Emerging Chain Still Rock 'n' Roll to Coffee Lovers
As management prepares Rock 'n' Joe Coffee Lounge for expansion, the song won't remain the same inside the units.
By David Farkas, Senior Editor -- Chain Leader, 11/1/2009 12:00:00 AM
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| Rockn’ Joe Coffeehouse and Bistro is changing to Rock ‘n’ Joe Coffee Lounge with new graphics to make the units seem friendlier. |
After Rock 'n' Joe Coffee Lounge CEO and founder Kevin Brennan, acting as a consultant, added $63,000 to another coffeehouse's bottom line, he figured his own coffee concept wasn't a fluke. “I realized then that Rock 'n' Joe wasn't a one-trick pony,” he recalls.
Thus, in 2001, the idea for a franchise system was born. Four years later, Brennan closed on his first deal, for one store, in nearby Westfield, N.J. He has signed five more franchise agreements over the last two years.
“Kevin sold those franchises without any help and in a difficult economic climate,” marvels franchise consultant Richard Sharoff, former CEO of Atlanta-based MaggieMoo's, who has been retained to manage future franchise sales.
Brennan expects the rock 'n' roll-themed coffee chain, headquartered in Cranford, N.J., to add 10 franchised units, in New Jersey, Connecticut, Florida and New York in 2010.
To accomplish that, Brennan and Sharoff are preparing Rock 'n' Joe to attract multiunit franchisees. So far, six franchisees each operate one store. Brennan owns the original location in Cranford, N.J., a suburb of New York City.
Sales Up
Brennan claims systemwide sales are up 20 percent this year, due largely to a new sales program rolled out in July: Baristas now practice latte art and talk about bean varietals. About 25 percent of a unit's total revenue comes from food, including breakfast items, sandwiches and desserts. The recently streamlined menu has helped boost the check average to $6.80.
Brennan won't disclose weekly sales or average unit volumes, citing Rock 'n' Joe's Franchise Disclosure Document, which makes no earnings claim. The FDD says the initial investment runs from $241,000 to $373,000.
Restaurant consultant Frank Steed, a former franchise executive, says multiunit franchisees typically expect a 2-to-1 sales-to-investment ratio, or annual sales of $700,000-plus. “Everything you touch has gone up in price, squeezing margins,” he notes.
“We're moving in that direction,” Brennan says of the unit economics model. Getting there has required Brennan and Sharoff to refine the brand, making it more inviting to a wider range of customers. The first unit, a 700-square-foot space opened in 1993, was originally a full-service dessert-and-coffee concept. But informal research the two conducted early this year suggested they should create a more relaxed look.
Brand-New Branding
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The duo changed Rockn' Joe Coffeehouse and Bistro to Rock 'n' Joe Coffee Lounge. They commissioned new graphics to make the units seem friendlier. “We still need to please the upper-middle-class demographic where we were pulling from, but also bring in more blue-collar workers,” Brennan explains.
The latest Rock 'n' Joe, which includes all the elements of the redesign, opened in October in Bethlehem, Pa.
Service was sped up, too. Out went the full-service model in favor of a quick-service format; customers now place orders for coffee and food at the counter. To make things faster, Sharoff trimmed the menu, eliminating more than a dozen sandwiches and many ingredients. The new three-panel menu board features 21 sandwiches, including seven breakfast sandwiches.
One thing that didn't change: the music, a blend of classic and new rock. “People who come in remember the rock 'n' roll,” Brennan says. “It's a distinct identity.”
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