John Davidson, the CEO of 7 Brew Coffee Co. of Fayetteville, offered a television analogy to describe what he sees as the appeal of his fast-growing chain.
“I’m an ’80s kid. Everybody knows who Norm was at ‘Cheers.’ And the truth is, everybody wants to be Norm, not necessarily sit in a bar, but everybody wants people to know their name, right? Everybody wants to feel like they have a home.
“And you know what’s impossible to have? You cannot be Norm unless you’ve got Sam sitting on the other side talking to you.”
That, apparently, makes the staff at the drive-through coffee stores Sam (or maybe Coach or Woody), the understanding server who will do what it takes to get your order right and make you feel comfortable. After all, 7 Brew’s motto is “cultivating kindness,” which the chain’s representatives emphasize in interviews.
That’s not to say that 7 Brew hasn’t honed a singular, scalable model, one that has allowed the brand to explode. The chain had 54 locations in 13 states as of late last month, and plans to have 200 to 250 by the end of the year, according to Drew Ritger, COO and director of franchising. Sixteen of those 7 Brew stands are corporate-owned.
“We’re really focused on being a franchisor,” Davidson said in an interview last month with Arkansas Business. “We’re closing in on 3,000 units sold. I think we’ll get there this year for sure.” He said the company now has 650 employees.
The best-known coffee chain in the world, Starbucks, which opened its first location in Seattle in 1971, has more than 15,000 locations in the United States and more than 35,000 worldwide.
But coffee drinks are a big market. Sales by branded coffee shops in the United States reached $45.8 billion in June 2022, according to Project Café 2023, a publication by World Coffee Portal.
7 Brew’s business model is different from that of Starbucks and other branded coffee chains like Dunkin’ Donuts. The 500-SF stands have no interior sit-down space, focusing almost exclusively — walk-ups are accommodated — on drive-through business with their double drive-through lanes.
7 Brew employees called “texters” walk up to drivers to take their orders, much like the service at Chick-fil-A drive-throughs. Speed is of the essence. “We’re probably best in class in drive-through speed,” Ritger said.
But 7 Brew officials said the service is not just about speed. The texters are helping customers “build a relationship one on one with us,” Ritger said. “We’re really in the business of positive experiences. We want you to have a moment in your day where you can build a custom drink any way you want it, whether you want it to be all healthy, no fat, no sugar, or you want to really indulge. That’s really your choice.”
7 Brew’s drinks include the Blondie, a caramel and vanilla breve, and the Brunette, hazelnut and caramel mocha, as well as lattes and cappuccinos, but iced coffees are the specialties. In addition, the stands offer various teas, smoothies, shakes and energy drinks. The only food available are muffin tops. All the emphasis is on the drinks.
The buildings themselves are standardized, with about 90% of them modular, prefabricated structures, Ritger said. “We have a number of companies across the U.S. that are building these and providing them for our franchisees.”
Brew Crew LLC of Fayetteville, a 7 Brew franchisee, last month installed a stand at 8023 Cantrell Road in Little Rock. Two tractor-trailers hauled the building, in sections, to the site, where a crane dropped the sections into place. Plans are for that location to open late this month or in early March.
This standardization contributes to 7 Brew’s ability to scale up the enterprise quickly.
Brew Crew, which is also responsible for the 7 Brew at 11921 Maumelle Blvd. in North Little Rock and the stand at the former Shorty Small’s restaurant at 11100 N. Rodney Parham Road in Little Rock, has rights to open 7 Brew Coffee stands in Arkansas, Missouri, northern Louisiana and part of east Texas, said Brandon Sebald, CEO of Brew Crew.
“We want to do upwards of 90 to 100 stores,” he said. In Missouri, Brew Crew plans about 50 7 Brew locations; five Brew Crew stores are currently open in that state. “It’s everything except for Kansas City and Branson,” for which another developer is responsible, Sebald said.
“In Arkansas, we have pretty much everything except for what corporate has,” he said. “They’re out of northwest Arkansas, so they have Washington and Benton County up here.” In addition, Conway and Russellville are corporate locations, and the Jonesboro market is a different franchisee. “We’ve got Fort Smith and central Arkansas and down,” Sebald said.
Brew Crew’s plan is to open one stand every month. Each of the Brew Crew 7 Brew stands employs 50 to 60 workers, Sebald said. “It’s a lot more than people think.”
In Little Rock-North Little Rock, Brew Crew also plans stores for the site of the last TCBY location in Little Rock, at 11418 W. Markham St., and at 4900 John F. Kennedy Blvd., the site of a former Regions Bank branch (and across from a Starbucks). Both are set to open this summer.
Sebald is a franchise business veteran, having been involved in a Planet Fitness franchise group for more than a decade. He left that group after reaching a deal to sell its 92 locations in six states. His partner in Brew Crew, Larry Wilson, has participated in food and beverage businesses for more than two decades, Sebald said.
“When I was exiting Planet [Fitness] and we were looking for a new model to pursue, coffee was one of the items on the list,” he said. “Being from northwest Arkansas, I’ve seen 7 Brew over the years. I’ve been a customer,” Sebald said. “The coffee space was very appealing to me.”
What sold him on the 7 Brew franchise were “the culture and the atmosphere,” he said. “I’ve never seen anything like it.”
7 Brew was co-founded by Ron Crume, an Oregon native who opened his first location in Rogers in 2017. “We want to be a national chain,” Crume told the Arkansas Democrat-Gazette in 2017. “And we want our home to be here in Northwest Arkansas.” Crume told the newspaper that the smaller size of his drive-through stores meant that he could place them in prime areas where a larger development might not be feasible.
A group of entrepreneurs bought the company in January 2020, Davidson said. The CEO, who described himself as “a serial entrepreneur,” said that though he now lives in Wyoming, he had lived for a long time in Fayetteville. Ritger said Crume remains a shareholder but is not involved in the operation of the company.
“How did we sell 3,000 units?” Davidson asked. “It’s because we partnered with, I’d say, page one, tier one franchisees in the country that when they see something great, they recognize it too.” He cited as an example K-Mac Enterprises Inc. of Fayetteville, one of the largest Taco Bell franchisees in the United States. “They’re one of our most valued partners,” he said.
Davidson also touted the recent hiring as CFO of Nicole Miller Regan, a former managing director of Piper Sandler, an investment bank based in Minneapolis.
“The focus has been to really turn it into a nationwide brand and a world-class-type retail brand, and we’re making really good progress,” Ritger said of 7 Brew.
Sebald, the franchisee, said he’s committed to the brand. “We’re all in on 7 Brew and growing this coffee revolution here.”
As for competition, Sebald said, “We’re not afraid.”