After being purchased by franchise giant Foodtastic, Canadian coffee institution Second Cup embarks on its second act
By Jordan Whitehouse
August 1975. NASA launches the Viking 1 planetary probe toward Mars. Bruce Springsteen releases Born to Run. And a small kiosk called Second Cup opens in Toronto’s Scarborough Town Centre.
It might not have seemed like a historic moment at the time, but looking back, Second Cup’s launch was certainly that. In those days, it was next to impossible to find a specialty Canadian café selling premium beans, let alone a Canadian franchise doing so. By the 1980s, however, Second Cup would change that, opening dozens of cafés, mostly within shopping malls and office towers. Today, with more than 190 locations from coast to coast, it remains the only large Canadian-owned coffee chain in the country.
A lot has changed since Second Cup got its start almost 50 years ago. A few highlights: in the 1990s, the franchise expanded into Quebec and added new offerings like espresso, blender drinks, and iced teas; in the 2000s, it pushed for environmental and fair-trade certifications for every one of its coffee blends; and in 2015, it began updating stores with a more upscale and modern look.
And yet, as significant as those changes were, Second Cup might be in its most momentous years right now. In 2021, the franchise was bought by Canadian franchisor powerhouse Foodtastic, which owns 22 brands, including Pita Pit, Milestones, and Shoeless Joe’s.
Foodtastic CEO Peter Mammas says that the size and scale of the company mean that it has the resources and know-how to grow Second Cup and improve its offerings. “It’s a great brand, and I think we can make it even better.”
A change would do you good
Foodtastic hasn’t wasted any time in trying to make improvements. Soon after the purchase, it focused on Second Cup’s liquids, which Mammas admits didn’t need a lot of help. When Foodtastic market tested Second Cup’s offerings, it found that the regular coffees usually ranked first or second compared to other big brands. Still, Foodtastic’s experts did make some slight improvements, he says. “We have a lot more resources than the company we purchased it from in the sense that we have more people in mixology, in liquid design, chefs that we could move over, [and] marketing people that could help.”
Next, as Foodtastic did its due diligence, it realized that the brand had been somewhat forgotten by Canadians. In response, it updated Second Cup’s branding to make it feel younger and more relevant. This included refocusing Second Cup’s social media strategy, buying billboards to get the name back out there, and partnering with different organizations to move the brand forward. Next year, this will likely also include helping franchisees secure the funds to update older stores.
Now the focus is on Second Cup’s food. “We’re right in the middle of that, trying to decide exactly what direction we’re going to go,” says Mammas. “But I think by the end of this year, our baked goods and sandwich offerings are going to improve dramatically. And I think that’s the last missing piece of the brand puzzle.”
None of this has been easy, especially during a worldwide pandemic, says Mammas. But the proof of success is in the numbers. When Foodtastic bought Second Cup in February 2021, the brand’s sales were down 60 per cent compared to 2019. By January 2023, Foodtastic had brought those sales numbers all the way back in line with the 2019 figures. It’s been a stunning comeback, especially given the number of still sparsely populated office towers, which is where many Second Cups are located.
Mammas says much of the praise should go to the marketing and operations teams, who have put a ton of work into targeting suburban areas and urban areas outside of regular working hours. The brand is also slowly getting younger and cooler, he says, which helps, too.
And then there’s Foodtastic’s focus on franchisees. “We truly believe that the most important person that we’re working for is the franchisee,” says Mammas. “So, we’re going to have to do whatever we can to help them.”
‘The sky is the limit’
Toronto franchisee Gemma Sidhu says she feels that support. She, her husband, and her dad have nine Second Cup locations altogether. “Even though it’s your own franchise, you need that support from the company,” says Gemma. “And we also have an advisory council that’s comprised of franchisees from every region in the country. So any opinions or issues or concerns that franchisees have are communicated through that. So our voices are heard, and it does feel like a collaboration.”
Sidhu became a Second Cup franchisee in 2010, after working as a dental hygienist. Her dad had been a franchisee since 2003, so she was familiar with the brand and the work involved. She wanted to join the family business because she loved Second Cup’s products and that it was a Canadian franchise, but also because it challenged her.
“One of the reasons I left my previous career is that it just wasn’t challenging me as a person,” she says. “At Second Cup, I’ve been able to develop and hone many different skill sets, like leadership skills and interpersonal skills. There’s a lot of room for growth, and the sky is the limit. It’s definitely not boring.”
Mammas says Foodtastic is looking for that type of passion in new Second Cup franchisees. And while any franchisee needs financial backing, he says that franchising with Second Cup is more cost-effective than other franchises. This is because Foodtastic has good relationships with a lot of banks and can therefore help provide more financing.
As for why a prospective franchisee might choose Second Cup, one of the biggest benefits is the size and scale of Foodtastic, says Mammas. This not only means that it can get better deals on supplies for franchisees, but that it has a deep reservoir of resources to lean on. Its mixologists’ work on Second Cup’s liquids is a good example. Now its chefs’ work on the food side is another. “With a single concept franchisor, they usually have one person working on this, but we have seven executive chefs,” says Mammas. “And so right now, as we’re about to launch our new sandwiches and baked goods, seven different people came up with ideas.”
Words of wisdom
Looking to the near future, Mammas says Foodtastic wants to scale Second Cup and make it a lot more visible. Over the next few years, there could be 50 per cent more locations in Canada than there are now. At the same time, Foodtastic will be serving Second Cup coffees in all of its other restaurants. After that, Mammas thinks the brand has the potential to expand internationally.
Sidhu wouldn’t say no to owning another location. It’s hard work, she says, but it’s worth it. Her biggest piece of advice for any new franchisee is to choose a brand that you’re passionate about. “It’s somewhere you’re going to spend a lot of time, so to have that passion there is definitely going to motivate you and keep you going,” she says. “It’s a big commitment, but the rewards are there. You just have to be dedicated to make it work.”
Mammas agrees that passion is key. He also says that it’s so important for new franchisees to make sure their goals are aligned with those at head office. “Some franchisors just want to close the deal and open the store and make the money,” he says. “We’re a little different in the sense that yes, we want to grow, we want our brands to be across the country, but we have to do it the right way. So we’re not going to force deals. We want to open stores that are going to be there 10 years from now.”
