Brewing A Family Legacy – Coffee Beanery flavors its franchise business with lifelong devotion

To say the coffee-roasting process is exacting is a bit of an understatement. To bring out a coffee bean’s rich flavors, it must be handled carefully, watched constantly and never taken for granted.

That is similar to how JoAnne Shaw, President and CEO of The Coffee Beanery, sees her job as co-founder and matriarch for her Flushing-based family business. Although her days behind the counter are long over, she still believes in giving her time and effort to those around her to ensure their professional success.

“If you’re a company that cares, you have to try to bring out the best qualities in your franchisees, your employees and your family,” said Shaw, who with sons Kevin and Kurt supervises more than 100 locations throughout the United States and internationally.

Making coffee is something of a passion for the Shaw family -“ JoAnne and Julius Shaw are often credited with bringing the espresso-cafe concept to mainstream America. Since 1976, The Coffee Beanery franchise has grown to encompass more than just a simple cup of Joe.

Today, the café stores serve espresso, fresh-brewed coffee, tea and other specialty drinks, while also selling gourmet coffee beans, tea bags, baked goods, sandwiches, soups, fresh salads and a line of branded mugs and coffee machines. The Shaws even do fund-raising products, noting with pride that their coffee once saved a high-school football program from elimination.

Good deeds aside, the challenges to running a family-focused business are many. Besides working with close relatives, the Shaw family has to find like-minded franchise owners to ensure the quality remains the same at all of its locations. There have been issues with franchisees over the years, and the Shaws have worked diligently to try to resolve them where they could.

Then there are the challenges of building a local, national and international presence. The Coffee Beanery is big on movie and television placements, going into shows like “Shameless” and movies including “Million Dollar Baby” and “Erin Brockovich.” The family also believes in putting themselves where their customers are, including kiosks, malls, airports, hospitals, college campuses and downtowns.

In 1998, the company opened its first international location in Guam and now offers master franchises in China, Korea and the Middle East. And they are looking to grow just about everywhere, including Africa, Asia, Australia, New Zealand, Canada, Central America, Europe, Mexico and South America.

There also is the seemingly insurmountable effort a coffee chain has to make to be recognized in today’s caffeine-saturated marketplace. How does one standout in an industry where, as the old joke goes, there is a Starbucks in the bathroom of a Starbucks? Long story short, Shaw doesn’t sweat it. Because, she says, her coffee just tastes better, period.

As if that is not enough for one person’s plate, there is Shaw’s strong desire to serve as a mentor to other female entrepreneurs out there. Truth be told, Shaw only has a high-school diploma. Yet she had the smarts and the moxie to serve as the first female chairwoman of the 40-year-old International Franchise Association of 30,000 members. She also has plenty of business experience and dozens of classes behind her.

So when she talks to women’s groups, Shaw is quick to emphasize that the sheer determination to succeed can be enough to surpass even the greatest obstacles.

“People often mentally limit themselves and say, “I can’t do that.’ If you tell yourself you can’t do something, you won’t,” Shaw believes.

Shaw reigns benevolently at the company’s headquarters, a single-story 45,000 square-foot facility in an industrial park just outside of Flint that also serves as its warehousing and distribution center. The Coffee Beanery provides all of its franchisees with its specialty beans and products, allowing its coffee houses to serve unique flavors and blends. That includes its wildly popular hazelnut and its seasonal goodies, such as Pumpkin Spice and Caramel Pecan Pie.

More importantly for coffee lovers, the headquarters also houses The Coffee Beanery’s production facility where all of its hand-selected beans are roasted, flavored and packaged. Even those who might not drink the steamy beverage cannot deny the luxurious aroma of fresh-roasted coffee that permeates every inch of this place. The company produced 900,000 pounds last year, and it is on track to do 1.4 million this year.

How it began
So where did The Coffee Beanery get its start? One might argue that a seed was planted while JoAnne was in high school. She recalls how a guest speaker told the students that of everyone in the room, only a few would make something of themselves. And of those, perhaps one or two would truly hit the jackpot, so to speak. JoAnne, her wheels turning already, said she decided she would be among those elite.

The Coffee Beanery roasts, flavors and packages all of its products at its Flushing headquarters. These goods are then distributed to the company’s franchise coffeehouses. Photo by Rosh Sillars

“You can dream big and you’re going to have hard times. Nobody gets through life without those. But you just keep going. You’re going to get there,” she said.

She married her high-school sweetheart Julius a week after graduation, quickly had two children and started working at his parents’ catering and coffee-service company. They kept that family business moving forward for more than a dozen years when JoAnne decided it was high time that they got to work for themselves.

“It was the early 70’s, and I was delivering coffee to our current coffee-service customers and trying to sell new prospects on our coffee and service. I would hear ‘I like the smell of coffee but don’t like the taste.’ Good coffee, specialty coffee was not available anywhere,” Shaw recalls. “Restaurants sold commercial coffee, grocery stores carried low quality, low cost ‘loss leader’ coffee on their shelves. I told my husband Julius I would like to open a special store where people could experience wonderful coffee that actually tasted great. He said yes!”

For some reason, a coffee shop seemed like the best bet. Now, imagine you’re back in 1976. In Michigan. With two high-energy little boys. Would you really want to start a company with so many unknowns ahead of you? Well, JoAnne did. So she started making coffee drinks in her home, hoping to come across some sort of flavor that could make this sweet-smelling beverage appealing to even those who claimed to dislike its taste.

“Before we opened our first store I created in my kitchen what I’d call a foo-foo coffee drink, a hot spiced Viennese. I made it with fresh coffee, hot spices and real chocolate. Then I topped with whipped cream. And 99 percent of the time they’d say this is great or that it didn’t even taste like coffee,” Shaw laughs.

They found Fairlane Center, one of the Taubman malls, and started dreaming. And that Hot Spiced Viennese was the cornerstone of a future empire.

“We began the search for a location and percolating the idea of how the store would look and what its product offerings would be. After a great deal of searching for the right location, we found a location in Fairlane Mall in Dearborn,” Shaw said. “The developer had many clothing chains, shoe stores, jewelry stores and was looking for a different unique type of store to add to their 120-store mix. After signing a 10-year lease commitment, we looked for financing and began work on the store design. Nine months later our first baby store was born.”

High-school sweethearts, JoAnne and Julius Shaw bring a family-centered mentality to The Coffee Beanery. Both of their sons, Kurt and Keith, also work for the company. Denver Smith Photography

That came after at least one banker dismissed them, saying the $180,000 lease payments were beyond them -“ that they had “champagne tastes on a beer budget,” Shaw recalled. “So we found another bank. We didn’t give up.”

The couple worked like dogs and rarely took much money home. But they got that Dearborn site off the ground. And then they put up seven more, opening a total of eight stores in nine years. They built those stores on a wing and a prayer, Shaw said, because back then you could lease everything from water heaters to storefront signs.

A few years went by when the couple realized a big question still loomed: Who should be the CEO? Julius was more than happy for JoAnne to take the wheel, she said.

“When we started franchising in 1985, we realized that someone had to be the face of the company. We knew if we were female owned, we could get more visibility. And there was a possibility that we could obtain more SBA money. And, to be honest, he just didn’t want to do it,” JoAnne laughed.

So Shaw went from a wife and mother to CEO. Just like that.

“It was a big transition for me because I had no public speaking experience. I was pretty shy. I had gotten married a week out of high school and didn’t have a college education. It was a pretty daunting for me at the time,” JoAnne said.

“At the time, I didn’t envision where we were going. I said to myself, ‘You will be able to do this,’ and I did it. It wasn’t really something where I thought I have all this experience in the stores and I really know what I’m doing. I didn’t think about how big it would ever get, quite frankly. I just knew I had to do what I had to do,” Shaw said.

It helps that Julius contributes considerably to the company’s financial security, JoAnne notes. He’s the kind of guy where if you’re at an auto dealership, he can crank out the monthly payment before the salesman could do it on a calculator, she brags.

“I actually think working with your family is a good thing and a bad thing. My husband and I have separate roles. He’s always been good with numbers. I’m better with operations, seeing things the way they should be and also envisioning. I’m a great visionary. I can see in the future what we should look like. I can see the flaws and what we should do to fix those things,” she said.

Building the brand
Growing quickly was never their goal, JoAnne says. Rather, they wanted to make sure the basic company was strong before franchising, a concept that interested JoAnne from the start. And although they have had their ups and downs with franchisees over the years, the Shaws are largely positive on the experience of sharing their business with as many like-minded entrepreneurs as possible.

“Franchising was always a dream of mine. I had seen McDonalds and Wendy’s and thought that would be a wonderful way to grow the brand across the country,” Shaw said. “For the most part, it’s been really great. We’ve had franchisees be with us 20 years. They’ve retired and I miss them. We were this small group that was out there building the brand together.

“Today, it’s more difficult for franchisees because the economy has been more difficult. Rent prices have gone up and the price of food has gone up. We try our best to help them with great programs and unique products, but in the end they’ve got to do it. In the cases where it hasn’t worked, I believe it’s because they haven’t tried and used the tools there for their store,” Shaw continued.

“Sometimes, it’s been an absentee owner or someone not putting in the effort into the right areas; they need to get involved locally in their own communities; they need to be involved in the Chamber of Commerce. Just because you have a franchise you don’t expect people to come in and if you don’t smile behind the counter, your business isn’t going to work. We’ve got great tools and if they don’t use them there isn’t much we can do,” she noted.

And customers notice when you aren’t doing what they expect from a top-notch coffeehouse, Shaw notes.

“Consumers have the right to demand great customer service. I’ve actually sat in one of our stores up front and watched the body language behind the counter. I’ve pulled the franchisee out and told them to watch. It wasn’t good. The only way you’re going to correct that is constantly coaching in the store and training your people. A franchisee’s responsibility is to ensure that person wants to come back no matter what,” she said.

The core product
One of the things the Shaws are the most proud of is their coffee itself. Sure, you can serve the most delicious, flaky pastries and offer free Wi-Fi. But if your brew doesn’t meet the public’s standards, you won’t stay in this business for very long.

With about 40 workers at its headquarters, The Coffee Beanery prides itself on having a number of longtime staff members.

“I’m really not worried about other coffee companies; we really just focus on what we’re doing. They do their things well and have their customer base and I think frankly we do things much better but that’s my personal opinion. I don’t worry about them. I just focus on what we have to do to give customers what they want,” Shaw said.

“We have our own distinctive products. We import, roast, flavor and package all of own our coffees and we’re very good at that. Our coffees have what we call the ‘Right Roast.’ If you take a wonderful 100 percent Kona and you over-roast it you lose all the qualities,” Shaw added. “If you were to come to our store and buy hazelnut coffee you’re going to get coffee that not only smells like hazelnut, it tastes like hazelnut.”

Having those seasonal flavors in addition to its everyday offers is a labor of love. It takes about six months of development to bring a new flavor to the forefront. All of the work is done in-house, and employees get to vote on which flavors make the cut. Being the coffee supplier helps not only The Coffee Beanery because the company can do things quickly but it also helps its franchisees because then they have exclusives in their stores.

Another great thing about coffee is that it is not a luxury item; just about everyone can afford a steaming hot cuppa Joe, Shaw notes.

“For the most part, sales have been somewhat steady. -¦ I’ve been in the coffee business for more than 30 years. We’ve had a lot of economic ups and downs. Coffee is an agricultural product so it’s subject to hurricanes and all kinds of problems that can exist for an agricultural product. The pricing of the product can vary considerably,” Shaw said.

“That’s one nice thing about us being the roaster and the importer -“ we can weather some of the storms so our franchisees don’t have to,” Shaw said. “You just keep going. You have the tenacity and you just keep going. The only time you lose is when you quit. If you don’t quit, then sometimes you run out of time but like any football game it’s that last play that can either make it or break it.”

Franchise owners, like these at a convention in Atlanta, are the company’s life blood, JoAnne Shaw says. Denver Smith Photography

Going international was a mix of luck and trust, Shaw said. One thing that discourages Shaw is when things are beyond her control, so having franchises outside of the United States makes it more difficult to see what happens there.

But then there are strong relationships like the Shaws have with Warren Han, a longtime franchisee who has four stores in Guam. And the company has had good luck with operations in Dubai, a franchise operation that already has nine stores there.

“Coffee is a warm friendly beverage. If you can get the people in that country to drink that beverage, it will get them to relate to an American brand with a positive attitude,” Shaw said. “Maybe it’s a big dream but coffee can change the way people look at each other and bring a little warmth and understanding.”

Her stint as chairman of the International Franchise Association came in part because she wanted to learn more about the industry and to fulfill her desire to be a mentor. Her drive to help others comes in some ways from her faith, but it also has to do with how the Shaws want to operate as business people.

“The day they called me to move up to chairman, I was in Chicago at some conference. I remember I got down on my knees and prayed that I would do a good job. Because I wanted to represent all women and do a good job,” Shaw said.

She does think about retirement from time to time. But the feeling tends to fade when she thinks about the opportunities ahead of the family; Shaw wants to be there as the company expands into Lebanon and beyond.

“We have two grown sons and nine grandchildren. So I know, much to my sons’ chagrin, I’m not planning on going anywhere. I’m healthy, I’m young, I like what I’m doing and I don’t think I’ve accomplished everything I really want to, so you’re going to be stuck with me for a while,” Shaw said.

“I’m more excited today or at least as excited as when we first started. But I’m a lot more knowledgeable. But the excitement I have today is good because I still see great possibilities for what we can do,” Shaw added.