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How the Franchise Industry Tapped Into the Craft Beer Trend

How the Franchise Industry Tapped Into the Craft Beer Trend
Image credit: Photography by Ben Alsop

The craft beer ethos is pretty much the polar opposite of franchising--create something unique, difficult to reproduce, locally focused and, often, ephemeral. In many cases, brewers who could easily scale up to national distribution choose to stay small in order to maintain quality control and develop strong regional relationships.

So it's interesting to note that there's a craft beer boomlet happening in franchising. Despite the differences between the beer world and the franchise world, the industries have turned out to be a good match, reinforcing a long-held truth: With beer, anything is possible.

That's something Scott Zepp of Pensacola, Fla., can get behind. After coaching high-school baseball for five years (and taking his team to the state championships), Zepp was looking for a new challenge when, in 2004, Hurricane Ivan decimated his home. He saw it as a good time to start over, so he cashed in his 401(k), moved to Tampa and opened a liquor store with his best friend. He promptly began hemorrhaging money.

Luckily, a local businessman bought the store and hired Zepp as a manager. And that's when the beer bug really hit him. "I developed a passion for home brewers and local brewers," he remembers.

World of Beer offers some 30 rotating taps and 500 bottled brews.
World of Beer offers some 30 rotating taps and 500 bottled brews.
Photos courtesy of World of Beer

After helping expand the store's beer selection, he moved on to an apprenticeship at another retailer with hundreds of craft beers, where he honed his taste buds and developed a plan for a laid-back bar with a massive selection. Zepp thought that since exposure had turned him into a beer geek, he could get others excited about quality brews as well.

In 2007, with friend Matt LaFon, Zepp opened World of Beer with 30 rotating taps and more than 500 bottled brews. It was a risky move. "We both came from really humble beginnings, but both our parents put up their houses to help us start the original concept," Zepp says. "It was the coolest thing anyone has done for either of us. We had our backs up against the wall, and failure was not an option."

World of Beer offers some 30 rotating taps and 500 bottled brews.

Six years later World of Beer has 44 locations in 14 states and has sold a couple hundred more. As a franchise, it has taken off not simply because Americans love beer--consuming about 21 gallons per capita in 2012, according to the Beer Institute. It's also because Zepp and LaFon have, for the most part, stripped out the kitchen, which greatly reduces overhead and lets franchisees keep their focus on the taps, not on having to run a restaurant. World of Beer is not a bar and grill--it's a taproom with snacks.

"I always say, the beer pulls customers in, and the people keep them there," Zepp says. "You go to work, you go home, then you go to World of Beer and have a good time and hang out with friends."

World of Beer offers some 30 rotating taps and 500 bottled brews.

Richard Reeves, a veteran restaurant franchisee who owns seven World of Beer locations, remembers the first time he visited one of the taprooms and saw customers sitting around a pizza box. "When I figured out the pizza came from somewhere else, I said, 'This is a great idea!'" he recalls. "Old restaurant guys wouldn't have figured it out; it took a couple of young guys who didn't know they couldn't do that stuff. A serious restaurateur wouldn't have been able to conceive a franchise like this, without table service. But the lack of food is the catalyst that really got me involved."

As it grows, however, World of Beer has decided that a small selection of simple food items, as well as craft spirits, is necessary to build sustainable unit economics. CEO Paul Avery says he is slowly rolling out a 17-item, beer-centric food menu, all items under $10, including beer-battered shrimp, flatbreads and sandwiches. He also is experimenting with a line of beer cocktails. "We'll have things like a classic margarita made with an IPA, or a blueberry cosmo made with a wheat beer," he explains. "What food and cocktails do is broaden our appeal."

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Jason Daley lives and writes in Madison, Wisconsin. His work regularly appears in Popular Science, Outside and other magazines.

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This article was originally published in the September 2013 print edition of Entrepreneur with the headline: Turning on the Taps.

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