Saxbys blends community designed franchises with national branding

When Nick Bayer, now 37, went to college, he had no idea what he wanted to do. Business, industry, finance - each internship served to eliminate those as possibilities.

"I remember Sunday nights were the most depressing nights for my family, because my parents had to go to jobs they didn't really like," Bayer said. "I didn't want to have a depressing Sunday night every week.

"I wanted to love what I did. It dawned on me that the only way to really do that was to create something for myself."

The something Bayer created is Saxbys Coffee (hold the apostrophe), a 28-cafe chain that he bankrolled by running up $150,000 on his American Express card.

Next month, Bayer will start another new something - opening a student-run Saxbys at Drexel University in cooperation with the Close School of Entrepreneurship.

The cafe will serve as a living laboratory for teaching business concepts and the cafe manager will be a co-op student. Bayer says this collaborative venture is the first of its kind nationally.

Question: What's your thinking?

Answer: Our universities are teaching entrepreneurship so well - how to write business plans, how to find partners, how to raise money - but there's a huge component you just can't teach, which is putting your hands on the business.

Q: When you graduated from Cornell, you knew you wanted to be an entrepreneur, yet you had no money, no ideas, no training.

A: I made a decision to go into consulting. I couldn't teach anybody how to run their business. But I knew that I'd be able to learn business on someone else's dime.

Q: Why coffee?

A: I didn't really go to coffee shops; I went to plenty of bars. So, when I was introduced to a coffee shop, I was blown away - people on dates, people having business meetings, the baristas laughing. I thought, this is amazing. It's such a human experience. It was that ah-ha moment for me.

Q: What happened next?

A: I probably wasn't a very good [consultant] for the next two weeks because I literally devoured the coffee industry. I went into 50-plus Starbucks. They are one of the most successful retail companies. You would think that nobody could compete with them, but you would walk out of a Starbucks and across the street would be Jane's Coffee Shop.

Q: And?

A: I'd go in and Jane's Coffee Shop was hyper-local. It felt more like the neighborhood. I was attracted to the business because of the hospitality. I felt I could create sort of a hybrid of those two businesses - invest in the brand, the standards, and the vendor networks, but locally design every cafe and partner with franchisees that knew those individual communities.

Q: You grew up in Chicago and started Saxbys in Atlanta. How did you end up in Philadelphia?

A: I got lucky that my first investor was based here. He said, 'Nick, I know real estate. Real estate is important to your business. You should move here so I can teach you real estate.'

Q: It's interesting that lattes outsell regular coffee.

A: Today, you can go into most gas stations and get pretty good coffee. It has been good for our industry. It has moved everybody's palate up. People demand a better product.

Q: You place a lot of emphasis on clean bathrooms.

A: It was my mom and my wife talking about how important a clean bathroom is. We serve more females than males, so I think it's a good business decision to keep females happy.

Title: Founder, chief executive officer.

Home: Center City.

Family: Wife, Hally; son, Luke, 15 months.

Daily coffee: Iced Americano, four shots of espresso over ice.

Diploma: Cornell, government, economics.

College baseball: As a pitcher, "I became focused on not letting my team down and giving them every chance to win. I'm that same way now."

Pro tip: When you meet someone and get a business card, jot a few personal facts on the back of the card and enter the info into your contacts that evening. Send a brief e-mail to acknowledge the meeting. Refer to notes before meeting again. EndText

Where: Center City, moving from Broomall.

Founded: 2005.

Coffee served daily: 8,000 cups.

Most ordered: Lattes.

Cafes: 28; 12 in the region. Mixed corporate, franchise ownership.

Revenue: $10 million in 2014, $15 million projected in 2015.

Employees: 400, 200 locally.

In 2015: 10 new cafes, including at least two in Philadelphia area.

Nick Bayer on debt, a lawsuit, and running out of cash. www.philly.com/jobbing

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jvonbergen@phillynews.com

215-854-2769

@JaneVonBergen