Detroit Free Press, MSN: Jeff Stoltman weighs in on franchise versus corporate-owned models
There are two shots of espresso in a grande Carmel Marvel, the sugary and best-selling drink for East Lansing-based coffee house chain Biggby Coffee. That isn't nearly enough caffeine for Biggby's co-CEO Mike McFall, who started as a barista at the business's first location in the mid-1990s, long before it grew to be a top regional competitor to coffee giants Starbucks, Dunkin' and Tim Hortons. “We believe the magic behind Biggby is that Biggby is for everybody," McFall said in the Free Press interview. “Many of the other coffee brands, the specialty coffee brands, they’re fairly pretentious brands. And we work as well in Coldwater, Michigan and Alpena, Michigan as we do in Birmingham or Grosse Pointe.” Jeffrey Stoltman, a professor of marketing at Wayne State University's Mike Ilitch School of Business, said that franchising is a good way for companies to expand quickly without needing a lot of capital. It also ensures that the people in charge of new locations have strong incentives to work hard and achieve success. The trade-off is that companies have less control over operations at franchise locations than in corporate-owned ones. The desire for control is why some brands with "high-touch models," such as Starbucks, prefer to own their locations, Stoltman said.