(Fort Walton Beach, Fla.)— When Cuppy’s Coffee & More, Inc., was formed in 2006, it hoped to capitalize on Americans’ never-ending thirst for specialty coffee. Cuppy’s Coffee & More and its new associates, however, never expected to dodge obstacles intended for another company. Cuppy’s Coffee & More awards franchises to its franchisees who purchase either a double drive-up building, an in-line coffee caf� or a “tow-behind your automobile” mobile unit from Cuppy’s approved vendor, Elite Manufacturing, LLC. Elite Manufacturing is a wholly-owned subsidiary of Medina Enterprises Inc.
Medina Enterprises purchased equipment, telephones and assumed the leases from another company that licenses coffee businesses. Adding to the public confusion, Cuppy’s Coffee leased offices in the same business complex and some of the employees from the former coffee business were offered positions and are now employed at Cuppy’s Coffee. That’s how Cuppy’s problems began. Although the other coffee company, Java Jo’z, still exists as a licensing company, the owners of Java Jo’z have no financial, operational or legal association with Cuppy’s Coffee, Elite Manufacturing or Medina. The legal relationship separating the businesses is clearly defined, but some individuals who have had disputes with Java Jo’z didn’t readily understand the distinction.
“They would say we’re at the same location, we have the same phone number and we have a similar looking logo, so therefore we must be the same company,” said Doug Hibbing, president of Cuppy’s. “But that’s simply not the case. Whenever I talk to a CPA or an attorney and provide documentation, that CPA or attorney clearly realizes that we are two separate unrelated entities. This confusion even lead to the IRS initially thinking that we were the same business. Fortunately for us, even that initial perception was corrected by the IRS’s review of our documentation. Hibbing and Robert Morgan (owner of Medina Enterprises, Inc.) believed that if the business model was operated as a franchise, the core ideas behind Java Jo’z would surpass all expectations. When the previous ownership decided to sell its assets, the two set out to build a viable, well-managed business with Hibbing at the helm of Cuppy’s and Morgan at Elite Manufacturing. Even though Cuppy’s Coffee has no legal liability to the previous licensees of Java Jo’z, Hibbing and Morgan have worked to accommodate their concerns. They have arranged a no-cost conversion option to former Java Jo’z licensees. In addition, Hibbing has offered a personal invitation and complimentary accommodations to licensees who want to visit the corporate headquarters in Fort Walton Beach, Fla. to see and learn first-hand the opportunities at Cuppy’s Coffee. Hibbing candidly admits he should have performed better due diligence. But there is a calm and determined demeanor that emanates from his voice and one can sense it isn’t the first time his determination has proved to be one of his strongest traits. “With the incredible staff that we have supporting our franchisees, I have no doubt that we can overcome any obstacles. We’re doing that everyday.” Hibbing said.
Hibbing’s openness seems to mesh naturally with one of his primary goals with Cuppy’s Coffee: Build a business with a reputation for integrity. “Despite inheriting the misdirected criticisms, the affable Hibbing hasn’t let it affect his enthusiasm for Cuppy’s Coffee. Cuppy’s has opened 11 new locations since last May, has 70 stores in development and another 114 franchisees with leases or letters of intent. “I saw an opportunity that was phenomenal in the QSR (quick service restaurant) specialty coffee industry,” Hibbing said. “It’s one of the fastest-growing segments of the coffee industry. I wanted to step in and take a share of that market.”
