Joe To Go

Heating Up

Titterington and Rippey aren't the only ones who have caught on to the latest coffee craze. Ken Woods, 41, and Mark Garrett, 42, opened Gotta Java in Pasadena, California, last April--and they've already noticed potential competitors lurking around. "I've caught people outside at 8 p.m. taking photos and using a tape measure to get the dimensions of the structure," Woods says. "But I can't get too mad because that's exactly what I did three years ago. Only I waited until 11 p.m. when nobody was there."

What's luring potential competitors is the notion that a tiny structure and simple menu must mean low overhead and big profit margins. In reality, the recipe isn't quite that simple.

"It's a heck of a lot of work," says Woods. "It's really hands-on. I'm [at the business] all the time." And Woods isn't just talking about the daily duties, which he and Garrett share with eight employees. He's also referring to the three years of research he conducted before taking the plunge. Gotta Java's pre-opening checklist included investigating everything from where to purchase coffee beans to designing a logo, creating a menu and coming up with a building design.

Start-up costs for the initial site, located just a few miles from Pasadena's famed Rose Bowl, came to more than $100,000. According to other operators, this is a modest investment for a start-up drive-thru.

Just ask Caffino's Titterington. His sites run up to $280,000 each before the doors--or windows--are even opened.

How can opening costs for a compact drive-thru location with a limited menu equal the cost of opening a full-service restaurant? Tit-terington explains that in California, as in many other states, drive-thru coffeehouses must meet all restaurant codes, which pushes up costs.

To keep costs in check, many drive-thru owners are setting up shop in parking lots at shopping malls and strip centers. (Leasing space in a parking lot is typically cheaper than leasing commercial property.) Other
location hot spots are on major thoroughfares. A high-visibility locale that's easy to get to and teeming with traffic is crucial to drive-thru success.

Husband-and-wife team Meg Evans, 43, and Peter Lazare, 44, positioned their Grab-a-Java drive-thru on a main street leading into downtown Springfield, Illinois, a site that attracts morning rush-hour traffic. "It's jammed in the morning," says Evans, adding that traffic at the 21-foot-by-15-foot shop peaks at about 7:30 a.m. and then simmers into a steady flow of java junkies throughout the remainder of the day.

And lest would-be drive-thru coffeehouse owners think all coffee consumers are trendy professionals who like their lattes half-caf and low-fat, this trend actually appears to have gone mainstream. Evans, who oversees daily operations at Grab-a-Java, says she and Lazare, who still holds a full-time job as an economist, expected the store to attract mainly young corporate types. To their surprise, that hasn't been the case. "We get doctors, government workers, housewives with children, students, carpenters, nurses, everyone," says Evans. That mix of customers is expected to boost first full-year sales to $150,000.

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This article was originally published in the January 1998 print edition of Entrepreneur with the headline: Joe To Go.

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