Building business from the 'grounds' up

Posted: Thursday, April 06, 2000

FLUSHING, Mich. -- Inside the Coffee Beanery's unassuming headquarters, where the air is thick with the fragrance of coffee, one white wall seems a little off. It's dotted with picture-hanging hooks -- but no pictures hang from them.

The artwork that once was there now graces a new Coffee Beanery franchisee's store -- on loan from company President JoAnne Shaw, one of her many efforts to help her franchisees succeed.

''I try to share as much as I possibly can. I owe it to people,'' says Shaw, who's also been known to co-sign loans and help managers get their own stores.

''If I can build a $20-plus-million-dollar business on a high school education and a shoestring, anybody can do anything.''

At 56, Shaw is the co-founder and president of Coffee Beanery Ltd., a chain of about 190 coffee shops and kiosks in 32 states that grew from a challenge to sell gourmet coffee at a time when people didn't exactly flock to coffee shops.

In February, she was sworn in as the first chairwoman of the 40-year-old International Franchise Association of 30,000 members.

''She has been a strong mentor for women,'' says Terry Hill, the association's spokesman. ''When they see a woman leading in an organization like this it will open up information and lines of communication that women can be active in franchising.''

Shaw attributes her success to persistence -- the kind she and her husband needed when they put up everything, including their house, as collateral for their first store.

''I've seen people just get so close and just give up -- and if they'd have just gone that little bit more they'd have really been successful,'' she says. ''I think people limit their abilities.''

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As a teen-ager, Shaw was intrigued when a speaker told her senior class that five students in the room would make their mark. One, the speaker said, would be very successful.

''I wanted to be one of those five,'' she says.

But she didn't really have a plan. Thinking she might want to be a nurse, she volunteered at a hospital. She discovered it wasn't for her.

''I could do the work, but I couldn't handle the emotional part of losing a patient,'' she says.

She got married a week out of high school to Julius Shaw, and went to work for his parents' catering and coffee service company. There, her husband says, the young woman who was shy at the time began to build her business savvy.

''She got out there and could see that she could do this,'' he says. ''The little successes started adding up.''

After nearly 15 years helping her in-laws, Shaw wanted to start her own business. But it was 1976, and blocks of coffee shops filled with people sipping lattes didn't exist.

''People not only didn't understand that there was quality coffee, number one. The fact that it should cost more money, it was an incredible thought for people,'' she says. ''I couldn't give away espresso and cappuccino.''

Determined to develop a base of coffee-craving customers, Shaw created and marketed dessert, iced and flavored coffees at a mall in Dearborn. It meant 80-hour work weeks, and she didn't take a paycheck for more than a year.

''When we opened that first store there truly wasn't enough money,'' Shaw says. ''I said 'whatever it takes, we'll just make it happen.'''

Gin Clausen, now a franchisee with three shops in west Michigan, was with Shaw when she opened that store. Even on that first day, Clausen says, Shaw was talking expansion.

''Even back then, she was very exciting, very dynamic -- really innovative ideas. ... Her wheels were always turning,'' Clausen says.

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Shaw can do nearly everything in the company -- she's even taken part in the roasting process, and often acts as taste-tester for the coffee the company sells. Early on, she fixed the coffee brewers.

''I always wanted to be the very best at everything,'' Shaw says. ''I wanted to be as good a franchisor as McDonald's, and then give customer service as good as Nordstrom's, have the stores look and be as good as in my mind, Williams-Sonoma or some of the very best retailers.''

In 1991, Shaw was named Inc. magazine's Entrepreneur of the Year. By fiscal year 1999, the Coffee Beanery had systemwide sales of more than $51 million. Her latest goal: to grow her company to 2,000 stores in five years.

In comparison, Starbucks, the largest coffee retailer, currently has about 2,800 stores. The Coffee Beanery ranks third in size behind Starbucks and Diedrich Coffee Inc., which owns Gloria Jean's Coffees, according to the Specialty Coffee Association of America.

Shaw also sets goals in her personal life. She taught herself to type, recently met a goal to lose weight, and wants to improve her golf game. She's working on learning to read 500 words per minute.

''She takes a lot of pride in what's been accomplished,'' says Kurt Shaw, one of her two sons. ''She puts all of her heart, soul and energy into whatever she does.''

Shaw, who also has eight grandchildren, writes a list of goals every day as a way to keep the business looking forward. To that end, the Coffee Beanery recently revamped its decor, using coffee-growing countries as a theme.

''She's one of those ... that thrives on challenges. She doesn't look at a problem as a problem -- she looks at them as a challenge,'' says Richard Rennick, a friend who runs a business in Palm Springs, Calif.

Rennick calls her an icon in the franchising world.

''People can come to her. She doesn't care if you're just starting out. ... She'll take time to speak with you, whether it's the janitor or the CEO,'' he says.

Following Hurricane Mitch, the Coffee Beanery launched a fund-raising campaign and donated $15,000 to help the people of Guatemala, Honduras, and other Central American countries.

Shaw has a dedication to coffee -- and to the people who grow it. She says when she visited coffee-growing countries and saw the growers' pride in their product, it reinforced ''how special that beverage is.''

''Coffee's a warm, friendly beverage. It says 'welcome to my home, welcome to my store,''' she says. ''It's an honor to serve coffee.

''It's a business that just extends a handshake, a warm handshake to people.''

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