Port City Java, founded in Wilmington, North Carolina in 1995 is known for their strong coffee, and now they’ve made a strong comeback as well. In the 90s, they started expanding throughout the Wilmington market with just corporate locations and started franchising in 2003 with 100 agreements signed at the peak.
According to Sarah Meriam, Director of Franchise Operations, in their initial execution of franchising, they made a few common mistakes which halted their growth temporarily. Using these mistakes as learning opportunities, the brand was able to recognize the crucial gaps in their system and made the decision to take a step back and restructure. Around 2007, they put a pause on traditional franchising so that they could refocus and reboot the system.
Port City Java franchising officially relaunched in summer of 2018 and the company started getting back into traditional franchise growth. With 12 corporate and 15 franchise stores they are choosing the right franchisees and being more data-driven than they were before. We sat down with Sarah to learn what changed and how she sees the future.
What would you say is the biggest thing that you’re doing differently as you’ve reemerged?
Sarah: “We’re really focusing on the type of operator that we want in our system and being able to support our brand partners effectively. To do this, we are not reemerging with the goal of becoming a national brand but instead committing to controlled, regional growth for now.
“From my point of view, as an operations person, that’s one of the biggest mistakes that we made initially. We had no way of supporting a store in California from here. Making sure that we’re not growing beyond our means and truly supporting the franchises is key.”
What sets Port City Java apart from the competition?
Sarah: “Competition for us is many different forms from the big-name brands to local coffee shops to convenience stores. To stand out, we focus on product quality and guest experience. During our initial onboarding and training of employees at any level in the company, we make the distinction between ‘service’ and ‘hospitality’ a primary message. Service, as we say, can be transactional but hospitality is going above and beyond and truly creating an experience for the guest. Ideally, this keeps them coming back.
“On the product side of things, we have an in-house roasting operation at our corporate headquarters in Wilmington and with our team’s hands-on approach, we take a lot of pride in delivering the highest quality coffee to our guests and café operators. At the café level, we are constantly evaluating our operations and training so that all staff members uphold the same level of quality throughout.”
When did you implement FranchiseBlast, and what was the reason?
Sarah: “We started in 2017 and our primary reason was for the auditing software. Before then, we were on the pen-and-paper audits that were ineffective. We had no efficient way of collating and assessing results for one unit, let alone our entire system.
“When we were first introduced to the FranchiseBlast tool, the timing was perfect because we were behind on the technology aspect of things. Getting upgraded to this kind of software was a primary focus of mine to make significant improvements to our auditing process. With the technology in hand, we can be vastly more efficient with our units before, during and after completing café audits.
“The auto-generated report is sent to operators and management staff immediately upon approval, but we also include a follow-up email, based on a template our Franchise Business Consultants (FBCs) have created, to highlight key areas of opportunity as well as positives. We build in as much redundancy as possible. FBCs are trained to take as many notes and pictures as possible during the audit, which is another big advantage.
“Even if the operator is not in the store during the audit, they know exactly what we’re talking about without needing a full explanation or time-consuming follow-up about what needs to be corrected or improved.”
What would you say the biggest strength is of FranchiseBlast?
Sarah: “Definitely the software’s ease of use and support team behind the scenes. Everything is straightforward, simple and effective for our use of it. If there are ever any questions that arise or anything that we might need further coaching or explanation on, we go to the support team. Everyone is incredibly responsive and helpful, and the team is always willing to take feedback.”
In your day-to-day, what feature helps you the most as you manage your FBCs?
Sarah: “Being able to look at the audit reports from multiple viewpoints has definitely been the most beneficial aspect. We organize our system into various categories within the software so that we can isolate reports in the most effective way. I can view reports from the system as a whole, franchise versus corporate, drive thru versus non-drive thru, or even broken down by FBC territory, just to name a few.
“Having the ability to see audit results from all of these angles helps to assess issues that may be happening across the board versus metrics in specific locations. It gives our team perspective when adjusting action plans or coaching the FBC and helping them come up with a plan to correct that behavior or issue. It also gives us the ability to look at and use historical data from previous audits reports to better document ongoing or repeat issues that may require escalation.
“Being able to categorize and review all of audit reports helps us isolate the root cause of the issues. We can assess ‘Is this a specific café problem? Is this a problem for all drive thru or University cafes? Is this a system-wide issue?’ Answering these questions with concrete data determines the necessary action that we, as the franchisor, might need to take whether it be coaching one operator or a broader change to training/educational resources. Being able to have some flexibility with the different types of reports that we can pull and assessing that data from a lot of different angles is invaluable.”
What’s the overall impact of FranchiseBlast on Port City Java?
Sarah: “One of the obvious impacts has definitely been improving our unit compliance. For example, we’ve seen almond milk utensil and pitcher handling jump from 38% compliance in 2017 to 98% compliance in 2019. We fortunately never had any allergy reports, but without FranchiseBlast in place, we would not have had the data to show the gaps in training to ensure everyone staff were always following proper protocol .
“That said, I also feel like we’ve been able to show our operators the value of audits as a coaching tool to help them, and ourselves, make improvements instead of just focusing on a compliance score. We’re very transparent about how we use these results to score ourselves as the franchisor. This is not only in the audits that are completed in our corporate stores but around system-wide weaknesses which reflect gaps and opportunities for improvement in our training initiatives.
“Aside from raising compliance scores with the almond milk procedures we first noticed, we can look at two additional metrics from our system as great examples of how we have used the collected data to improve our training initiatives: espresso quality and suggestive selling. Within the first few months of adopting the FranchiseBlast software, we noticed that the majority of our cafes were consistently scoring very low in espresso quality.
“With our coffee quality being of the utmost importance to us as a brand, we used the information gathered from the audits to assess where we had gaps in our training materials that would result in quality issues. We were able to add to and improve those materials to ensure cafes had the best tools and resources to maintain the standards we want to achieve. Since then, we have seen consistent improvements in scores and, even more importantly, the quality of products being produced.
“These areas of opportunity tied nicely into our overall goals for 2017. In preparation for relaunching the franchise, we wanted to ensure our brand was differentiated in terms of hospitality and product quality, but more specifically we wanted to improve the unit-level economics of our cafés. FranchiseBlast highlighted that we had an area of opportunity around increase average check sizes via suggestive selling. We decided to address this opportunity first, as it appeared like lower hanging fruit than increasing customer counts.
“As a result, in the second quarter of 2017, our FBCs focused on the topic of suggestive selling during their conversations with franchisees and store managers while our training department built supporting materials. Around the third quarter of 2017, we started making these training materials widely available for consumption. We promoted them even further in 2018 and still today in 2019.
“We are always looking for opportunities to make improvements but by including assessments of suggestive selling in our two primary audits and providing cafes with further training and feedback, we had a nice impact on our average check size.
“That first quarter, when we ramped up with the software, we saw the average check size increase by an average of 2.3%. The second quarter showed an average increase of 3.52% over 2016 while third and fourth quarters accelerated the upwards trend with 5.16% and 5.96% increases respectively. Although not shown here, we saw continued increases throughout 2018 until the unfortunate events of Hurricane Florence impacted our area cafes. We’ve now recovered and are growing strongly once again.
“Obviously, there are numerous factors at play and while we’re not claiming FranchiseBlast is solely responsible for our continued improvements with these metrics, the timing lines up with our brand’s desire to make more data-driven decisions and conscientiously work towards advancing our system overall.
“From my perspective as a coach, it’s great that our efforts are reflected in the results, but I don’t want to be stuck looking at numbers on a spreadsheet all day! The data helps us make more informed decisions about our processes and priorities, but it is still up to our frontline staff to get it done. Having these tools available improves the level of support we are able to offer to build their confidence as operators and show them how what they do on a daily basis adds up!”
What advice would you give to someone trying to do your job?
Sarah: “I always advise people that the two biggest lessons I learned after getting into franchising were: always celebrate the small victories and recognize the value of answering the question, ‘why?’ before it even gets asked. Having grown up with the PCJ brand in Corporate Operations, I came to our Franchise Department with an unrealistic ideal of what it was going to be like working with franchisees.
“I took for granted the fact that I was now working with business owners, not just other managers, and I had to justify every decision that was being made and answer as many questions as I could think of before they were asked. As a department, our mantra is, “front load everything.” While it was frustrating at first, I quickly learned there is tremendous value in doing this. By answering the ‘why,’ and offering that level of transparency, we continue to build trust with our franchisees. “