For the first time in nearly 30 years of history, Caribou Coffee will be franchised in the United States, a historic benchmark resulting from three critical factors, said CEO John Butcher.
The initial engine was the 2019 Caribou cabin design rollout. The prototype is a 600-square-foot drive-thru model with a walk-in window, but no seats inside. Restaurant offers a full coffee bar, limited dining options, and outdoor seating / dining on the patio, according to the brand’s FDD. The coffee chain has since opened 17 of those stores, with around half a dozen expected to open by the end of 2021.
The second contributing factor, according to Butcher, is that caribou have been “pressure tested” in the past 18 months due to COVID. Despite these challenges, the CEO says the brand continues to be “incredibly strong”.
The third and final aspect is the formation of Panera Brands, a newly formed casual and fast-paced platform starring Panera, Caribou and Einstein Bros. Bagels. The three concepts combine for nearly 4,000 sites and 110,000 employees in 10 countries. Butcher says the new alignment connects Caribou with “other successful blue chip companies and provides access to help us accelerate and amplify our growth in certain key areas.”
“We think the time is right for all of these reasons,” notes the CEO.
National franchising will be Caribou’s fourth growth lever, the current three being licensing in the United States (135 stores), company-run outlets (314) and international franchising (269).
Butcher says expanding corporate stores will remain a priority, as will licensing, which is similar to franchising. As part of this partnership, Caribou signs agreements with host facilities that have an integrated captive audience, such as airports, college campuses, casinos, resorts and corporate headquarters. The executive considers these kiosks as opportunities for awareness and success for future franchisees. This type of format offers a full coffee bar, dining options and seating where space is available, says the FDD. Kiosks are approximately 300 to 1,000 square feet in size and can accommodate drive-thru.
Although the franchise strategy in the United States is new, Caribou is not launching the unprecedented program. The coffee chain has been franchised internationally since about 2005, and Butcher says the experience gives Caribou a head start and gives the company confidence that it will know how to support future U.S. operators.
The executive noted that Caribou has a strong reputation in the Midwest and Southeast, so these will be the key markets in which the brand will seek “sophisticated and proven franchise operators to help us grow.” In the middle of this process, the chain will focus on the quality of the operators, not the quantity.
“We want the right franchises,” says Butcher. “We want high quality, high caliber people who care about our brand and care as much as we do about serving people. We will have high expectations for the growth we drive, but it has to be the right growth. We focus our attention on finding the right partners, not many partners. “