November 25, 2020

Tips For Scaling A Coffee Chain

Most of the world’s best-known café chains started off as a single neighbourhood coffee shop. While some café owners set out to simply serve good coffee to local people, others choose take their coffee further afield and scale their business to create a chain. 

No matter what the motivation is, however, scaling up a coffee shop is not an easy journey. It is fraught with challenges and obstacles, and for many, there is a steep learning curve in the journey from one shop to multiple.

So, to understand more about the experience of scaling a coffee chain, we spoke to some coffee shop owners from across the world. Read on to find out what they said.

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Chain Reaction: Why Do You Expand? 

Taking the decision to expand from one shop to several isn’t easy. Café owners might do it for a number of different reasons; some will spot an opportunity in another location that hasn’t yet been snatched up, while others will find that they’ve developed such a reputation that landlords or investors approach them with potential spaces in mind.

Ralf Rueller is founder of The Barn Coffee Roasters, a ten-store chain in Berlin, Germany. Just a decade ago, Ralf says that The Barn only operated one café, just a short walk from his apartment. Now, he says, the chain not only has ten stores, but also roasts and ships single-origin coffee around the world.

Ralf tells me that he never intended on opening new stores. Instead, he opened each one as new opportunities arose. “We’re never actively looking for a location,” he says. “It’s like finding a flat or a house. Sometimes, you walk in, and you just feel like it’s right.

“For us, there are certain areas where we feel like our community belongs. These spaces have to either be landmark buildings, or have some kind of special architecture or history that we can relate to.”

Choosing a new location is never easy, whether you’re looking to stay in the same area or city or open a new branch further afield. It’s important to examine what made your first café successful; cross-reference this with what a new location offers to see if it will work for you. 

Jess Reno is the owner of Nemesis Coffee, a two-store chain in Vancouver, British Columbia. He tells me that this is how Nemesis chose its second location. The success of the first location, Jess explains, was partly due to its proximity to certain buildings and businesses.

“Our first location was in Simon Fraser University, where there are a lot of important food and coffee venues,” he explains. “It’s close to a lot of small businesses involved with tech and art. We felt it made a lot of sense for us to be located there.” 

Jess notes the similarities with Nemesis’ second location in The Polygon Gallery, which is understandably grounded in art and technology. He says that it’s important to ask yourself whether or not a location will be an “urban magnet”.

He says: “Are you learning something there? Is there something beautiful about it? Does it attract people? Is there transportation? What makes it unique?” These are all important questions you need to ask about a potential new space.

Finding Your Identity & Staying True To Your Roots 

When you opened your first location, you probably put time and effort into defining your brand. Keeping this in mind will be essential as you expand.

Jess tells me that when opening his first café, he concentrated on articulating the café’s design, unique service, and branding. He also concentrated on how the space felt as a whole and the role it had to play in the surrounding neighbourhood. 

“That’s part of the challenge,” he adds. “Trying to identify a space that makes you and other people feel something… you then need to challenge yourself to make it last a lifetime.”

As you grow, be mindful of the philosophy and identity you set in place when starting out. This might be certain areas of your design, or the unique way that your café serves customers. Unity is important to create and maintain a cohesive brand across multiple locations. 

Shelagh Ryan is the founder of the Lantana Café group, which has three locations across London. She says: “Originally, I was trying to create the type of space that I wanted to hang out in. I think we’ve managed to maintain those focus points as we’ve expanded.”

As your business grows, many people will advise you on which direction your brand should take. And while adaptation is important, most café owners have a vision that they want to stick to, even when scaling a chain. 

“It’s important to stay true to your vision,” Shelagh says. “Don’t get put off or distracted by what competitors are doing or what others tell you to do.

“Competition is great; it forces you to stay on your toes and constantly improve what you offer. But you should never try to copy others. It won’t be authentic, and a lack of authenticity shows to customers.”

Managing Team Members Across Locations 

Knowing how much control to retain is a common challenge that operators face when they open another location. Many café owners who operate chains are actively involved in running a number of locations, but if you open more and more, it will get to a point where it just becomes infeasible. 

Shelagh says: “As someone who likes perfection, it’s difficult to take a step back and relinquish control. As my business has grown, I’ve had to accept that I can’t physically do everything myself or micromanage things to ensure quality.

“That’s part of the challenge of expanding; putting the right people and systems in place to deliver the quality you want.”

Ralf says that without the right staff, it would be difficult to reach the levels of quality that The Barn aims for. “After Covid-19, we’ve slimmed down our team to those who want to be here, are motivated, enjoy working with us, and are willing to follow our mission,” he says.

“If you’re claiming to offer the best cup in town, you need to present it in the same way across multiple cafés. That’s the big challenge: keeping all locations consistent in terms of service and quality.”

Stretching Yourself Too Thin & Other Challenges

Expanding isn’t easy, and some café owners feel that expanding to offer the same experience in multiple spaces might detract from what made their original location unique. Regular customers might also feel that the “magic” of your first location can’t be replicated elsewhere.

However, expansion is a huge opportunity; this massive change should be viewed as an opportunity to strengthen what your business offers, rather than “selling out” or compromising your authenticity.

Shelagh tells me that a new location gives café owners the chance to create a more sustainable business by giving it a stronger growth platform. “More locations are more interesting as a business owner,” she says. “Each one has its own challenges and rewards.”

Finally, while some optimistic owners think that multiple locations might mean lower operating costs per branch, that is not always the case. “There are economies of scale to consider with suppliers,” Shelagh says. “I think you have to be one of the big players to get much in the way of discounts for multiple sites.”

While you might not benefit from reduced operating costs, however, your business will benefit in other ways – as will your staff members. Growing your business also means growing your team, naturally creating more incentives and exciting new opportunities for staff to move into more advanced or specialist roles.

Ralf says that finding experienced staff was challenging, as he needed to hire people with experience in specific areas which was often difficult to find. Instead, he says, he decided to invest in his existing workforce and educate them to the required standards.

“We opened a training centre,” he says. “I don’t think you can afford that when you have a single shop.

“But for staff members, that creates a clear career path. It also shows them that if you work hard and perform well, you can climb the ranks. We have many examples of that with people that have worked with us for years.”

Expanding from one location into a chain is an exciting but ultimately strenuous and challenging opportunity. The key is not to rush the process.

Scaling a chain requires the right location and the right team; you need to make sure that both reflect your brand and your organisation’s goals. However, by treating each new location the same as your original coffee shop, you’ll be able to deliver the quality and authenticity that originally made your brand a success.

Enjoyed this? Then read Onboarding New Baristas: What Café Owners Need to Know

Photo credits: Laura Fornero, Julio Guevara, Nicole Motteux, The Barn

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