Philly Deals: Swiss Farms owner acquires Saxbys Coffee chain

Five-cups-a-day coffee-drinker Paul Friel, the former Sunoco and Wawa executive who has run the Broomall-based Swiss Farms chain of drive-up dairy and convenience stores for the last three years, just picked up a second job: He's also the new CEO of the Saxbys Coffee shop chain.

Investor Robert E. Brown Jr.'s MVP Capital Partners, the Radnor firm that's owned Swiss Farms since 2003, paid previous owner Joseph Grasso less than $3 million in cash and debt payments for Philadelphia-based Saxbys, according to people familiar with the terms. The company announced the deal Monday after I reported it on Philly.com.

"There's great demand for high-end coffee," Friel, a former district manager for Sunoco's retail operations, told me. He'll compete with Starbucks — and Wawa? "We franchise. That [enables us to] better reflect neighborhoods than the big chains. We're part of the community we're serving."

Swiss Farms has a dozen stores in Delaware County and a new one in Charlotte, N.C., under its first-ever franchisee, Mike Lang. A second will be opened by ex-Fox 29 weatherman Frank Cariello in Raleigh, N.C., this fall.

Saxbys has about two dozen locations in the Philadelphia, Dallas, Cincinnati, Atlanta, and Las Vegas areas, down about one-third from its peak in the late 2000s. Grasso bought Saxbys in 2008 from founder Nick Bayer, who remains with the company. Back then, Grasso sketched bold expansion plans; he blamed the difficulty of raising capital after the 2008 financial crunch for having to consolidate instead of grow. After a 2009 bankruptcy reorganization, "we had to close some stores."

Grasso remains the owner of Coffee Shops International, of Conshohocken, which roasts beans for Saxbys and about 1,000 supermarket locations, along with the Bucks County Coffee Co. brand, a Saxbys predecessor.

MVP founder Brown worked for the old Penn Central railroad and law firm Morgan, Lewis & Bockius before going into the buyout business in 1983. MVP also owns the Destination Maternity chain and two dozen other retail, technology, and services firms.

Good for business

Royal Bank of Scotland, owner of Citizens Bank, sees Pennsylvania as one market. So Daniel K. Fitzpatrick, the Father Judge, La Salle, and Drexel grad who's worked for every big bank in town, and as Citizens' Pennsylvania chief for the last five years, has offices in both Philadelphia and Pittsburgh. And as incoming chairman of the Greater Philadelphia Chamber of Commerce, he plans to work more closely with the Steel City's comparable group, the Allegheny Conference.

Think of that: Instead of the usual intra-Pennsylvania struggle for hometown candidates and local subsidies, you could have big-city business bosses — Eagles and Steelers box-seat holders — fighting on the same side.

"There's not one business agenda and another civic agenda; it is one agenda," that ought to benefit everyone, since what's good for employers is good for workers and their families, says Fitzpatrick. He'll take the gavel in October, succeeding Liberty Property Trust chief Bill Hankowsky, an owner of The Inquirer.

Locally, that agenda is broad and familiar: the 5,000-company chamber's leaders talk about improving Philadelphia's underperforming schools; they press for rule, fee, and tax relief.

Unlike some self-appointed business advocates, big-city chambers like Philadelphia's aren't antigovernment. They have long collaborated with city officials on land-use policy; the Philadelphia Industrial Development Corp. is a joint city-Chamber deal-financing venture. A key word, for Fitzpatrick, is balance: "The chamber takes a very balanced view of tax policy that's favorable to job creation in the region."

If business owners trend Republican, Philadelphia trends Democratic, and the chamber is nonpartisan: "There's good energy, collectively, on both sides of the aisle." Key Philadelphia industries like hospitals and colleges rely on taxpayer aid; so, as Fitzpatrick says, "the chamber takes a view the government needs to make targeted investments in key industries like life science."

What about those public schools, facing high dropout rates, state budget cuts, shutdowns, and layoffs? Fitzpatrick says his chamber colleagues support business-management principles applied to education: the public-school academies, charter schools, mentorship, "21st century" tech ed, "accountability" for administrators, and focusing spending "close to the students in the classroom," a refrain of the current state-appointed school board and its chair, Pedro Ramos. "We're getting there," he says.

Contact columnist Joseph N. DiStefano at 215-854-5194, JoeD@phillynews.com, or @PhillyJoeD on Twitter.