When Skip Fay and Chris Eilers were looking for capital to open a franchised Dunn Brothers Coffee shop on 34th and Hennepin in 1994, they told investors the location was going to be smoke-free.
And in the early ‘90s, a non-smoking coffee shop in Minneapolis was an anomaly. Minnesota’s state law that prohibits lighting up inside took effect more than a decade later.
“One of the things we told them was we were going to have a coffee shop that had no smoking, which was novel at the time,” said Fay. “Some people thought we were nuts, and others thought it was an obvious thing to do.”
Turns out Fay and Eilers did alright, notwithstanding their ban on smokes.
The two went on to buy the franchise rights to Dunn Brothers in 1998 and worked together for 23 years. Fay is still with Dunn Brothers, while Eilers now focuses on Jinx Tea, his new business venture.
Fay and Eilers’ journey from franchisees to owners of a major, established brand inevitably took a tremendous amount of time, money and hard work. So how did they pull it off?
The pair says their success is due to a number of different factors, but both emphasized the importance of the people they worked with, their strong partnership and an ability to plan for the unexpected.
Two Heads Are Better Than One
Starting your own company, or successfully managing an established brand, isn’t for the faint of heart. Just around half of new businesses survive for longer than five years, and only a third of those startups live longer than a decade.
Add to the fact that Fay and Eilers had to compete with coffee behemoths like Starbucks and Caribou, and their story becomes more compelling. Now, granted, the two didn’t found Dunn Brothers – that’s thanks to brothers Ed and Dan Dunn – but Fay and Eilers maintained the brand’s success after buying the franchise rights in 1998 and the brand three years later.
That’s a big deal.
Franchisors are tasked with overseeing all of a company’s franchisees and handling brand logistics. This meant Eilers and Fay took care of everything from corporate organization to menu development.
Both said that having a business partner helped ease the growing pains that come with entrepreneurship.
“Partnerships can be difficult, it’s kind of like a marriage. And if you don’t have good lines of communication and mutual respect, I think it can be really difficult. But we had both of those,” said Eilers. “I’ve always been grateful to have that relationship for that part of my entrepreneurial life.”
Fay said the pair’s previous experience in the food and beverage industry was a big part of their success. It was also a way for them to assign each other duties based on their individual expertise.
“Chris had been working at a McDonald’s and gone through the management training. He was very operationally sound with running a business and that helped, knowing there are a thousand things you have to do every day,” said Fay. “We played off each other’s strengths and we were good at solving problems together.”
Invest in the Right People
It wasn’t only Fay and Eilers’ symbiotic relationship that helped make them successful. According to them, Dunn Brothers thrived because Fay and Eilers had the chance to work with competent, driven employees, all the way from corporate headquarters to baristas who opened and closed the coffee shops each day.
Fay said that it was important to be cognizant of personal limitations and hand certain tasks over to employees who had the necessary experience. Whereas some business owners might be adamant about controlling every aspect of their company, both Eilers and Fay made clear it’s important to put your trust in others.
“We invested in people, and I think that was a big part of what helped make us successful,” said Eilers. “I think we did a good job surrounding ourselves with people that had different skills than we had.”
One of those people was Robert Stephens, the founder of Best Buy’s Geek Squad.
In 1996, when Eilers and Fay opened up a Dunn Brothers location in Linden Hills, Stephens helped the two set up computer stations to allow internet access to patrons, a decision that put the coffee shop ahead of its time.
“We were early in providing internet access before WIFI,” said Eilers. “We can’t validate that we were the first, but we were certainly among the first. I don’t think anybody else in coffee shops was doing that when we did it.”
Be Prepared to Take Risks and Be Courageous
The success of Dunn Brothers certainly isn’t the norm, and it’s also not something that comes without risk. Eilers and Fay would tell you that entrepreneurship isn’t for everybody.
As Fay points out, customers expect a perfect blend of a number of moving parts to create a profitable customer experience, and it entails more than a good cup of coffee.
He says a savvy entrepreneur needs to understand the multi-faceted nature of any business.
“You’d want someone who understands that it’s a blend of a lot of things that make it work. It’s not just good coffee or food, or friendly staff or clean windows, or art on the wall,” said Fay. “It’s all that stuff every day, all the time.”
And the need to create that perfect mix can take a toll on anyone. Add to that the fact that coffee shop patrons do, indeed, want their light roast to be just as good as advertised, and you get a sense of what kind of pressure a business owner faces each day.
“Running a business can be lonely at times,” said Eilers. “There’s a lot of responsibility to your family, your employees, your customers and others that support you, like your bank.”
So, what’s a good reason to start your own business?
Owning a business means you get to “be accountable for yourself,” says Fay.
“And some days, the unfortunate part of that, is that you have to be accountable for yourself,” he laughs. “If you’re not ready for that, it’s not a good idea.”