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Don and Linda Eckles couldn’t get a bank loan, so they borrowed $40,000 from friends and family to open a coffee kiosk in Omaha.
The couple told Forbes they worked every shift for the first four months at the 650-square-foot location, a remodeled Chinese restaurant. Linda stamped a smiley face sticker on every coffee lid. After breaking even, they opened a second location. By the fifth store, they’d borrowed $150,000 to build two kiosks at a nearby mall, but construction costs nearly bankrupted them. They started franchising in 2001 at the request of friends and customers who wanted to open their own locations.
Fast forward 25 years: Scooter’s Coffee now has 912 locations across 32 states. Those franchises pulled in $859 million in sales last year. The franchise model is insanely profitable — nearly all costs are handled by franchisees, giving the Eckles’ holding company an estimated 62.5% net margin. Top franchisees post net income margins over 20%. Last year, someone offered to buy the entire company for $1 billion. The Eckles turned it down cold.