Calgary-based Good Earth Cafes Ltd. is setting its sights on acquiring a number of spaces recently abandoned in Canada by Starbucks which has announced the closure of about 300 coffee shops in the country.
Michael Going, Founder and CEO of Good Earth, said the company has retained Stan Boniferro, Managing Director of Stabon Enterprises, to work with landlords and developers in identifying sites suitable for conversion to Good Earth Coffeehouses.
He said the focus will be on sites with proven performance, in-place infrastructure, and opportunity for future growth.
“With their (Starbucks) announcement to close so many stores, obviously we look at that as an opportunity for us to step in and infill in some of the locations that they’re leaving behind. Certainly we’re not looking for 300 locations – and I think Starbucks will end up closing probably more than 300 and we’re hearing that now — we know that out of those there are a number of locations that we would be very interested in and we’re already starting to move on a few of those,” added Going.
“We don’t have an exact number. It will really be driven by the quality of the real estate as we see it and then very importantly by the interest that we have from franchise prospects, franchise partners. We’re very interested in partnering up with groups that want to open multi locations especially in bigger markets in proven real estate. We feel there’s an opportunity rather than going in one cafe at a time to work instead with groups that want to open a number of cafes.”
Good Earth, founded by Going and Nan Eskenazi in 1991, today has 45 locations from Victoria to Montreal throughout six provinces. The heaviest concentration of locations is in Alberta and the home base of Calgary. All of the stores are franchise operated as the company converted to that model about 15 years ago.
“Our intention is to be a 100 percent franchisor,” said Going.
Going said changes in the Canadian coffee landscape induced by the pandemic will leave coffee lovers high and dry in many communities due to the Starbucks’ closures and he feels this presents an opportunity for Good Earth to bring its community-minded coffeehouses to more Canadians.
“(The Starbucks locations) were known as coffee locations with some success and success being traffic and sales produced by the former operators. Certainly we do look at all different types of real estate and we just feel this is a big push for the reasons I just stated. They’re known. They’re typically in a lot of communities that are now going to be left without a favourite local coffee shop.
“While other brands are shrinking, we are stepping up to serve communities. We believe the human interaction that takes place in our coffeehouses is valuable — as valuable as the ethically sourced coffee and fresh food we serve. A coffeehouse is so much more than a drive-thru convenience. Social interaction is part of being human. At Good Earth Coffeehouse we get that.”
Gerry Docherty, President and COO of Good Earth, said this unique opportunity in a competitive landscape offers excellent partnership possibilities for investors looking for multi-unit franchises and for single-unit owner operators alike.
“The pandemic has awakened people’s desire to be in greater control of their lives, something that franchising with Good Earth has to offer,” he said.
Going said it’s no surprise that the hospitality and food and beverage industries have taken a real blow during COVID.
“But people will continue to eat and they will all dine out in force when we can. Coffee is very much a community centred endeavour. We like to get together. There’s the experience that we have in cafes and restaurants. There’s the exposure to other people. We’re so missing that right now. Those of us in the industry recognize that there’s a need to get back to that – to human interaction,” he said.
Abandonment may be the wrong terminology, as that implies shirking responsibility and leaving unpaid rent.
Did Starbucks do that?
Let’s just say some landlords were caught off guard and are not happy with the situation. Unfortunately the word ‘abandonment’ would be an accurate term here.