Michigan’s BIGGBY COFFEE Founders Keep Saying ‘No’ to Potential Buyers. Here’s Why.

EAST LANSING — It was one of those early Arby’s restaurants, built in the 1960s to resemble an old-time covered wagon.

After the Arby’s closed, the small building on West Grand River Avenue sat empty for a few years.

Twenty-five years ago, it reopened as the first Biggby Coffee — then called Beaners Coffee. No more roast beef for sale. But how about a caramel latte?

Since that first Biggby opened in March 1995, the company has grown to be a major regional coffee chain and competitor to giants such as Starbucks and Dunkin’. Today it has 240 franchise locations in 11 states, with plans to open 50 more by year’s end.

The brand’s reported same-store sales, a key business metric, grew 6.2% in 2019 compared to a year earlier. By comparison, Starbucks reported 5% same-store sales growth for its most recent quarter and Dunkin’ had 2.8% growth.

To celebrate its 25th anniversary, Biggby will run a special promotion in all its stores on March 25 with 99-cent 16-ounce drinks, hot or iced, until 7 p.m.

That very first Biggby closed in late December and moved across the street into a new space that is on the ground floor of an apartment building and, most importantly, features a drive-thru window.

In an interview Tuesday at the new Biggby across from the now-empty first location, Biggby’s co-CEOs Bob Fish, 56, and Michael McFall, 48, gave an emphatic “no” when asked if they would consider selling their now-ubiquitous Michigan-born coffee chain.

“We could sell the company in a heartbeat, in a split second,” McFall said. “We get contacted by private equity regularly. We were approached by a wealthy restaurant family recently, corporations — the whole gamut.

“The thing for us is what the heck would we do? Bob just said to me last week, ‘I’ve never had more fun and enjoyed showing up to work more in my 25 years than I do right now,’ ” he said.

To that, Fish added, “It would be pretty boring. And that’s not a workaholic statement by any means. What we’re saying is we love the sort of perpetual development of the business.”

A lot has changed at Biggby in the past quarter century. For starters, the cups initially came in just two sizes — a 10-ounce “short” and a 16-ounce “tall” — and the standard latte was still under $2.

Yet for many Michiganders in the mid-1990s, an era before cappuccinos and lattes were commonplace across the state, paying much more than a buck for a cup of coffee was a new concept.

“It was our job to begin to teach people the difference between having a custom, specialty drink and a pot of coffee in the back of your kitchen,” Fish said.

Based on the subsequent explosion in the number of coffee shops and $3.49 bottled coffee drink options, the industry succeeded.

“The same thing happened in the beer industry … the same thing happened with bread,” Fish said. “It used to be Wonderbread, and then there was whole wheat, and now you go down the aisle and it’s really quite amazing what you can get.”

One of Biggby’s two original cofounders, Fish had been a part owner of a Flap Jack restaurant in Lansing when, in 1993, he and business partner Mary Roszel sold their stakes in the pancake house to start a coffee house.

Fish recalled getting inspiration from an early visit to Espresso Royale, a coffee chain that was then starting to pop up in college towns.

“To be honest what happened is I walked into Espresso Royale, it was the first café that showed up over here, and I was like holy (smokes) — specialty coffee could be a thing,” Fish said.

McFall was among the first Biggby employees, starting as a part-time barista in fall 1996 while also working as a research assistant at nearby Michigan State University. He was later tapped to manage the second Biggby location and went on to help lead the company’s franchising.

All in on franchising

Biggby was expanding fast by the early 2000s with a mix of franchised and company-owned locations. But they wanted to grow faster.

It was Fred DeLuca, the cofounder of Subway, who convinced Biggby’s owners to double-down on the franchise business model and sell its company-owned shops. At the time, Biggby had about 60 franchise locations plus nine company-owned locations, including the original in the old Arby’s.

“On his visits here, we would be like students with a teacher — this guy had built the most successful franchise in the world,” McFall recalled. “One time he said, ‘Guys, don’t take this the wrong way. But you kind of suck at running company-owned stores and you kind of suck at franchising, so you need to choose one or the other.

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