Under Funded Community Organization Becomes Coffee Entrepreneur, Paves Way for Non-Profits Nationwide to "Self Fund"

Unique licensing opportunity from Moxie Java International - low start up costs, no Franchise fees or exclusive buying contracts, with local flexibility and extensive company support - helps fund the Washoe Arc, while integrating the developmentally disabled into the work community.

"Not long ago, no programs for Americans with mental retardation existed out of the school system and virtually none within it," said Dr. Brian Lahren, Executive Director of the Washoe Arc, a Reno, Nevada-based support group for individuals with mental retardation. "Families kept children with mental retardation at home with no services, and while other families' kids grew up and became self-supporting, they had life-long care responsibilities. Even as adults, many of their children had difficulty dressing, cooking, shopping, using transportation, and relating to others appropriately. Social isolation, financial hardship, along with a lack of productive outlets wore down both Americans with mental retardation and their families."

The Washoe Arc has been seeking to fully integrate those with mental retardation into its community since the 1950s. But like other non-profit groups that depend on both state and federal funding, the Washoe Arc ran into financial shortages that threatened the viability and quality of its services.

"Nevada, with no income tax, has an independent western philosophy that says you're supposed to take care of yourself," continues Lahren, who chairs the governor's task force on long-term disability planning in the state. "In part, that has helped us to be more entre-preneurial - but Nevada also makes the lowest per capita investment in disability services of any state in the nation. Becoming entrepreneurial was the only way we could survive and offer quality programs."

The Search for Revenue
Over the years, the Washoe Arc opened several for-profit thrift shops in the community, as well as a Pier 1 retail franchise, to supplement its funding. The profits from these operations helped support its numerous service and rehabilitative programs. But Lahren was looking for a recession-proof business, with low start up costs, no franchise fees, local flexibility, and extensive company support.

Lahren knew he was on to something when his mother in Boise, Idaho, a lifelong coffee drinker, insisted he visit a Moxie Java coffee shop. "It was the best cup of coffee I'd tasted, really gourmet," says Lahren. "I noticed the shop was thriving and fit the character of the neighborhood. Coffee was an affordable luxury people were buying despite the down economy. Even Starbucks hadn't made headway against Moxie, despite its marketing clout. This was a business I needed to look into."

Boise, Idaho-based Moxie Java International, the largest licenser of coffee shops in the United States, extended Lahren the unique licensing opportunity it offers other entrepreneurs wishing to enter the high-margin business of selling fresh-brewed specialty coffees. By avoiding complicated and costly Franchising contracts, Moxie Java's program allows prospective entrepreneurs to own their own espresso cart, kiosk, or cafe with minimal investment.

Operating a coffeehouse taps into a lucrative, fun Business Opportunity trend. According to the Specialty Coffee Association, this market (which encompasses unblended, blended, dark roast, organically grown, flavored and decaffeinated coffees) is growing at double-digit rates. Espresso cafes average over $300,000 in sales per year.

The fact that a great cup of coffee is viewed as an up-scale, yet affordable luxury accounts for part of this success in the face of a slowing economy. Other factors include an extremely broad demographic appeal; a wide variety of choices ranging from lattes to cappuccinos; and unlimited channels of opportunity that include malls, shopping and convention centers, industrial parks, office buildings, recreational facilities, college campuses, hospitals, Fast Food outlets, bookstores, and gas stations.

Moxie Java, founded in 1988, now has 70 coffee shops in the United States and three in Japan. It has quickly established itself as one of the fastest growing specialty coffee retail vendors - fueled by its quality coffee products and innovative licensing arrangement, featuring low start up costs, no franchise fees or exclusive buying contracts, with local flexibility and extensive company support.

Lahren explains Moxie Java's entrepreneurial benefits. "We got tremendous support from Moxie when we opened the store. They helped us do everything we needed to ensure we were up and running on opening day. With the license, we opened our 1,200 sq. ft. cafe for a very reasonable $170,000 - at least $80,000 less than start up costs elsewhere.

"There are no monthly royalties to pay, which can total thousands of dollars quarterly at a franchise's typical 8 percent of gross profit," continues Lahren. "And we're not locked into costly buying contracts with hefty markups the way Franchises are. We buy the key ingredients we need from Moxie and purchase the rest at low market rates, which saves an additional $1,000 a month."

Moxie Java achieves product differentiation by selecting the highest-grade Arabica beans and then carefully roasting them in-house to achieve the maximum flavor. Every store gets fitted with high-quality espresso machines from Italy. Unlike other major chains that utilize automated systems, each cup of Moxie Java coffee is ground, pressed, and brewed to order - resulting in a fresher presentation of the coffee.

By obtaining a Moxie Java license, a prospective proprietor receives the rights to use the Moxie Java trademark, logo, and to sell its products. Besides its own coffees, Moxie Java also supplies all necessary espresso machines, grinders, chairs, tables, a variety of supplies - providing licensees with the convenience of one-stop shopping to equip their stores for success.

"Moxie provided us with outstanding training as they're very concerned about quality control," says Lahren. "They trained key staff for four intensive days on every type of drink. We learned how to taste and understand the complexity of different coffee blends, and ensure quality control - as a good cup of coffee, at bottom, is what keeps customers coming back."

"For example, we'll never serve a shot that takes too little or too much time to brew," continues Lahren. "If you brew it too fast you get tasteless coffee, too long and you get bitter coffee. Every half-hour we ensure the shots are brewed in the correct time range, and when there's a shift change there's a ramp-up process that ensures we've got the tamp and grind right."

Besides ensuring consistent quality of product, Moxie Java International takes equal pains to ensure the success of its licensees. Each store operator receives the benefit of a complete support package that includes: turn-key store packages, training programs, operations manuals, marketing support, design consultation, promotional support, new product and merchandise development, toll free purchasing, and continuing education. Brand support includes national promotional programs, frequent customer incentives, and branded merchandise such as T-shirts, multiple-design traveler mugs, ceramic logo mugs, gift boxes, and a variety of clothing.

Moxie Java offers three separate, turnkey packages of products, equipment and merchandise to fit the specific financial commitment level of any entrepreneurial individual wishing to enter the world of retail specialty coffee. A Moxie Java Espresso Cart represents the most flexible and mobile of all systems, as it allows an operator to locate wherever the most customers are.

The Moxie Java Kiosk is a modular, self-contained espresso system that utilizes a flexible three-sided counter, built-in back wall and merchandise display wall to accommodate unusual and tight space requirements. The Moxie Java cafe reflects the atmosphere of a European coffee house, complete with counter displays, tables and unique setting decor.

A Coffee Retailing, Community Success is Born
Moxie Java's brand license agreement also gives the Washoe Arc more flexibility to serve the needs of their community than restrictive franchise agreements. For example, instead of the standard green wallboard look of another leading chain, the Washoe Arc's Reno location sports a Southwest motif and displays the artwork of local artists for sale. The store advertises Washoe Arc events and cross-markets products for the group's Pier 1 retail outlet and thrift stores, a sales practice prohibited by most franchise agreements.

In addition to the growing income the Washoe Arc's Moxie Java café earns, it also contributes directly to its mission by integrating the developmentally disabled into the work community. A number of adults with mental retardation have worked side-by-side with their coworkers bussing tables, cleaning up, and on occasion making specific drinks.

"In a work setting, when we place an individual with mental retardation alongside well-trained staff, he or she models appropriate behavior to a degree not possible in a workshop setting," says Lahren. Subtle social cues such as greetings and proper distance are learned, along with service. Alice, for example, learned that if customers are reading, it's not necessary to engage them in conversation just 'to be nice.'"

With the Moxie Java café generating revenue in addition to its existing Pier 1 retail outlet and thrift stores, the Washoe Arc is now over 90 percent self-funding, a rarity in the non-profit world. And the Washoe Arc-Moxie Java venture is earning kudos from the community. The Reno Gazette-Journal gave the venture its Small Business Award for Innovation, and nearly gave it awards for Community Outreach and Customer Service as well, in the second quarter of 2000. Recently, a major retail developer has invited the Washoe Arc to open another café at a riverfront property in Reno due to its success - both financially and in community service.

"The Moxie Java café has worked out so well for us that I recommend it to other non-profits wholeheartedly," sums up Lahren, who is now looking into opening additional locations, and perhaps licensing coffee carts or kiosks. "If you do your business plan, Moxie Java won't let you down either in product or corporate support. The coffee business is wonderful to be in, and done right will help fund non-profit groups virtually forever."