Coffee Shop Models

Hi Everyone

We are a coworking space located in Canada and are thinking about the idea of partnering with a local coffee house and having them set up a coffee shop in our space.

We were just wondering if anyone had any experience with that - how did you agree to rental terms with the shop (ie: did they pay you rent or did you split profits?) and also how did you get around the issue of free vs paid-for coffee? We currently provide great free coffee and we believe that we should continue to provide free coffee, but obviously this is a bit of a conflict of interest. We don't have any fancy coffees like espressos or cappuccinos, though, which the coffee partner could provide along with snacks etc.

Any insight would be appreciated!

~Erynn

···

--
--
Erynn Lyster
The Commons Calgary
a cowork apothecary

www.thecommonscalgary.com
(403) 399-1716 (cell) or (403) 452-7938 (office)

We (Workantile in Ann Arbor) tried this, but had to abandon it. There were several issues that made it difficult both for us and for the coffee shop:

  1. There was a lot of noise from the shop - coffee grinders, espresso machines, customer chatter, kids, etc.

  2. Coffee shop customers kept trooping through the coworking areas to use the restroom, tying it up and causing our members to wait in line.

  3. It was difficult figuring out how internet connectivity fees should be split between us and the shop.

All of these things can be worked out, but if you do this keep in mind that keeping the shop separate from the coworking area, having separate entrances for shop customers and coworkers, and separate restrooms, will make everyone happier.

···

On Tue, Apr 15, 2014 at 12:17 PM, Erynn Lyster [email protected] wrote:

Hi Everyone

We are a coworking space located in Canada and are thinking about the idea of partnering with a local coffee house and having them set up a coffee shop in our space.

We were just wondering if anyone had any experience with that - how did you agree to rental terms with the shop (ie: did they pay you rent or did you split profits?) and also how did you get around the issue of free vs paid-for coffee? We currently provide great free coffee and we believe that we should continue to provide free coffee, but obviously this is a bit of a conflict of interest. We don’t have any fancy coffees like espressos or cappuccinos, though, which the coffee partner could provide along with snacks etc.

Any insight would be appreciated!

~Erynn

Erynn Lyster

The Commons Calgary

a cowork apothecary

www.thecommonscalgary.com

(403) 399-1716 (cell) or (403) 452-7938 (office)

Visit this forum on the web at http://discuss.coworking.com

— You received this message because you are subscribed to the Google Groups “Coworking” group.

To unsubscribe from this group and stop receiving emails from it, send an email to [email protected].

For more options, visit https://groups.google.com/d/optout.


twb
member, Workantile
@twbrandt

Hi Erynn

I would suggest you reach out to the Coworking Canada google group as well, and definitely to the Centre for Social Innovation in Toronto about their profit sharing coffee shop model over at CSI Annex. They have the cafe on the main floor lounge (open to the public) and to prevent the 'free coffee' conflict, there is absolutely no coffee provided on the 2nd floor (directly upstairs from the cafe) but the free coffee starts flowing again on the 3rd floor of the building.
It's an interesting agreement to say the least.

At Foundery, because we own the building, we rented a neighbouring unit to Starbucks when we first opened this coworking location.
There is no entrance to the cafe through the coworking space, you must go out the front door and in the next door to reach the cafe.
This prevents the noise issues and also prevents the general public from entering the space uninvited.

We are now replacing the Starbucks with an independent cafe that is more in line with our community, but the function is the same.
The cafe is always a great meeting point and social spot for all of our members and there is great crossover with members from other floors in the building.
An external cafe is also a great place to find new members - they are usually sitting uncomfortably with their laptop trying to get some work done....
All we have to do is invite them next door and show them a better option!

We have always provided free coffee to our members, but had a simple agreement that we would not sell coffee in competition with Starbucks.
We are not in the coffee business anyway, so it's not problematic at all :wink:

Hope that helps,

Ashley

The Foundery Buildings
376 Bathurst Street
Toronto, ON
M5T 2S6

···

On Apr 15, 2014, at 12:17 PM, Erynn Lyster wrote:

Hi Everyone

We are a coworking space located in Canada and are thinking about the idea of partnering with a local coffee house and having them set up a coffee shop in our space.

We were just wondering if anyone had any experience with that - how did you agree to rental terms with the shop (ie: did they pay you rent or did you split profits?) and also how did you get around the issue of free vs paid-for coffee? We currently provide great free coffee and we believe that we should continue to provide free coffee, but obviously this is a bit of a conflict of interest. We don't have any fancy coffees like espressos or cappuccinos, though, which the coffee partner could provide along with snacks etc.

Any insight would be appreciated!

~Erynn

--
--
Erynn Lyster
The Commons Calgary
a cowork apothecary

www.thecommonscalgary.com
(403) 399-1716 (cell) or (403) 452-7938 (office)

--
Visit this forum on the web at http://discuss.coworking.com
--- You received this message because you are subscribed to the Google Groups "Coworking" group.
To unsubscribe from this group and stop receiving emails from it, send an email to [email protected].
For more options, visit https://groups.google.com/d/optout.

We have a coffee shop onsite here at Cruzioworks and it’s a fantastic value-add for our members. We planned for it when designing our space and the coffee shop has counter access from outside for non-members, and from inside for members. We worked out a revenue-sharing deal in lieu of rent, but in all other respect we treat the coffee shop as a regular member.

They sell coffee to our members at $1 per cup. Next door to them, in the break room, is a coffeepot that’s also in regular use. The members just choose between a really good cup of joe for a buck, or the free stuff. Depends on mood and current finances. They also offer a full range of espresso drinks, cold sodas, pastries, bagels, salads, etc. We wrestled with the free coffee dilemma, but it hasn’t really been an issue.

I can see that there are huge challenges in adding this to an existing space, or even incorporating it in a new space without total design control. Depending on location, it’ll be a challenge for the coffee shop owner too. It took a good 18 months before things started to click here but now we’re very, very happy with the setup, and so are our members.

James

James Hackett
Cruzioworks

831.459.6301 x280
[email protected]

···

On Apr 16, 2014, at 2:41 PM, Ashley Proctor [email protected] wrote:

Hi Erynn

I would suggest you reach out to the Coworking Canada google group as well, and definitely to the Centre for Social Innovation in Toronto about their profit sharing coffee shop model over at CSI Annex. They have the cafe on the main floor lounge (open to the public) and to prevent the ‘free coffee’ conflict, there is absolutely no coffee provided on the 2nd floor (directly upstairs from the cafe) but the free coffee starts flowing again on the 3rd floor of the building.
It’s an interesting agreement to say the least.

At Foundery, because we own the building, we rented a neighbouring unit to Starbucks when we first opened this coworking location.
There is no entrance to the cafe through the coworking space, you must go out the front door and in the next door to reach the cafe.
This prevents the noise issues and also prevents the general public from entering the space uninvited.

We are now replacing the Starbucks with an independent cafe that is more in line with our community, but the function is the same.
The cafe is always a great meeting point and social spot for all of our members and there is great crossover with members from other floors in the building.
An external cafe is also a great place to find new members - they are usually sitting uncomfortably with their laptop trying to get some work done…
All we have to do is invite them next door and show them a better option!

We have always provided free coffee to our members, but had a simple agreement that we would not sell coffee in competition with Starbucks.
We are not in the coffee business anyway, so it’s not problematic at all :wink:

Hope that helps,

Ashley

The Foundery Buildings
376 Bathurst Street
Toronto, ON
M5T 2S6

On Apr 15, 2014, at 12:17 PM, Erynn Lyster wrote:

Hi Everyone

We are a coworking space located in Canada and are thinking about the idea of partnering with a local coffee house and having them set up a coffee shop in our space.

We were just wondering if anyone had any experience with that - how did you agree to rental terms with the shop (ie: did they pay you rent or did you split profits?) and also how did you get around the issue of free vs paid-for coffee? We currently provide great free coffee and we believe that we should continue to provide free coffee, but obviously this is a bit of a conflict of interest. We don’t have any fancy coffees like espressos or cappuccinos, though, which the coffee partner could provide along with snacks etc.

Any insight would be appreciated!

~Erynn

Erynn Lyster
The Commons Calgary
a cowork apothecary

www.thecommonscalgary.com
(403) 399-1716 (cell) or (403) 452-7938 (office)


Visit this forum on the web at http://discuss.coworking.com
— You received this message because you are subscribed to the Google Groups “Coworking” group.
To unsubscribe from this group and stop receiving emails from it, send an email to [email protected].
For more options, visit https://groups.google.com/d/optout.


Visit this forum on the web at http://discuss.coworking.com

You received this message because you are subscribed to the Google Groups “Coworking” group.
To unsubscribe from this group and stop receiving emails from it, send an email to [email protected].
For more options, visit https://groups.google.com/d/optout.

Hey all

(thanks for the mention, Ashley).

In our model, we did a revenue-sharing agreement. For the initial year, we received 5% of gross monthly revenue in exchange for “free rent”. The revenue percentage has gone up a bit since then. This was a “win win” since it was a service to members and an easy way for these folks to open. (We selected the cafe operators as a result of a RFP process).

With respect to free coffee, we actually kept the free coffee right beside the cafe - the hunch was that people would pay for better and fancier coffees. And they did, though it’s possible that we’ve moved the free coffee to another floor, as Ashley mentioned (a lot has happened since i moved to NYC!). Certainly, the issue of free coffee was always contentious.

Another HUGE issue is that we actually wanted the cafe space to be member’s only. We have a fairly high number of members and so we wanted to sustain it alone, but of course, they wanted to grow their business. In the end, they have opened to a public audience though it’s not formally advertised. Their business is going gangbusters (now sandwiches, breakfast, but still struggling to get a liquor license) but it is causing some tension for us, as we still prefer the main floor to be a member’s only space.

Of course, a huge factor is how your space is configured. In our case, we have a ground floor that is entirely a hangout/event space, so the cafe worked well there. I can see how noise could be a greater concern if the cafe was woven into the main workspace (though, of course, plenty of people do work on the ground floor).

If you have more specific questions, send me a note off-list and I can put you in touch with one of our Ops team in Toronto.

best,

Eli Malinsky
Centre for Social Innovation
Toronto // New York City