Canadian man scoops up Coffee News franchise
Photo/Courtesy Jim Black
Jim Black of St. John's, Newfoundland, is the new owner of the Greater Portland Coffee News franchise
Coffee News, the quirky little newsletter that's read over a steaming cup of coffee or while waiting for a Cobb salad at the diner, has a new, ambitious franchise owner in Portland.
Jim Black, a 37-year-old Exeter, N.H., native who now lives in St. John's, Newfoundland, recently bought the Greater Portland franchise, which also includes South Portland, Cape Elizabeth and Scarborough, as well as Saco and Biddeford. He bought the territory from its previous owner, Jeff Ball, for an undisclosed price. Since buying his first franchise in Portsmouth in 2008, Black has also expanded into southern Maine, in Kennebunk, Wells, Ogunquit, York, Kittery and Sanford.
Black explains that his foray south of Canada came about after his mother, Sue Valiquet of Hampton, N.H., was laid off from her job in 2008. He decided to launch a franchise in the Seacoast area to help her out, and she now handles the company's finances and billing. He also runs a franchise in St. John's.
Black says he likes running his Coffee News ventures because he can focus on sales. "I don't have to design ads," he says. "The content is all written by creative writers and artists. They print the paper, they have the [printing] facility -- and that allows me to focus on being part of the community and being the Coffee News guy, helping businesses to grow their business."
Coffee News is a free sheet distributed to diners, coffee shops, restaurants, motels, truck stops and other spots. The latte-colored newsletter is filled with odd news, horoscopes, trivia and other tidbits, and bordered by local ads. A franchise owner's job is to sell the 32 ads per newsletter and find places to set up newspaper stands.
In Portland, where a Coffee News has been distributed for the past 14 years, about 135 establishments receive the newsletter. "Our plan is to try to grow as far as more locations, which helps advertisers and helps with visibility," says Black, who bought the franchise in September. The city newsletter comes out in five editions covering five regions, allowing advertisers to stay within very local boundaries. "People tend to shop within four miles of where they read Coffee News, and we try to gain advertisers in those areas," Black says.
Although occasionally a larger company, such as FairPoint, might advertise with him, Black says, "[Coffee News] appeals to the small and medium business that is locally owned, like professional services, like an eye-care place to a fitness center, all the way down to somebody selling Avon."
The company is a worldwide enterprise owned by Bill Buckley, who grew up on a potato farm in Aroostook County and runs the business from his Bangor office. In 2008, Buckley bought Coffee News USA's Canadian-based parent company. With annual revenues of around $3.5 million, the company has 1,118 franchises in 22 countries, including Portugal, Spain, Venezuela and New Zealand. In Maine, Buckley says seven people own 23 franchises, which are essentially territories of between 40,000 and 50,000 residents. He adds that there are lots of Maine territories up for grabs: "Westbrook, Gorham, Falmouth, Cumberland, Yarmouth, Bath, Brunswick, Lincoln County, Knox County, Washington County, Hancock County - the whole coastal area is available from Portland north," he says.
Black declined to reveal his investment or revenues, but Buckley explains that the rights to a new Coffee News franchise cost $8,000, and a second franchise is discounted to $5,500. Owners, however, are also able to turn around and sell their franchise for more if they've built up value. Buckley, for instance, sold his four Bangor editions for $125,000 in 2003 after buying them for $2,000 in 1995, he says.
Franchise owners pay $80 in weekly fees to the company for their first franchise, and $25 in weekly fees for subsequent franchises they might buy. They have to invest in newsletter stands and any business tools they want, as well as pay for printing costs, which run between 6 cents and 8 cents a page. All together, royalty, printing and delivery costs run around $300 a week, Buckley estimates.
Franchise owners can make around $20,000 in sales a year, or $30,000 if they're effective salespeople, according to Buckley. But only 8% to 10% of applicants are awarded franchisee rights, he says, because the company has to weed out people who might not be successful, such as recently graduated college students who are poking around for a job, or more experienced workers who don't want to quit their full-time job. Owning a franchise requires a full-time commitment, Buckley insists.
Forbes in 2009 included Coffee News in its list of the top 20 franchises to start, saying, "Coffee News still believes in advertising-supported print media." Coffee News came in 18th.
Black, who frequently travels back and forth from Maine to Newfoundland, says he wants to become better acquainted with the business community in Portland.
"I am a fresh face," he says. "My challenge is gaining the trust of the business community in these markets."
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