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Multi-profit Centers

A cup o' joe and a carwash to go

October 11, 2010
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It makes sense that someone who is taking their car in for a wash on a Saturday might also like to enjoy a really good cup of coffee. People nowadays are attuning to one-stop shopping as they’re looking to save time, money, and energy. It isn’t exactly a stereotypical coffee shop atmosphere with beatniks, bards and baristas, but it’s still a chance for a customer to sit back, relax, sip some caffeinated goodness, all while their car is getting a good cleaning.

According to the International Coffee Organization, about 1.6 billion cups of coffee are consumed everyday all over the world. That number marks a bit of a slowdown in consumption levels due to a shaky economy, but still shows just how popular caffeine is in today’s world.

José D. Sette, head of operations for the International Coffee Organization said, “In general, the consensus in the coffee world is that the global economic crisis did not have a great effect on overall coffee consumption, although shifts in consumption patterns (e.g. from out-of-home to in-home) may have occurred.”

Franchises available
According to the website Coffee Franchise Review, there are numerous coffee franchises available. These businesses run the gamut in investment sizes, ranging from a mere $75,000 to open a Mocha Delites, up to $250,000 to open a Coffee Beanery. Even beyond that, interested operators would need somewhere around $375,000 to open a Dunn Bros. Coffee. Of course, this high-scale business proposition includes assistance, training and on-site support during the development process for a store that is between 1,600 and 2,000 square feet.

For investors looking to make due with the space they have, Dunkin’ Donuts offers the option to invest in a stand-a-lone store, kiosk, a store-within-a-store shop, a cart or even an in-line/end-line add-on building. These business models can be particularly appealing to operators who already have the land and building for an established carwash business and simply want to drive another dollar into the final ticket.

Want a coffee with that?
Jay Montpetit is an example of an operator who has choosen to use the space available. Montpetit owns the Downtowner Car Wash in St. Paul, MN, a full-service carwash and detail center, with an express lube, c-store, gas station and a Seattle’s Best Coffee Espresso Bar. The latter was added on in 2004. Montpetit said the idea was to offer as much of a “one-stop shop” as possible.

“We know it’s a big convenience for our customers,” Montpetit said. “I would like to tell you it was driven by foresight and market research, but, in our case, it was out of fear of not being able to pay the overhead. We knew multi-profit centers would help.”

Downtowner offers customers up to 25 different menu items, everything from flavored coffees to cappuccinos to lattes. They have one employee on hand at all times and sometimes two, during busier times. An employee comes into the coffee shop every day to get it ready and prep for the rest of the day. He said they don’t have employees crossover from the carwash to the coffee shop — they tried it, but it didn’t work due to the different natures of the businesses.

One lump or two?
Opening any kind of additional profit center that requires a completely new building isn’t always easy. Montpetit is very honest when warning others about the struggles involved with opening a coffee shop. It takes a lot of work, he warns, and the disadvantages may outweigh the advantages.

A few of the disadvantages, according to Montpetit:

  • A large upfront investment;
  • Hefty inventory factor;
  • Staffing and training issues; and
  • Introducing new regulations and city codes related to food prep.

However, it’s not all negative, and according to Montpetit, the business definitely brings in extra money if done right. “It’s not overly complicated, but there is a lot of work involved,” he clarified.

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