How BIGGBY® COFFEE Prioritized Love to Become One of Franchising’s Biggest Opportunities
The specialty coffee franchise co-founders and co-CEOs Bob Fish and Mike McFall spoke with 1851 Franchise to tell us about the past year, the state of the industry and more.
BIGGBY*® COFFEE, the Michigan-based specialty coffee shop franchise with over 280 units nationwide, has become a beloved institution for customers and franchisees alike since its founding just three decades ago. Over the past year, the BIGGBY® COFFEE brand has reached new heights as the COVID-19 pandemic brings new interest to the world of franchising and more savvy entrepreneurs recognize the brand’s unique approach and well-positioned business model in the specialty coffee segment.
And just what is that unique approach, exactly? Co-founders and co-CEOs Bob Fish and Mike McFall describe it as the franchise’s “commitment to genuine care” — a philosophy that guides every facet of the brand’s customer- and franchisee-facing operations. The BIGGBY® COFFEE leadership team prides itself on its dedication to providing franchisees and employees a unique opportunity to build lives that they love.
1851 Franchise spoke with Fish and McFall to learn more about how this love-centric approach to franchising has helped the BIGGBY® COFFEE brand continue to exceed expectations in 2021 and how it will position franchise owners for even greater success in 2022.
Big News From Last Year
Today, BIGGBY® COFFEE includes 281 open locations, as well as 152 in development, Fish says. Seventy-three of those deals were signed in 2021 alone. Despite another year of economic uncertainty due to the COVID-19 pandemic, Fish says the brand used its ability to connect with franchisees and customers alike to continue to expand its footprint and spread its love to more communities than ever over the past year.
“Franchising works very well in moments of difficulty,” said Fish. “Having an ecosystem of people that are like-minded, all moving in the same direction, problem-solving, working on culture and performance, serving the customer, investing in the community — it is very powerful. Now, with the pandemic and the Great Recession, the power of franchising has never been more important, and our franchise development numbers are reflecting that.”
In addition to franchise growth, McFall says business is booming — the brand’s store sales grew 28.7% year-over-year in 2021. This includes a 20% increase in same-store sales, as well as an 8% increase in new store sales. McFall points to the continued collaboration between the franchisor team and the franchisees as a primary reason the brand has continued to see growing sales despite the challenges of the past year.
“We rely on and depend on the diverse perspectives of our franchise community,” said McFall. “For example, a few years ago, we had a franchise owner who hatched an idea to build modular, drive-thru-only stores. He had become a franchisee in order to get our attention to show us this idea. This year, we began deploying these store models very aggressively. We now have 21 that are operating and 33 that are being built. That is not only one of the big moments from last year, but also an unbelievable example of how entrepreneurship thrives in the franchise model.”
Why the Coffee Segment Is Poised for Growth
When BIGGBY® COFFEE started in 1995, Fish says about 70% of the U.S. population drank coffee and only about 5% drank specialty coffee. Now, 70% of the population still drinks coffee, Fish says, but the number of people drinking specialty coffee has grown to nearly 25%.
“Regardless of what market penetration we see, the specialty coffee industry just isn’t going anywhere,” said Fish. “For as much as it has grown, it is certainly not done. We open up coffee shops in small, don’t-blink-and-you’ll-miss-them, one-stoplight kind of towns. Some only have 2,000 people in total. But the reception we get in those small towns is unbelievable. We are heroes — they are so happy that specialty coffee finally came to them. That is why there is so much room to expand.”
Additionally, Fish says specialty coffee and franchising go hand-in-hand. “We are really in two industries — franchising and specialty coffee — and those two fit together well,” he said. “In comparison to other retail concepts, for example, a coffee shop really thrives if it is owned locally. Franchising allows you to have that local ownership, while also benefiting from the proven systems and procedures in place.”
And McFall says the growing consumer demand for specialty coffee is only going to continue its upward trajectory as the younger generation gets older and the COVID-19 pandemic changes the way people live.
“Millennials have never existed without specialty coffee — they’ve been raised on it, and it is a way of life,” McFall said. “Now, as we move forward into a post-COVID world with work-from-home, people both young and old want to pop out and be a part of the world for a half-hour every day. Where else are you going to go other than the local coffee shop? That is a trend that is coming at us very aggressively right now — the massive change in the workplace structure is set to really fuel this concept.”
Why Franchisees are Getting On Board with BIGGBY® COFFEE
As the specialty coffee segment grows, McFall says BIGGBY® COFFEE stands out as a top choice for prospective franchisees for several reasons. But more than anything, McFall says, it’s the brand’s culture and purpose that drives people to BIGGBY® COFFEE.
“It is a very powerful part of our ecosystem — our purpose is to support franchisees in building a life that they love,” said McFall. “That is the franchise business model in a nutshell. We are here to build a beautiful business that will in turn allow franchisees to build a life that they love. When people understand how powerful that is in our world, they are really drawn to that.”
When it comes to the logistics of the BIGGBY® COFFEE business model, Fish says they have everything in place: a strong concept, great coffee, innovative beverages, profitability. While those are all important, Fish agrees with McFall that it is the “soft side” that truly compels franchisees to invest. Now, looking to a post-COVID world, Fish says they are confident this compassionate business approach will serve them well.
“We’ve been on this pathway for a long time, and it feels like the COVID-19 pandemic emphasized why it is so important for people to build a life they love,” said Fish.
The Investment
The initial investment to franchise with BIGGBY® COFFEE ranges from $202,450 to $418,700, including a $20,000 initial franchise fee. In 2020, store-level sales ranged from $184,490 to $1,608,964. The median store sales was $636,016, and 15 BIGGBY® COFFEE locations recorded sales of more than $1,000,000.
While measuring the operation through metrics and data analysis is one thing, Fish says the entire BIGGBY® COFFEE franchise operation has been fine-tuned to incorporate love and care at every level — something most brands don’t do. As part of the BIGGBY® COFFEE investment, franchisees are given everything they need not only to become successful business owners but also to have the freedom and flexibility to achieve their ideal lifestyle.
“One of the personal goals for both Michael and I is to have the word love be as ubiquitous as the word profit in the business world,” said Fish. “We are really trying to take a balanced approach to a business model that can both generate wealth and also enrich franchisees’ lives.”
Why The Leadership Team is More Excited Than Ever
Looking ahead, Fish says the brand’s primary goal moving forward is to ensure everyone in the “BIGGBY Nation” — baristas, team members, customers — would rate the brand a 9-out-of-10 in its efforts to support them in building a life they love.
“We believe that goal is the most important,” said Fish. “We are focused on that social metric, and it really influences our decision-making, which is resulting in a lot of exciting efforts to cultivate a more loving environment.”
For one, McFall points to the brand’s ongoing One Bigg Island in Space initiative to source coffee directly from sustainable farmers around the world. The BIGGBY® COFFEE franchise plans to serve 50% farmer-direct coffee by 2023 and 100% farmer-direct coffee in the following years.
Overall, McFall and Fish agree that everything about the future of the BIGGBY® COFFEE brand is exciting.
“Whether it be our farm-direct initiative, our continued product development or our franchise growth — there is so much in every department that is exciting to me,” said McFall. “We want to demonstrate to the world that you can be a supportive, nurturing environment for people and also grow an extraordinarily large, successful business. If we can help people build a life they love while also operating as a billion-dollar company and national brand, people will pay attention. Then hopefully other major brands will follow our lead, and we’ll be able to change both the franchising industry and the world at large.”
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