This Coffee Chain Adds New Locations One at a Time

When franchising businesses want to grow, many tend to push a rapid pace by selling multiple locations at once to franchisees who often are backed by investors.

That’s not coffee franchise Aroma Joe’s method for spreading beyond its New England base with its mostly freestanding 800-to-900-square-foot buildings featuring drive-thrus.

The Portland, Maine-based company has taken a more precise approach in growing to 67 locations. It sells them one at a time and gets them to the point where the franchisee chooses to add more locations.

“We’ve not had one franchise fail in six years” of franchising, Loren Goodridge said. “Not many franchises can say that.”

Aroma Joe’s has taken this approach in a coffee franchising market that has grown substantially over the past several years. According to research firm IBISWorld, the industry had an annual growth rate of 5.9% over the past five years and is projected to hit $12 billion in revenue this year.

Dunkin’ leads the way. It has “added more than 1,500 stores over the past five years, expanding into states where it is underrepresented relative to its traditional stronghold in the Northeast,” IBISWorld’s latest industry report says.

Most Aroma Joe’s are in Maine, New Hampshire and Vermont. But it has one in Pompano Beach, Florida, and one in Greensburg, Pennsylvania, 40 miles east of Pittsburgh.

Aroma Joe’s co-founder, Marty McKenna, is opening a second Florida franchise location in Land O’ Lakes north of Tampa. A second Pennsylvania location is set to open in Plum, about 20 miles east of Pittsburgh. The chain has 19 locations in development.

McKenna founded Aroma Joe’s in 2000 with his brother Tim and brothers Brian and Mike Sillon. Before Aroma Joe’s, Marty McKenna had helped launch franchising for Dutch Bros. Coffee, a chain founded in Oregon in 1992.

But franchising didn’t come along until Aroma Joe’s competed for real estate against Goodridge, who was trying to open a Subway. Aroma Joe’s won the spot but asked Goodridge about franchising the coffee chain.

Goodridge had cut his teeth on franchising with Subway, buying his first one in 1991 after serving eight years in nuclear submarines with the U.S. Navy. He owned 30 Subways at one point but has cut back and now operates 19.

He bought into the Aroma Joe’s franchising company and opened the chain's first franchise location in Saco, Maine, in 2013.

He’s focused on the deliberate expansion of Aroma Joe’s since. The chain considers spaces at the ends of retail centers that have room for a drive-thru, where total investment can run between $250,000 to $300,000. But most of its locations are freestanding, which typically require $500,000 to $550,000 in total investment.

The freestanding locations tend to be small, so they can take space on the unused portion of a shopping center's parking lot. Goodridge said a location typically draws 2,500 to 3,500 customers a week.

Because of its relatively small footprint, Aroma Joe’s can take advantage of tight real estate spots where a landlord may not be able to put another use. “We can get into a very expensive area” that way, Goodridge said.