As Caribou Coffee’s first chief franchise officer, Matthew Walls felt it was important to meet the teams that ran the cafes “in their own element” and start building good relationships. He spent a week traveling in Bosnia, Egypt and Turkey while getting to know the leaders of Caribou Coffee multi-unit owner, One Franchising, that just opened a new location in Izmir, Turkey.
Matthew Walls joined Caribou Coffee as its first chief franchise officer after spending 15 years at Domino’s and most recently at CKE Restaurants.
While there, Walls got to participate in the franchisee group’s Barista Championship in Turkey, where 17 contestants presented unique signature drinks to a panel of 10 judges including Walls, Caribou CEO John Butcher, leaders from One Franchising’s Turkey operations and two local influencers.
“That just shows that regardless of what country you’re in or what language you speak, the same passion for creating great coffee drinks transcends all that,” reflected Walls, who joined Caribou in July after leading global development at CKE Restaurants for a year. Prior to that, Walls spent 15 years at Domino’s in various roles, most recently as global senior vice president.
Caribou has about 460 stores in the U.S., 322 of which are owned by the franchisor, and the rest are owned by franchisees in non-traditional locations, which Walls said the coffeehouse chain will continue to expand in. Globally, Caribou has nearly 275 franchise stores in nine countries.
Walls noted the company was in a “unique position with the pending IPO of Panera Brands” that was put on hold. This follows the move in 2021 by Caribou’s parent JAB Holding Co. to combine Panera Bread, Caribou Coffee and Einstein Bros. Bagels under new umbrella company, Panera Brands.
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“Having been in pizza for the last 15 years, coffee is a new thing for me, so being able to ask coffee-specific questions in the industry made onboarding easier,” Walls said, noting his appreciation for being able to run ideas past peers from other Panera Brands’ concepts.
As a Midwest brand based in Minnesota, Caribou’s franchise expansion plan involves “radiating out from centers of influence” in order to optimize supply chains and franchisee talent, Walls said.
The coffee chain did not release any number goals of how many franchise stores it hopes to open, but it’s targeting multi-unit restaurant operators who are interested in opening at least 10 coffeehouses throughout the Midwest and Southeast. Similarly, Caribou will use its strong presence in the Middle East as a hub to expand into Northern Africa and beyond.
“As the brand matures, I’m sure we’ll bring on more franchisees internationally as well,” Walls added.
Caribou CEO John Butcher previously told Franchise Times the brand is “focusing on the quality of the partnerships and finding the right franchise partners who have sophisticated background in multi-unit operations as well as share our core values and vision.” Caribou plans to keep developing corporate stores alongside franchise expansion.
Pioneering a new role at a not-so-new brand
Walls could not see any disadvantages to being the first to hold his title of chief franchise officer at Caribou. Instead, he sees a growth story about to unfold.
“Caribou is not an emerging brand. It’s been around 30 years, and people love Caribou,” he said. “We know how to operate it profitably, which is a huge advantage over any company that may try to franchise out of the gate. We already have that knowledge”—including his own wisdom gained from prior experiences.
At CKE, Walls learned how to invigorate a more mature brand by leading a revitalization effort, which included implementing remodels, new tech and a customer service initiative. While at Domino’s, Walls learned how “to speak like a franchisee.”
“I have a deep affinity for small business owners. That’s really what gives me my power,” he said. “Keeping the franchisees very healthy reciprocates that health back to us.”
Walls will take his lesson learned from moving too quickly at previous brands to Caribou, where he plans to “go a little slower in order to go fast, and take a little more time to calculate steps. I think it’s smart for us to make sure we’re building deep relationships with our franchisees, and that we understand what their capacity for growth is so we go at a pace that’s comfortable for all of us.”
He also noted Caribou’s strong brand recognition that can be attributed partly to its nontraditional growth as well as sales through K-cups and whole bean coffee at grocery stores and online.
“We already have the seeds of growth out in the market.”
From a franchisee perspective, flexibility to choose from different models will help attract new owners, especially those who want an optimized drive-thru and pick-up-only model.
After adding the additional title of CEO in January 2019, Butcher spearheaded Caribou’s rollout of the Caribou “Cabin” prototype, a drive-thru-only model with a significantly smaller footprint ranging from 550 to 600 square feet, versus the traditional “Chalet” full coffeehouse model that’s 1,600 to 1,800 square feet.
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“We’ve been operating this way for 30 years, and we’re able to provide the right training and sophistication so franchisees can operate successfully,” Walls added. “All those pieces together is a great love story and an amazing journey for this brand as we take something people love in the Northern Midwest and take it to people all over.”
Including franchisee fees, the total franchise investment for a “Cabin” Coffeehouse ranges from $446,100 to $732,300, while a “Chalet” model costs $722,100 to $1.15 million, according to Caribou’s FDD. Meanwhile, a non-traditional “Kiosk” version is $249,100 to $606,300.