Chocolate Covered Money by Brad Yater

Author:Brad Yater
Language: eng
Format: epub
Publisher: Post Hill Press
Published: 2024-06-28T17:08:08+00:00

Chapter 12

Don’t Confuse Me with the Facts

I am also an investor. While I was working at Godiva, I accumulated shares in a chain of twenty coffee stores called Kelly’s Coffee. Kelly’s was based in Century City. What I liked about Kelly’s was that every time I walked by, Kelly’s in Century City had a huge line.

Most people outside of Los Angeles have never heard of it. But Kelly’s was the originator of sweet frozen coffee drinks blended with ice and was way ahead of its time. Kelly’s was part of the “first wave” of the specialty coffee craze that started in California. National coffee brands that came along later had cold drink menus that were inspired by the idea of Kelly’s best-seller, chocolatey frozen blended mocha beverages that had not been discovered by mainstream America yet.

I was methodical about taking a business approach to growing Kelly’s to fifty stores and winding up gaining a seat on the Board. The experience provided my coffee background, which I intended to apply at Godiva but actually put to use later at Leonidas.

My hobby, for lack of a better term, had been for years to drive around to malls on weekends and talk to Kelly’s licensees. The idea of independently-owned retail shops operating as an affiliation outside a franchise model was fascinating to me. What I heard consistently in all my interviews with Kelly’s owners was that the stores made money. Most Kelly’s licensees wished they could own more stores! That was a good sign.

During my store visits I heard Kelly’s store owners’ life stories and began to understand the depths of the drama that takes place daily in major malls. Every mall has its own personality based on the neighborhood, the tenant mix, the customers, and most importantly the mall’s store employees. I was inspired by the woman who was deliriously happy that she had met her husband at the mall. Another woman was touched when her father bought her a Kelly’s store as a wedding present—the gift that keeps on giving.

The store in Cerritos was Kelly’s number one location based on top-line gross sales. It featured a full lunch menu. The operator baked fresh bread, roasted whole turkeys, sliced the turkey, and served it on the bread as sandwiches. I had never seen anything like it. Neither had the customers who lined up every day, attracted by the aroma while walking past. But none of that would have mattered had an owner not been working at the counter. The public likes to be taken care of by an owner. Licensing the stores to owner-operators ensured profitable management! Each store owner had to be able to take enough profit out of the store to live on.

Kelly’s licensees had free reign to develop new menu items such as the Cerritos lunch menu. The Cerritos owner’s sister decided to open a Kelly’s in Del Amo Mall. She gave me one profound lesson in retailing: don’t confuse customers with the facts. Marketing needs to give people an excuse to do what they want to do.

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