For The Coffee Bean & Tea Leaf™, entering the Canadian market isn’t as simple as crossing the border—it’s all about finding the perfect partners to bring their quality products to Canuck consumers
by Kym Wolfe
We Canadians love our coffee, and almost half of us also drink tea on a daily basis. Seeing a vibrant coffee and tea culture with untapped potential, The Coffee Bean & Tea Leaf™ has decided to bring its premium beverage brand to Canada through franchising.
As a leading global roaster and retailer, The Coffee Bean & Tea Leaf offers an extensive selection of specialty coffee and tea blends from around the world. From its early days in Southern California, the company has expanded to more than 20 countries over the past 60 years and today has over 1,100 locations in the U.S., Asia, and the Middle East. Now it has set its sights on being Canada’s go-to for premium tea and coffee, as well as pastries and other small bites.
“The opportunity to expand into Canada is exciting,” says Sanjiv Razdan, the company’s president of the Americas and India. Razdan notes that The Coffee Bean & Tea Leaf doesn’t use a cookie-cutter approach in all new territories but works to understand cultural nuances and customizes each location to best serve its local market. What doesn’t change, regardless of the location, is the company’s commitment to serving the highest quality coffee and tea, sourced directly from growers around the globe.
Big brand, small footprint
With an integrated supply chain and worldwide distribution capabilities, the company owns the process from field to cup. The Coffee Bean & Tea Leaf travels to small farms, worker-owned co-operatives, and family-owned estates to source its coffee beans and tea leaves. For its coffee, The Coffee Bean & Tea Leaf says it buys from the top one per cent of the world’s Arabica beans, roasting in small batches to produce its carefully crafted flavour categories.
The Coffee Bean & Tea Leaf cafés are typically 800- to 1,800-square-foot cafés, ranging in building type from end caps with high visibility and access to drive-thru-only formats. Non-traditional cafés range from shopping mall, to airport, casino, grocery, or university campus locations. These café footprints are highly scalable. It’s interesting to note that even a 200-square-foot kiosk tailored for high rise office buildings can serve 80 per cent of The Coffee Bean & Tea Leaf menu.
The ideal size and type of each unit is decided based on the local market, says Prabs Moodley, head of business development for the Americas. “We have in-house expertise to study the markets as we try to understand local movement and the areas where people live, work, and shop. From cafés to drive-thrus to kiosks to malls, there is tremendous flexibility to be present where consumers are.” And while the company has global designs that franchisees can leverage, there is also flexibility within the design framework, she adds. This allows each and every location to provide a memorable customer experience that respects cultural nuances.
Looking westward
The company plans to break into the Canadian market initially in Alberta, focusing primarily on Edmonton and Calgary for the first few years, and then expand east. “We want to enter Canada in a respectful way,” says Moodley. “And we need a franchisee with a deep understanding of the Canadian consumer landscape to work with us.”
To that end, The Coffee Bean & Tea Leaf is looking to partner with a Canadian franchisee investor—either an individual or a group with a lead partner—with the capacity to open multiple locations in Alberta fairly quickly. Ideally, it will be someone who is familiar with the brand, likely through travel or because they’re newcomers who enjoyed The Coffee Bean & Tea Leaf in their home country. “We are looking for a like-minded partner who is passionate about our brand, with experience in the food services industry, who has the necessary capital and market knowledge to build operational capacity,” says Razdan.
The Coffee Bean & Tea Leaf aims to work with franchisees with a proven track record of successful multi-unit food and beverage development and operations. While the franchisee isn’t expected to be on-site managing the daily operations, they’re expected to be hands-on in terms of working with The Coffee Bean & Tea Leaf team to customize each unit and build a strong presence in Alberta.
In an ideal world, that will result in an investment of approximately $50 million over the first five years, with a minimum of 10 locations opening in the first two to three years. “Having 10 cafés in high-visibility locations will quickly build greater brand awareness,” says Moodley. “And once you hit approximately 10, certain economies of scale in supply chain, operational management, and marketing are possible.”
Setting cross-country goals
Building on Alberta’s success, The Coffee Bean & Tea Leaf plans to expand to other provinces, working with new multi-unit franchise owners and offering them the flexibility to make adaptations that will cater to local tastes and preferences in each market. Single-unit franchises may be available, but only for smaller, non-traditional formats like in-store kiosks and cafés located in airports, university campuses, and hospitals. The brand’s goal is to open 100 cafés in total across Canada by 2029.
The company has a successful business model and infrastructure that has been honed over six decades, offering extensive training and support to all new franchise partners. There’s a real estate and development team to assist with store design, site specifications, and construction. New franchisees in the Americas, along with their managers, travel to a corporate stores and training centre in Los Angeles for a deep dive into all aspects of the business. The company’s training team then travels to the new franchise location two weeks before its opening to train staff on-site and stays for the first week following launch to ensure a smooth start.
The Coffee Bean & Tea Leaf team includes a corporate operations director and a dedicated franchise business consultant who support day-to-day operations; a product development team that creates exclusive and proprietary recipes for beverages, pastries, and café meals; and a marketing team that provides resources and guidance to increase brand visibility and help maintain the integrity of The Coffee Bean & Tea Leaf name, while continuing to expand and strengthen the brand around the world. Once the company identifies the ideal franchisee, it helps its new owner build the business, aligning with its strategic international expansion goals.
Just as importantly, the franchise wants to ensure that any potential new owner has thoroughly researched The Coffee Bean & Tea Leaf, understands the brand, and has assessed that it’s the right fit for them.
“In our cafés, we bring together global flavours and stories, sparking curiosity about our world with every cup,” says franchise sales manager Dominic Bruno. “Above all, we love growing with franchisees who are committed to excellence and can’t wait to share our coffee and tea with the world!”