Baristas Coffee Company, Inc. (BCCI)

[BobSinCA]

There are only two stores which are not wholly owned.

Those are the two Cape Coral stores which are owned by a Joint Venture partner, Baristas Coffee Company Florida LLC.

Two of the three principals in this LLC are Barry Henthorn and Troy Steciw, both officers of BCCI. The third is Mark Davis Schaftlein of Delray Beach.

This LLC is 51% owned by BCCI, and 49% by South Florida Coffee Company, which is basically funded by Capital Consulting, CEO Mark Davis Schaftlein (who can be further googled, both personally and for corporate affiliation).

Hard to argue this as a 'franchise' if it is more than 50% owned by BCCI. Having said that, it is positive that an external investor has apparently put funding into the company.

The good news is, in January BCCI announced that this LLC would open a third store 'early in the second quarter,' so an opening is hopefully imminent. Failure to have an opening this quarter might signal disappointing results after the fall advertising campaign was ended in the Cape Coral area.

Note that the BCCI franchise structure per the Prime Equity Research report included a 1% fee for marketing, or about $1500/yr for marketing (using $12K/mo/store, about what they have been averaging), a sum that was significantly exceeded for the openings of these stores. Not an unreasonable decision for a new geography, but the question becomes whether the stores can maintain sales momentum without expensive marketing. The company has a history of closing stores. San Antonio (2) and Phoenix area (2) stores opened, then closed. One of the purchased MT stores was closed.

However, as the PR is still on the BCCI website (unlike the October 1 PR announcing the Media Funding advertising arrangement), investors should be able to assume that the store opening will occur.