Starbucks' Seattle's Best recruiting US franchisees
LOS ANGELES |
LOS ANGELES Feb 3 (Reuters) - Starbucks Corp's (SBUX.O) Seattle's Best Coffee chain said on Tuesday it is recruiting U.S. franchisees in a move aimed at helping the two brands grab a bigger share of the domestic specialty coffee segment.
Starbucks, which is closing roughly 1,000 stores around the world as it fights to revive U.S. growth, bought Seattle's Best in 2003 and the smaller brand now has more than 550 cafes across the United States.
Seattle's Best Coffee is known for its smoother, milder blends and flavored coffees, which executives said sell at prices that are in line with rivals ranging from Starbucks to McDonald's Corp (MCD.N).
"The world of premium coffee has expanded, and customers now expect a great cup of coffee wherever they are," said Tom Ehlers, vice president and general manager of Seattle's Best. "The different products and the different flavor profile we bring really compliments what Starbucks has out there."
Ehlers expects new franchisee-owned cafes to expand the specialty coffee market rather than to steal customers from Starbucks, which last week said it would close another 300 stores around the world on top of the nearly 700 global closures announced last year. Some 800 Starbucks stores slated for closure are located in the United States.
"We're not doing this with the mind that this will bring down the Starbucks business, rather we think we'll help grow the entire industry," he said.
Seattle's Best first will focus on attracting franchisees from western states and from Texas, where the economy is a bit more resilient and Seattle's Best already has some "great prospects," said Marie Gill, director of franchise business development at Seattle's Best.
"We'll certainly go east if the opportunity is correct," Ehlers said.
Approved franchisees must have bank financing in hand before they can choose from a variety of cafe sizes and types, which include everything from kiosks and carts to cafes with full food and beverage menus.
A dozen franchisees already operate 36 Seattle's Best cafes, which are located in places like a mall in Portland, Oregon, a Las Vegas casino and the Atlanta airport.
Still, the vast majority of Seattle's Best cafes are located in stores run by licensees such as bookseller Borders Group Inc BGP.N and Supervalu Inc (SVU.N) grocery chain Albertsons.
Starbucks does not break out results for Seattle's Best and executives declined to give growth targets. (Reporting by Lisa Baertlein; editing by Carol Bishopric)
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