Classic Rock Coffee LLC founder Kent Morrison, left, recently hired Brett Payne as director of franchising operations to lead company expansion plans.
Business Spotlight: 'Breakfast in America'
After 18 months of operations, Kent Morrison’s rock-themed coffee shop is ready to roll into bigger venues through franchising in 2013.
The concept for Classic Rock Coffee LLC came to Morrison while he was selling his Shake This line of protein smoothie shakes and retail counters to fitness centers across the country.
“We had several fitness centers expressing interest in coffee, which was something we weren’t doing at the time,” Morrison says. “We started learning more and more about coffee to the point where we thought we could roast our own coffee to provide to fitness centers selling Shake This products.”
Shake This started in the late 1990s to create a social environment inside the Springfield health club Morrison operated, and it now sells 22,000 pounds of protein mixtures to 250 fitness centers per month, netting 2012 revenues of $2.52 million. Morrison sees similar potential with his latest idea.
“As we started visiting coffee shops around the country while installing new smoothie bars, I started thinking ‘Man, all of these coffee shops are a lot alike – very laid back, very low key and quiet places,’” Morrison says. “Then I thought, ‘Coffee is a stimulant; people are drinking coffee to wake up – why are we putting them in a library setting? Let’s wake ‘em up.’”
By connecting high-octane music with caffeinated beverages, Morrison launched the Classic Rock Coffee concept in August 2011. He opened in 2,500 square feet at Kansas Plaza, 1900 W. Sunset St., with a startup cost of roughly $250,000 to deck out the space with a sound system, stadium lighting, hanging guitars and classic band posters. In its first calendar year of business – with AC/DC pumped through the speakers and bathrooms lit by black lights – Morrison says the coffee shop recorded $390,000 in revenues. Popular items include espresso drinks named “Sweet Emotion” and “Cinnamon Girl,” as well as “Back in Black” and “Breakfast in America” signature coffees that also are sold by the bag in area grocery stores.
“We know classic rock music is never going to go away,” says Brett Payne, who recently was hired as Classic Rock Coffee’s director of franchising operations to lead the charge toward expansion. “And coffee is never going to go away. Kent has found a way to bring this hybrid of a business together that is going to be sustainable for a long time.”
Morrison says he opened the coffee shop in west Springfield to serve as a model for potential franchisees. Morrison and Payne are negotiating with their first franchisee, and they’re targeting six franchisee agreements in 2013.
“Initially, we thought that we might franchise this by just showing the concept on paper, but it became apparent that we need to show [potential franchisees] how the store works and how things look, hear and taste,” Morrison says. “The last year and a half of the company’s operation has been to establish Classic Rock Coffee as a kind of a hub for the purpose of franchising. We’ve had folks contacting us saying ‘Hey, we’d like to put one of these in Austin,’ or to put one in Dallas or Chicago, and the answer has always been, ‘We’ll take your information, but we’re not really ready for that right now.’”
In recent weeks, Morrison and Payne began returning those calls to lay the groundwork for expanding the brand to other cities.
“Once we have those first six up, we’d like to get at least one a month and then, ultimately, two a month the next year. But it all depends on the quality – we want to go as fast as we can, while providing great quality,” Payne says, noting Classic Rock would prefer to first sell franchise rights within three hours of Springfield to more quickly provide assistance should problems arise.
Payne says franchise startup costs range from $218,000 to $420,000, including a $25,000 franchise fee and three months of operating expenses on hand.
Classic Rock Coffee employs 13 full- and part-time staff members, and Morrison plans to add up to five more for in-house social media and marketing positions as the six franchises open up. Morrison says 50 percent of 2012 revenues were in the sale of coffee products, and the remainder of sales came from food, protein shakes and miscellaneous retail sales. He says average monthly operating costs are roughly $32,000, with about half coming from payroll expenses, including the company’s on-site coffee roaster.
Tom Johnson, a longtime fitness center colleague of Morrison’s, isn’t surprised to see Morrison roll out another concept.
“That’s the genius of Kent in a nutshell,” says Johnson, the vice president of sales for Collinsville, Ill.-based OrthoTech Sports Medical Equipment, a distributor of commercial exercise equipment. “He’s taking the thing that’s been going on and on for years and saying, ‘You know what, this doesn’t make any sense.’”[[In-content Ad]]