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Downtown Manhattan is a great place with thousands of people walking buy.

Downtown Poughkeepsie is not so active.

Clearly you are in business to make money and money is a function of price times volume.  Volume is a function of unit sales per transaction and customer count.  Customer count.

Be careful in downtowns and make sure you are comfortable that  there is a present and future.  At all costs do not get caught up in the enthusiastic presentation of the Downtown Economic Coordinator.  They only see the future and have no idea who Alvin Toffler is.  He, for those intrepid soles of yesteryear, is the person who said:

"The Future is Now".  And don't you forget it.  If money is only a little bit important to you, make sure you are comfortable with the customer counts you will generate in downtown.

Clearly, I am not talking about LA, or San Fran, or Minneapolis, or Miami.  I am talking about the rest of American Cities where downtowns are sometimes the heart of the City, strong, pulsating and boisterous, but can also be quiet and a dream.

Page TopFree Standing

I love a free standing building that you own, located on the inbound commuting side of a heavily trafficked highway in a local community with a lunch and dinner menu.  Well, maybe not dinner, since the day can get really long.

Free Standing means it a building on its own lot with its own parking and means of entrance and exit.
Easy entrance easy exit.  Not on a curve thank you.  Not on a 75 mile an hour highway

Page TopMalls & Strip Centers

Malls bring traffic and the sales that go with traffic.  Malls dictate your hours, and anchors come and go (Bradlees, K Mart) so the traffic varies.  Some have food stores (this helps because food shoppers buy beans when the buy food).  I have seen the sales ranking of several major franchise operations and the sales in a mall vary all over the lot (see sales), so you are still the captain of the ship and must make something happen.

Strategy to get a Mall Site

If you are set on going into a mall here is how a local person can do it.

First, I took a season site.  I signed a lease on November 4th and opened November 14th in a temporary storefront.  I did sales of $55,000 for the five weeks through Christmas and decided to stay.  I signed a three month lease with an automatic renewal clause for the temporary site and immediately expanded the inventory and added over 100 coffees.  I did well.

After seeing the operation for a year or so the Mall offered other malls as expansion opportunities.  So I became an acceptable tenant to the mall.  If you want to be in malls, this strategy works.
Start with a seasonal site in the mall.  Move to a more permanent but short term lease.  They exist.  You could get moved around at the malls discretion but you will be in and they are not willy nilly about it.
You could start with a C Mall but the strategy works for all malls where there are vacancies.  But if there are vacancies, you must find out why.

Then take a permanent site in the mall.


For a permanent site be prepared for at least $250,000 depending upon the size of the space.  The size of the investment determines the minimum amount of profits you must earn just to get your money out.  If your minimum annual profits is $50,000 and profits are 15% of sales then you must have sales of $350,000 ($50,000/15% = $350,000~, when ~ means about).

Here is a rotten example.  I was looking at mall stores and a well know national franchiser offered me a site in the Cherry Hill Mall in New Jersey.  It was a corner, center court location doing a Million Dollars in sales per year.  The cost was only $100,000 but the catch was a remaining term on the lease of only 1 year.  They said no problem because it would be renewed.  The store was making a $100,000 per year.  I turned it down cold.   Here is why.

Cash out to get it: $100,000.  Cash in for the year $100,000.  No return for risk or anything else.   The franchiser said the renewal would be worth it.  I knew better because I had a pipeline to other coffee franchisers who were signing a lease for a coffee bar in the same mall.  

Now, if you are signing a seven year lease and have to spend $250,000 to outfit the store, how much profit do you want over the seven years?  I would want at least $500,000 to return the original investment first, and then a return for risk and reward.  But everyone is different.  I never look at my salary or lack thereof, as a return on investment.  No matter what I do, I will be paid for my time, so my salary is a cost of doing business, not a return on investment.  Profits provide the return of capital and return on capital. 

In order to get the $500,000 returned in 7 years you will need to earn $72,000 per year, after taxes.  At 15% of sales this means you need sales of $480,000 and pretax profits of $100,000 or so.

For temporary sites, be they Kiosks or store fronts, the costs are much lower and you may be able to live with the decor and limit your investment to equipment.


Your Christmas sales will be 25% of your total sales for the year.  Be prepared for long lines of people who NEED your coffee.

Sales levels  is the magic question.  And it depends - location, size mall and so on.  But I will venture a list, at some risk.  This is so variable it is dangerous and don't depend on this list.  Use it as a quick guide, you do your own forecasts and homework.

  • A Mall center court - $1,000,000
  • B Mall in line but close to Center Court - $400M to $750M.  Much depends upon the inventory you carry.
  • C Mall will be anywhere from $150,000 to $400,000.  I was in a C Mall and had a range of sales of $275,000 to $350,000 

Locations In Malls

Center Court - best of all,  this is the center of mall.  Everyone goes by every time they visit.  Employees of other stores can get there more easily.

Next to Anchors - limited, I would not do this.

In line - ok for drinks, gifts, small appliances and a few tables.  It is very good if there are natural sitting places in the hallway and the mall is not crowded with kids who the mall security people keep moving along.  You want the husbands waiting for the wives sitting on the planters type situation.  Of course they are drinking you great coffee.

The closer to the center court the better.  I know of a South Jersey Coffee Company - Ireland Coffee - who went into several malls and lost a fortune because they took sites way down the end of long halls.  They don't work.  You want to be in the action and convenient for employees of the other stores and mall walkers to get to.

End Cap of a food court - good site because you have seating and visibility.  Food court makes it tough to sell beans and gifts.  Somehow the smell of grease just is not conducive to buying a $200 basket, or a $20 basket for that matter.  So make this one a drink bar with sweets or bagels.  If you can't get food, think really hard about this and make sure there is lots and lots of traffic.

Food Court


A Malls

A Malls - really big, probably have 2 or more coffee stores, and your sales will be in the $750M or higher range.  It depends upon how many coffee outlets.  There will be many.  Department Stores, appliance stores (Kitchen Connection), Beanery, Barney's, YOUR DREAM, and you may have restrictions on what you can sell (you will have restrictions on what you can sell), to name a few, but you will also have lots of credit card carrying customers savoring your aroma's.

Anchors.  Why is it that many things about coffee are related to seafaring?  But here not anchors, anchor stores.  Really big chains.  Neiman, Lord and Taylor, and Macy's to name a very short list.  Millions of square feet, twenty Gaps, thirty shoe stores, twenty Chinese food stands, and a really, really big food court.   
High rent, high shared expenses - common area charges (pays for the HVAC of the halls for example and cleaning the parking area).  Neiman Marcus, Macy's, you know, bigger names. 

High rents don't equate to success.  You have to work hard.  It is not unusual for the employees of a store around the corner in the mall to never know that you exist.  People in malls have routes and passages.  You have to break the routes and make them aware of your presence to be successful.  You and to get to the employees of the other stores and a way to do this is to sample.  Fill a cart with your favorite drinks and go around and give them out with a big smile.  See Sampling, and come back here.

B Malls

B Malls - slightly smaller than A malls.  Some anchors (department stores) from the A list and may have a few C lists but then it is a 4 or 5 anchor mall.  Square footage could be 1.5 Million or more.

Your coffee store sales will be $400M to $750M depending on type of operation, location and you.

C Malls

C Malls - a couple of department stores but not a Macys, more likely a Boscov's, Bradlees (now gone - tell you something?) or Sears.  Probably only 3 anchors.  Sales? I was in a C mall and had some years with sales over $300M but none over $400M.  The way I got in to a mall was take a temporary store and then expand to a permanent site.  No problem.  You can do this with minimal investment and pretty good traffic.

Strip Centers

Strip Malls, Power Strips, local strip centers.  These are very location sensitive and dangerous.  Some work, many don't - they have high turnover.  Only you can decide.

The major advantage of a strip center is higher visibility from the street and ease of bringing customers to your store.  I think advertising works better in strip centers because you don't have the barrier of the large mall.


Doing business in a mall is no easy task, franchise or independent.  You are dealing with people who are big business and your success of failure is not particularly important to them.  They don't care if your cookies are the best in the world.  If they have given an exclusive to the Cookie Monster down the hall, you will not be allowed to sell your cookies.

Exclusives given to others means you do not have control over your menu.

Common area charges are the costs of hallways, snow plowing, air conditioning the offices and other "common" areas.  Typically you pay a per square foot charge based upon the ratio of your space to the total space in the mall.  Watch out and duck.

High rents are normal but you get the crowds in successful malls.  It is nice to be very busy and malls supply Friday Nights, Saturday Afternoon and Sunday Afternoon crowds.  The rest of the time you can sleep.

Leases.  Seven years is pretty common because the malls want variety and change to keep consumers coming back.  This is fine until your lease is up.  Then what?  If you are a franchise and the franchiser holds the lease (normal) then you may be out of business, especially if your franchise agreement expires when the lease does (normal).  So you have to kiss and schmooze the franchiser and landlord.  If this is ok with you, no problem.  If you are independent and make waves, be very careful.

Malls open at 9:30 AM.  Coffee is a morning business so you give up the morning business.  This is an access issue not only in the morning but in general.  Yes, malls bring traffic in general, but that very traffic can be a barrier to independent consumers who don't like crowds.  This is a toss up.

Karate Kid.  I was in a mall where the mall had a show and one of the participants was an actor dressed as a frog.  The actor knew karate.  Someone made a not so funny remark to the frog and the frog kicked the kid.  Big problem.  People stayed away for a long time and the mall became known as a dangerous place.  This is not uncommon. 

Kids.  I love my grandkids and my children (now over 30) but crowds of kids in malls are a problem today.  Depends on the location but be careful.  Stand in that mall hallway for weeks and bring a counter.  See if the traffic is circle walking and see if they are carrying bags.  If mom's are dropping kids off to get rid of them, there is a problem in the mall. 

Captive audiences are wonderful.  But you are a captive provider.  This means your audience is pretty much limited to the malls audience.  It is expensive to bring local people to the mall specifically to see your store. 

Competition.  Malls rent space and take a percentage of sales.  They want tenants and exclusives can be here today and gone tomorrow.  Department stores will add and subtract lines and can do so without worrying about getting thrown out of a default in the lease.  Department store can kill you.  I sold Otagiri Teapots which were pretty good at the time.  My Otagiri Santa Teapot retailed for $45.  Bradlees brings in a Santa Teapot for $10 and discounts it by 40%.  We won in the end because Bradlees went out of business, but my Otagiri Santa Teapot sat for a long time.


As much as we hate to acknowledge it, theft is a common problem.  Shop lifting is common.  Staff theft is common.  I once sat outside of Center Court coffee store and watch a person who had let their coworker go out for a smoke shovel beans into a shopping bag and hand it off to a friend.  I am not kidding.  I also had a stereo system in the center of my mall store as a prize in a contest.  I went into the back room, came out and a few minutes latter realized it was gone.  I made whipped cream freshly and maintain the NO2 necessary to do so.  At one point a whole case disappeared from the back room and the staff laughed all the way home.  Just be prepared and vigilant.


Buy some good comfortable shoes (you will need them anyway), a hand counter/clicker, and a big smile and a cup of coffee for mall security.  Find a nice perch in the mall and start looking and counting.  Observe the people, their character, their ethnicity, their packages (if any), their ages, and most important the number going by the site you have in mind.

Do this for everyday of the week.  And do it for a couple of weeks.  Be sure you love it and can live with the crowds and types of people.  You will be a captive in the mall and have little effect on the character and quantity of customers, so make sure you are satisfied.

Ask for the sales of the last tenants, not only coffee, but muffins, bagels, and books.  Get a feel for the sales and be sure you can live with it.

Then decide.

Page TopPromotions in a Mall

Malls require promotion just like any other site.  Traffic is present but you must bring it in to the store and you must build awareness in the neighborhood (the other mall stores) about your presence.

Having a inline store also makes it easier to have a cart on the other side of the mall.  In the Cumberland Mall in Vineland, NJ the Auntie Ann's has an in line store at one end of the hall and a kiosk at the other end, both are just outside anchor entrances.  In this case they get traffic from the anchors and awareness at both ends of the mall.

It is not unusual for consumers to pick a favorite store in the mall and never venture beyond it.  It is their Right of Passage, the right to go where they want to go.  This may not be where you want them to go, so you have to find a way to get them to come to your site.  Or, like Auntie Ann's, bring your site to them.


See also Clubs and come back here,  Clubs in malls are the same as other places but the method of giving them out changes.  I would regularly go around to the other stores and hand out the club cards to build awareness and break the Right of Passage.


This is a great place to sample.  Put a person at the entrance to your store and give stuff away.  There are always issues with malls as to how you can do this, but if you stay within the bounds set you can.  See Sampling on how to sample.  There is a good method and I urge you to use it.


Coupons, gift certificates, surprise discounts are a few ideas.  Do what the big department stores do.  Handout at the register, handout at the door, handout in the parking lots if the mall will let you.  Make them on your computer and if you are not sure how to do that then it is a good thing to learn.


If you can do this, do it at Thanksgiving for your Christmas promotion.  One time a year or you will be in trouble.  Have the boy scouts do it for you and pay them with donations of great coffee.

Public Relations Events

Become a speaker.  Kiwanis, Rotary, Zonta, Ladies Clubs, Men's Clubs, Schools and Colleges, especially Colleges with culinary programs are looking for outside speakers.  It isn't easy, but it isn't hard either.  If you can't do it, find a friend who can help out.

Concerts and symphony groups love to have coffee at the break.  Supply it along with cards on your store.  Art galleries, new artist shows, and libraries all need good coffee.  Supply it and give out your cards.  The idea is to generate traffic for the store, and to minimize your cost of the event you may charge for the coffee.

Tasting and Shows

You are in the entertainment business.  We did tastings and shows in both the mall and our cafe.  Once you get an agenda (see House Parties Checklist) you will become expert and people will see you as the expert.  Set up a Podium and taste away.

Shows are full blown presentations on coffee: origin, history, sources, brew methods, roasting colors, taste, decaf methods and whatever else you want to add, and there is plenty.  Just go to the David's Book on Coffee and Tea and use the contents page as an outline for your talk.

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