Is Blaq Sheep a Black Sheep in the Coffee Industry?

Is Blaq Sheep a Black Sheep in the Coffee Industry?

A new player seems to be entering the Vancouver coffee market – Blaq Sheep Fine Coffee.  Although they have a website, it does not do any justice to the actual brand experience which indicates further that something is bubbling under the surface.  For example, on the day of this post, you can go through most pages of their website and not come across their very cool logo of the sheep.  Yet, a quick search the image section of a major search engine will reveal a more accurate display of their shops, signage, and branding in general.

So what is a black sheep?  Turning to the never-failing and always true Wikipedia we read that  a black sheep is usually a negative term of someone who doesn’t fit in or has gone wayward.  Essentially, it’s someone awkward, eccentric, or ‘too unique’ who doesn’t fit in with the crowd.  But don’t forget that Jesus left the herd to go and find the one sheep that went sideways.  Jesus cared deeply about the one black sheep.  The most well-read book in the history of the world, the Bible, constantly teaches that it’s not wise to follow the herd (those who surround you) because they are heading towards destruction.

But what does this mean in the Vancouver coffee industry?

This means opportunity.

Vancouver is saturated up the yin-yang and out the other side with coffee shops, but if you ask espresso drinkers where the good coffee is, there aren’t too many enthusiastic replies.  In a land with so many coffee shops (and sushi shops while we’re at it), most of them seem to fit under a handful of brands. When you get out of the Kitsilano, Gastown, Main Street or the Commercial Drive ‘coffee zones’, the story gets even worse.  So, for a city that has so many coffee shops, there is a surprisingly low number of either extremely high quality shops, or shops that are stepping out on a limb to be different.  Most of them are slight variations of each other but following a very similar model of Italian espresso drinks with some pastries and the odd panini – nothing wrong with that and there is probably good arguments against breaking what might not be broken, but where are the boat-rockers or the feather-rufflers?

Blaq Sheep Fine Coffee, on the other hand, appears to be totally separating themselves from the herd.  Our first reports are that they have a ‘very good coffee’, unique and good food program, and a decent selection of alcoholic drinks coupled with a unique atmosphere.  Their slogan on their sandwich board ‘Outstanding in our Field’ right under their logo should be both entertaining to the customer, but a concern to competitors.  It’s a bold statement of who they are and what they are planning.

It will be interesting to learn more about their products, their business model and ‘black sheepness’ of their branding as they grow from two locations.

blaq-sheep-logo

 

Blenz Coffee Sells Off Corporate Training Centre at Prestigious Library Blenz

Blenz the Canadian Coffee Company LTD has sold their corporate training centre at Library Square to a new franchisee.  A sign reading “This location has new owners! We look forward to serving you!” was posted on the window.

new-owners

This location was a very useful component to the Blenz brand and had been the location used not only for giving new franchisees (owners) a chance to train with the public before running their own stores, but also for hosting events such as ‘That Barista Thing’.  They also used the location to do dry runs on new products and get feedback from customers.

This location has a challenging history as it was reportedly owned by a franchisee before Blenz took over the location from the upset owner.

Adding to the story of the sudden recent change of hands of this prestigious location is the simultaneous erection of a dividing wall between what was the ‘training side’ (left) and the ‘customer side’ (right) as shown in the this photo:

closed-training

This most serious corporate decision begs the following questions:

  • Where will new franchisees in the Blenz chain get trained moving forward and how will this affect the quality of the training?
  • Has Blenz protected the current owner of this Library Square location from a potentially competing business opening right next store?  There is not hint of what kind of business will be moving in to the former training space.  What if it turned out to be another coffee shop or tea shop?
  • Why did Blenz sell this location?  Did the city of Vancouver charge too much rent?  Our reports show that lease rates in Library Square are some of the most manageable in the city.  There are fewer locations with such a captive audience as library square.

This seemingly silent transaction should prompt franchisees and all stakeholders involved with Blenz the Canadian Coffee Company LTD to be on high alert if this decision was indeed not explained in advance.

As always, send us your industry information and we will be pleased to do a follow up report.  We are here to help.

Waves Coffee Location Introduces Two-buck-per-hour Minimum Seat Charge

That’s a buck per cheek per hour – not bad!

We apologize for the low image quality but it was taken by someone in the public who thought we’d be interested in covering it.  Here is what the text on the sign reads:

————————–

DEAR VALUED CUSTOMERS

In recent weeks we have received many “Customer Comments” regarding “Waves” never having seats available and some customers staying for long periods of time without purchasing anything.

To ensure more customers have a chance to enjoy our facility, there is now a $2.50 per hour, per seat minimum charge

Thank you for your continuous support!

Waves Coffee

—————-

No one understands this Waves Coffee location franchisee (owner) more than the members of the VCSFA do.  It’s the message behind the sign that most people out there will never understand.  Within the lines of the text of this sign is found the foundation of the VCSFA.

If this sign were found at an independent cafe, it would be understandable.  The customer would think “Mario is having a hard time with cheap, abusive college students in his cafe so he’s going to get rid of these freeloaders with a butt-cheek penalty – ingenious!”  In fact, he’d probably get a lot of positive press for that.

But this isn’t an independent.  It’s a franchise – And a big one in Vancouver.

Customers of this location will look at the sign and say to themselves “That’s weird.  I’ve been to many other Waves and I haven’t seen this rule before.” Or, “McDonalds is a franchise and they don’t do this.”  And they will leave thinking somewhat less about the brand because of this inconsistency, even if it’s subconscious.  They will start thinking of this location more of an independent than a chain.

But what drives this inconsistency?  Why would this franchisee feel strongly enough to put this kind of sign up?  You can be sure the franchisor does not know about this yet.  It would not be there if they did.

Profit.  They aren’t making enough.  It’s that simple.

This franchisee of this location isn’t making as much money as he or she feels they ought. If the money was flowing in, they wouldn’t be too worried about the freeloaders. If you don’t believe us, go and test us it for yourself and ask.

So, from the street the cafe looks full – so full that there aren’t enough seats.  Yet the franchisee had to put this sign up?

Waves Coffee has a particularly punishing business model which you will soon see more and more franchisees rebelling against.  They would like all their stores to be open 24/7 and have unlimited and free WIFI for their ‘customers’.  Does anyone see the flaw in this business model yet?  Maybe the sign above in the photo might shine some light on it.  At least with Blenz they ask their franchisees to use a non-free but fairly innovative system of marketing that’s attached to the WIFI system which gives the franchisee some control over the length of connection.

But Blenz has its own questionable ‘programs’ for their franchisees.  One such example is their ‘Free Birthday Drink’ that they desperately try to get their new franchisees to adopt. It sounds great from the customers side but… oops!  They forgot to force a minimum order with this free drink (and this ain’t just a regular drip coffee – it’s ANY drink!) so the franchisee soon learns that if they participate they are buying free drinks for every Tom, Dick and Harry around town.  You read that right!  Just walk in, say ‘it’s my birthday’ and walk out with a drink paid for by the owner of that Blenz because head office doesn’t offer any compensation to the franchisee when they do this for the sake of the brand – straight loss of goods out the door. Needless to say that participation in this program has not had great success across the chain.  If you want to try this out for yourself, we recommend the Library Square location – the operators of this location always give it away for free with a smile.

So then what can a franchisee do?  The franchisor should have been there to help this franchisee address their issues and support them to come up with a system to overcome these challenges so that it doesn’t appear to the customer as a brand inconsistency.  Since this franchisee is not a member of the VCSFA, they wouldn’t have access to our vast resources and may not even know that a WIFI system exists out there that could help them overcome this.  WIFI and freeloaders is a commonly discussed topic amongst our members and innovative idea sharing has lead to improvement in this area.

Where is the franchisor?  Why is the franchisee forced to seek outside of their chain to stop the bleeding?  Where are the ears to hear and the hands to help? Why are they spending over 7% of their revenue on royalties only to end up running their shop like an independent and having the public look at it that way? Franchisees expect a certain amount of support for this royalty yet in many cases they are left to figure it out on their own.

We hope that this Waves owner has great success with their butt-cheek-penalty program. I’m sure every VCSFA member would love to institute it themselves! We hope the freeloaders go abuse someone else, as well. But more importantly, we hope that this franchisee will join the VCSFA and dozens of others who also had nowhere else to turn and need that edge of support to better their future.

Until then, I think I just used $5 worth of butt-space writing this so I better sign off.

Five Signs of Excellence in Franchising – a Must Read

This article is an absolute must read for all prospective franchisees (franchise operators) and current franchise owners.

The VCSFA completely agrees with these 5 measurements of excellence and we are excited that a reputable organization has published this.  It is backed with actual research as well, which is a great bonus.

After hearing horror stories in coffee shop franchising in Vancouver, we ran a quick check amongst our members and the ones who are suffering agree that their franchisor failed at least half of these measurements.  In fact, one chain has failed all of them.  Here is the list of five points from the article with some concrete examples of how some of our members were failed by their franchisor:

Five behaviours of credible franchisor leadership

  1. The franchisor demonstrates a clear strategy and direction for the brand (including awareness of competitive threats with a plan to deal with them).

One Vancouver franchisor has not acknowledged the sudden emergence of a competing brand, nor attempted to match their radio advertising on a local news channel.  Customers are asking the franchisees why the competing chain is advertising and they are not.  The same brand has completely different standards of ‘branding’ applied to different stores.  This is interpreted as ‘favouritism’ by the franchisees creating a poor business environment.

  2. The franchisor is fair and consistent in dealings with all franchisees (this means having clear policies and sticking to them).

This same local Vancouver coffee chain has also failed this.  Some stores are making their own sandwiches while other stores were told they would be ‘in violation’ if they did and that the stores making them are ‘special cases’.  Some stores were told they must do certain things while others were not.

  3. The franchisor shows respect by listening to franchisee ideas and concerns before making important decisions. However listening does not mean agreeing.

In the case of this same failing chain, several franchisees requested urgent meetings with the directors to discuss very important issues that affect the whole brand.  One franchisee was told to wait 3-4 weeks because ‘it was summertime’. The franchisor never got back to them and when the franchisee pointed this out, they immediately tried to remedy it but needless to say putting off an urgent meeting for 1.5 months make this person feel loved. Many of the franchisees have asked the same franchisor to address issues related to their business and the franchisor has remained silent – completely ignoring the questions.  Needless to say this entire chain is quickly approaching a crisis.

  4. The franchisor embodies the values of the brand in their own behaviour. Hypocrisy kills brand passion like nothing else.

When confronted by franchisees about expensive vendors that they were forced to use, the franchisor replied “The vendors must make money, too.”  However, when the franchisees themselves were going bankrupt, there was no support or help was given.  The chain continues to force on their franchisees the same vendors.  This chain talked endlessly about ‘the importance of brand’ yet in the same city they opened a location in a hotel lobby in prominent location with a ‘similar’ but not ‘same’ name.  The sleeves are from the chain but the cups are branded to the hotel.  Some of the drinks are the same but the entire concept is muddy and unclear.  Customers around the city have asked the franchisees ‘what is this thing?” to which they have no reply.  Hypocrisy kills the brand.  A franchisor must practice what they preach or risk losing the trust of their entire front line.

  5. The franchisor reminds franchisees that he/she and the entire support team care about franchisee profitability as much as their own.

As mentioned in some of the examples above, this same offending chain has demonstrated to their franchisees that they don’t care about their profitability as much as their own.  No offer of reduced royalty payments to struggling stores.  No offer of reduced marketing fund payments for the obvious absence of advertising.

Thankfully for the franchisees, times have changed quite a bit recently.  If you read this article we published about the Dunkin’ Donuts situation you will learn that a franchisor cannot simply continue to fail.

In addition to this 5  point health check you can now perform on your franchise or your prospective franchise, we strongly recommend you also read this article we published about Five Things You Should Know Before You Buy a Coffee Shop Franchise as well as our Checklist to Evaluate a Prospective Coffee Shop Franchise (with bonus commentary)

Don’t forget that the VCSFA is always here to help.  You are not alone and your questions are important.

In case you have not see our most up-to-date list of coffee shop franchises in Vancouver, here is a list in alphabetical order.  Let us know if we’ve missed any:

 

Bean Around the World, Blenz, BG Urban Cafe (formerly Bread Garden), Cultured Coffee and Tea, Esquires, Moka House Coffee, My Cup, Second Cup, Serious Coffee (Vancouver Island), Take Five Cafe, Tim Horton’s, Wave’s Coffee, Wired Monk

 

 

Second Cup Expands into USA

This article is interesting as it shows that Second Cup is still growing in other markets.  It’s no secret that they have not been doing so in the Vancouver area, though.  I remember when I was growing up there were many more Second Cup locations around the lower mainland.  Now Blenz (and even more recently Waves) have all but taken that market away.

I would like to reach out for some authors to do a bit of research into this topic to find out some answers to the following questions:

  • If Second Cup has such a big following (which it still does) why did they decrease in market presence here in Vancouver
  • Why did Second Cup choose to expand in the USA instead of, say, attempt to battle it out in BC again?