. But it felt very natural. The lesson was: Don’t block your values; let your values come through even if that means a very dramatic change like a name change. When you block your cultural values, that’s when things get misaligned.
Added Fish: Nobody asked us to change our name. Nobody was protesting. (But) this partnership is built on strong personal values that manifest themselves through the company. We’re still two people who have to get up and look at ourselves in the mirror. Once we understood that the name was derogatory, it always was just the right thing to do.
With an average store size ranging from 1,200 to 1,600 square feet, a Biggby Coffee store can be anywhere that the demographics support from a new strip mall in a suburban location, to a historic building downtown, to a rural area plus everything in between, the company states. Many stores also have a drive-thru to add another layer to their business.
Being comfortable with their casual style some might say they’re the unpretentious coffee retailer is another way that Biggby is differentiating itself and establishing the momentum the company will need as it grows, the duo agreed. Just because it is gourmet, quality coffee doesn’t mean that the stores should be intimidating. Rather, they believe Biggby’s unique style, strong social-media messages and customer loyalty are borne out of the personalities of both the owners, support staff and franchise families that have made Biggby their brand of choice.
Translation: If you feel uncomfortable at Starbucks, you’re probably going to feel pretty fine at Biggby. And if you feel comfortable at Starbucks, you’re still going to feel like Biggby is your coffeehouse. It is all about the quality coffee, Fish said.
Looking within to build loyalty
The key to customer loyalty is first understanding who you are. I can write a description of a Harley Davison person; you know who is loyal to Harley Davison. I can tell you about a person who is loyal to Jeep. I think those brands are successful because they know who they are, Fish said. Initially, we wanted to create an environment that was fun and unintimidating. Then, that translated to our cultural values.
So how is having fun and being friendly part of a company culture? Fish smiles. It just is. Trying to define it is unnecessary.
You have to understand where that comes from; it manifested throughout our system. So our No.1 selling drink is called Caramel Marvel; Caramel Marvel sounds like a superhero. It’s not that affected version of a caramel macchiato or whatever Italianized version of drink might be, Fish said. We have a drink named Teddy Bear. Who names a drink Teddy Bear? It’s very personal it’s very unintimidating and it’s a lot of fun.
For Fish, being an everyday Joe is essential not only to the company’s success but to his own personal brand, which is such an important part of the Biggby story. His blog is a huge part of the Biggby Web presence. His personal presence is regularly found at the company’s franchises throughout the year. And while he believes the company has a strong support staff, he and McFall are available to any franchise owner or employee as needed. Although the chain is growing, that personal touch remains, Fish said.
It’s important to be able to identify with that person. If your culture is just going to rest on a logo, what does that mean? Not much. Great chains do this well, like Wendy’s with Dave Thomas, Ray Crock at McDonalds or Tom Monaghan with Domino’s Pizza. We thought it was essential to identify a personality with the business, Fish said.
And it doesn’t hurt that a lot of Biggby Coffee employees love to write. And blog. And post pictures on Facebook. And Tweet.
When you understand who you are, it’s not hard to talk about it. It gets complicated when you’re making up who you are. There’s a vulnerability in social media; if you’re not honest, people call you out on it. Or they’ll just tune you out, Fish said. We find that social media takes on a life of its own. We don’t ask people to post their opinions or photos; they’re completely unsolicited. And I think that’s remarkable! What people are tying into is the integrity and the honesty of what we’re presenting. It’s what we are. There’s another thing that happens that’s just beyond me is people contribute photos thousands of photos of themselves with Biggby around the world. When I pack for vacation, I can barely find all of the clothes I need for that vacation. But they’re taking our mug. I just can’t imagine anyone not wanting that kind of loyalty.
Fish is like a father in some ways; it is clear how proud he is of how the franchisees feel about Biggby Coffee. Recently, Franchise Business Review magazine asked franchisees to rank companies for its 2013 Franchisee Satisfaction Awards. There, Biggby made two charts: Top 20 Franchise in the category of Food and Beverage and as a Top 50 Franchise in Franchisee Satisfaction. No one paid for these votes; the franchisees took it upon themselves to vote the company into these positions, Fish noted.
Being a neighborhood coffee shop is another key to Biggby’s personality.
We have gone so far at moments to have conversations about discontinuing disclosing how many stores we have. Because how many stores we have in aggregate is irrelevant. What we want to do is build a coffee shop in your neighborhood and make that coffee shop the best in your neighborhood, McFall said. We actually tried it for a while, and it was almost impossible. Because the first question people want to ask is, âHow big are you? How many stores do you have?’ We’re very focused on taking a local operator who owns our brand in that marketplace. They are Biggby Coffee in that marketplace. We’re sort of irrelevant. If they can become the owner of the local gourmet coffee shop in their neighborhood that happens to be Biggby, that’s fantastic.
 |
| Every new franchise that signs with Biggby is added to a wall of fame of sorts at the company headquarters in East Lansing. Biggby formerly was known as Beaner’s Coffee. Photo by Rosh Sillars |
Giving its franchisees a strong system a foundation on which they can grow and prosper is a process that has taken years to refine. In April 2013, the company went so far as to reduce the initial franchise fee for new store owners from $30,000 to $15,000. The goal? To give five new franchisees a 50 percent reduction to help increase owners return on investment.
That’s the beauty of this franchising model. An individual who lives in their community can open a coffee shop on the backbone basically of a business model and business system that allows them be successful. They’re local to the marketplace. Their money stays in that marketplace. But the risk level in terms of owning a coffee shop goes down because they’re using this franchise business model, Fish said.
Biggby Coffee itself doesn’t own a single store, McFall added, although it did have nine at one point. And that is done very intentionally.
What we realized was that being fractured in our approach we weren’t doing either one of them as well as we wanted to. So we made a decision in 2006 that to sell all of the company owned stores and then become the very best franchise company we could, McFall said. To say that we had a whole bunch of forethought would be a lie. It was a Methodology to expand. But in reality, it’s made us significantly better at operating the company because we’re accountable to people every day for what we do. It’s a dynamic environment, for sure.
We got great advice from somebody five years ago who is a successful franchisor of another concept who said, âYour job is to be the custodian of the owner/operators capital. If you don’t take care of their capitol, you don’t have a future,’ McFall added. Five years ago, we really brought that into our world and we feel like we are custodians of their investment. We have to assist them in their return on that. I don’t want to say that’s (money) all that matters, but it is a big amount of what matters to them.
Giving their franchisees that loyalty and showing their customers how much they care has come back to Fish and McFall a hundred times over, they noted. They are amazed when customers take their Biggby Coffee cups on vacation and snap photos with them around the world. They are amazed when couples carry Biggby Coffee on their wedding days. And they are amazed when these photos make their way back to Biggby via its website or social media. Becoming a part of a person’s every-day life is a symbol of success in many ways.
You don’t get loyalty any other way than doing a great job. People become loyal to you because you do a great job for them, McFall said. If you try to put the loyalty thing in front, you’ll never get that. … The great brands that have incredible loyalty don’t try to be all things to all people. They are who they are and certain people are really loyal to that. When you try to spread it out and try to be all things to all people it gets watered down. We know who we are and what we are trying to do. And we execute it, I hope, well.
So when you see Biggby Coffee a decade from now, McFall and Fish hope you see a larger, equally successful company that is still having fun. And drinking great coffee all along the way.
We believe in 10 years, it will all make sense how we did it and why we did it, McFall said. Could we be signing contracts all over the country right now? Probably. But it would be outside of our approach and strategy. If we become the dominant gourmet coffee retailer in Michigan in the next five or 10 years, that’s pretty cool.
Fish agreed. We’ve always been very purposeful in what we’re doing. We’re not saying we haven’t made an error or a mistake. But the asset is we tend to learn form those and move forward. … We’re staying right here and focusing on what needs to be focused on today.
Overcoming challenges
It hasn’t always been easy. In 2007, Biggby Coffee took on the huge work of changing its name. What started in 1995 as a partnership between Fish and Mary Roszel (who has since retired) under the name Beaner’s made the independent decision to go with Biggby instead. The original name, which many loved, had a derogatory connotation in some circles, and the coffee chain wanted to separate itself from that demeaning word not because they had to, but because the company felt it was more in line with where they were going in the future.
It was really expensive; we had real money wrapped up in that transition, said McFall. But it was absolutely the right thing to do. And we haven’t second guessed it for a second. If our culture is our culture, having a name that was derogatory toward anyone let alone a very significant percentage of the population it didn’t match up with who we were so we changed it. It wasn’t a difficult decision to make; it was a difficult transition to plan and execute and get done. But it felt very natural. The lesson was: Don’t block your values; let your values come through even if that means a very dramatic change like a name change. When you block your cultural values, that’s when things get misaligned.
 |
| Biggby coffee houses feature more than 30 specialty coffee, tea and frozen drinks. Each day, brew masters prepare six special coffees and the stores carry a broad selection of pastries, fruit and sandwiches. |
Added Fish: Nobody asked us to change our name. Nobody was protesting. (But) this partnership is built on strong personal values that manifest themselves through the company. We’re still two people who have to get up and look at ourselves in the mirror. Once we understood that the name was derogatory, it always was just the right thing to do.
With an average store size ranging from 1,200 to 1,600 square feet, a Biggby Coffee store can be anywhere that the demographics support from a new strip mall in a suburban location, to a historic building downtown, to a rural area plus everything in between, the company states. Many stores also have a drive-thru to add another layer to their business.
Being comfortable with their casual style some might say they’re the unpretentious coffee retailer is another way that Biggby is differentiating itself and establishing the momentum the company will need as it grows, the duo agreed. Just because it is gourmet, quality coffee doesn’t mean that the stores should be intimidating. Rather, they believe Biggby’s unique style, strong social-media messages and customer loyalty are borne out of the personalities of both the owners, support staff and franchise families that have made Biggby their brand of choice.
Translation: If you feel uncomfortable at Starbucks, you’re probably going to feel pretty fine at Biggby. And if you feel comfortable at Starbucks, you’re still going to feel like Biggby is your coffeehouse. It is all about the quality coffee, Fish said.
Looking within to build loyalty
The key to customer loyalty is first understanding who you are. I can write a description of a Harley Davison person; you know who is loyal to Harley Davison. I can tell you about a person who is loyal to Jeep. I think those brands are successful because they know who they are, Fish said. Initially, we wanted to create an environment that was fun and unintimidating. Then, that translated to our cultural values.
So how is having fun and being friendly part of a company culture? Fish smiles. It just is. Trying to define it is unnecessary.
You have to understand where that comes from; it manifested throughout our system. So our No.1 selling drink is called Caramel Marvel; Caramel Marvel sounds like a superhero. It’s not that affected version of a caramel macchiato or whatever Italianized version of drink might be, Fish said. We have a drink named Teddy Bear. Who names a drink Teddy Bear? It’s very personal it’s very unintimidating and it’s a lot of fun.
For Fish, being an everyday Joe is essential not only to the company’s success but to his own personal brand, which is such an important part of the Biggby story. His blog is a huge part of the Biggby Web presence. His personal presence is regularly found at the company’s franchises throughout the year. And while he believes the company has a strong support staff, he and McFall are available to any franchise owner or employee as needed. Although the chain is growing, that personal touch remains, Fish said.
It’s important to be able to identify with that person. If your culture is just going to rest on a logo, what does that mean? Not much. Great chains do this well, like Wendy’s with Dave Thomas, Ray Crock at McDonalds or Tom Monaghan with Domino’s Pizza. We thought it was essential to identify a personality with the business, Fish said.
And it doesn’t hurt that a lot of Biggby Coffee employees love to write. And blog. And post pictures on Facebook. And Tweet.
When you understand who you are, it’s not hard to talk about it. It gets complicated when you’re making up who you are. There’s a vulnerability in social media; if you’re not honest, people call you out on it. Or they’ll just tune you out, Fish said. We find that social media takes on a life of its own. We don’t ask people to post their opinions or photos; they’re completely unsolicited. And I think that’s remarkable! What people are tying into is the integrity and the honesty of what we’re presenting. It’s what we are. There’s another thing that happens that’s just beyond me is people contribute photos thousands of photos of themselves with Biggby around the world. When I pack for vacation, I can barely find all of the clothes I need for that vacation. But they’re taking our mug. I just can’t imagine anyone not wanting that kind of loyalty.
Fish is like a father in some ways; it is clear how proud he is of how the franchisees feel about Biggby Coffee. Recently, Franchise Business Review magazine asked franchisees to rank companies for its 2013 Franchisee Satisfaction Awards. There, Biggby made two charts: Top 20 Franchise in the category of Food and Beverage and as a Top 50 Franchise in Franchisee Satisfaction. No one paid for these votes; the franchisees took it upon themselves to vote the company into these positions, Fish noted.
Being a neighborhood coffee shop is another key to Biggby’s personality.
We have gone so far at moments to have conversations about discontinuing disclosing how many stores we have. Because how many stores we have in aggregate is irrelevant. What we want to do is build a coffee shop in your neighborhood and make that coffee shop the best in your neighborhood, McFall said. We actually tried it for a while, and it was almost impossible. Because the first question people want to ask is, âHow big are you? How many stores do you have?’ We’re very focused on taking a local operator who owns our brand in that marketplace. They are Biggby Coffee in that marketplace. We’re sort of irrelevant. If they can become the owner of the local gourmet coffee shop in their neighborhood that happens to be Biggby, that’s fantastic.
 |
| Bob Fish and Michael McFall have their sights on bringing 60 new franchise partners into Biggby Coffee in 2014. They successfully signed 48 franchises in 2013, meeting their goal. Photo by Rosh Sillars |
Giving its franchisees a strong system a foundation on which they can grow and prosper is a process that has taken years to refine. In April 2013, the company went so far as to reduce the initial franchise fee for new store owners from $30,000 to $15,000. The goal? To give five new franchisees a 50 percent reduction to help increase owners return on investment.
That’s the beauty of this franchising model. An individual who lives in their community can open a coffee shop on the backbone basically of a business model and business system that allows them be successful. They’re local to the marketplace. Their money stays in that marketplace. But the risk level in terms of owning a coffee shop goes down because they’re using this franchise business model, Fish said.
Biggby Coffee itself doesn’t own a single store, McFall added, although it did have nine at one point. And that is done very intentionally.
What we realized was that being fractured in our approach we weren’t doing either one of them as well as we wanted to. So we made a decision in 2006 that to sell all of the company owned stores and then become the very best franchise company we could, McFall said. To say that we had a whole bunch of forethought would be a lie. It was a Methodology to expand. But in reality, it’s made us significantly better at operating the company because we’re accountable to people every day for what we do. It’s a dynamic environment, for sure.
We got great advice from somebody five years ago who is a successful franchisor of another concept who said, âYour job is to be the custodian of the owner/operators capital. If you don’t take care of their capitol, you don’t have a future,’ McFall added. Five years ago, we really brought that into our world and we feel like we are custodians of their investment. We have to assist them in their return on that. I don’t want to say that’s (money) all that matters, but it is a big amount of what matters to them.
Giving their franchisees that loyalty and showing their customers how much they care has come back to Fish and McFall a hundred times over, they noted. They are amazed when customers take their Biggby Coffee cups on vacation and snap photos with them around the world. They are amazed when couples carry Biggby Coffee on their wedding days. And they are amazed when these photos make their way back to Biggby via its website or social media. Becoming a part of a person’s every-day life is a symbol of success in many ways.
You don’t get loyalty any other way than doing a great job. People become loyal to you because you do a great job for them, McFall said. If you try to put the loyalty thing in front, you’ll never get that. … The great brands that have incredible loyalty don’t try to be all things to all people. They are who they are and certain people are really loyal to that. When you try to spread it out and try to be all things to all people it gets watered down. We know who we are and what we are trying to do. And we execute it, I hope, well.
So when you see Biggby Coffee a decade from now, McFall and Fish hope you see a larger, equally successful company that is still having fun. And drinking great coffee all along the way.
We believe in 10 years, it will all make sense how we did it and why we did it, McFall said. Could we be signing contracts all over the country right now? Probably. But it would be outside of our approach and strategy. If we become the dominant gourmet coffee retailer in Michigan in the next five or 10 years, that’s pretty cool.
Fish agreed. We’ve always been very purposeful in what we’re doing. We’re not saying we haven’t made an error or a mistake. But the asset is we tend to learn form those and move forward. … We’re staying right here and focusing on what needs to be focused on today.
