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FRANCHISES


Caffeinated CEO
By Taylor Mallory

Joanne Shaw, president, CEO and co-owner of The Coffee Beanery, built her successful franchise company long before there was a Starbucks on every corner. Shaw, 63, and her husband, Julius (chairman and co-owner), opened their first coffee shop in 1976; eight stores later, in 1985, they began franchising. Today there are 140 Coffee Beanery stores in 20 states, plus two dozen stores in China, Korea, the Middle East and Cyprus.

Shaw, the only woman ever to head the International Franchise Association, talks to PINK about entrepreneurship, franchising, professional success – and, of course, coffee.

What was your work experience before the Coffee Beanery?
When I met my husband, he was running a restaurant and catering company. I eventually ran that business. He became involved in a service that delivered coffee. When we closed the restaurant, I got involved with the coffee business – which I grew from 60 to 200 customers.

How did you finance it?
On a wing and a prayer – and home equity loans. The first one was SBA financing for $55,000 based on our home and coffee service business as equity. In the first nine years we opened eight stores, using home equity financing and equipment loans and leasing to pull together the money for more stores.


What's involved in opening a Coffee Beanery?
The cost ranges from $250,000 to $450,000, depending on the location, size of the store and the amount of equipment. We do have several different concepts – from 100-square-foot kiosks to 2,000-square-foot stores. If new franchisees don't already have a location, we'll go through our real-estate brokerage network to help them find a site.


How would you describe your Life/Work balance?
I make time for family and involvement with church. I try to balance as best I can. We try not to talk about business when we get together. It can be overwhelming and consume your life if you let it. One advantage is that our sons work with me and their families live close by, so we can enjoy family events like my eight grandchildren's sporting events.

Any advice for women thinking about buying a franchise?
Make sure it's something you'll like to do. Realize that it will take long hours and hard work. Putting that name on the building alone will not bring in business. Get involved in your community to get visibility for your business. Make sure your family is committed to allowing you the time it will take. Be sure you're adequately financed for the first few years. Most people don't plan enough in that area.

What's the most innovative thing you've done for business development?

We've always been a leader in our industry. We were the first chain to roast our own coffee, to flavor our own coffee (with no sugar, alcohol or calories) and to have iced coffee drinks. Being creative has been one of our strongest assets. A lot of companies now copy what we do.

 

What was your biggest career mistake, and what did you learn from it?

Hiring the wrong people and giving them way too much leeway without enough direction. Doing that probably set us back more than I would like to admit. You try to evaluate people before you hire them, but they are not always as advertised. And sometimes they may be good, but if you bring them on board and don't give them enough direction, that can be a big mistake. So we've incorporated a new profiling system that indicates an applicant's personality traits, values and aspirations. We've been more selective and made people interview several times with several people in the company. We try to get them to tell us their goals. And we try to mentor people from the inside to move them up. Sometimes they have talents far beyond their current position that we wouldn't have known about otherwise.

 

What's the secret to your professional success?

Persistence and tenacity. You don't lose until you give up. When we first started in regional malls, at the end of our first 10-year lease, the mall developer gave our location to a competitor without giving us a chance to match the rent they were offering. Had we given up or let that devastate us, we would not have grown to this size. We deal with unexpected bumps in the road and keep going.