Moxie Java hits a turning point as several shops hang new signs

The story below was originally published April 27, 2013, under the headline “The local chain hits a turning point as several shops hang new signs.”

Drive anywhere in the Treasure Valley, and you'll probably pass a coffee shop or a drive-thru espresso joint. The highly caffeinated Boise area already had seven coffee-shop companies with at least two locations when a string of Moxie Java owners started splintering off a year and a half ago, creating new chains or joining existing ones.

More than 20 Moxie Java cafes have either closed or donned new identities since. The company that grew to nearly 70 coffee shops scattered from the East Coast to Oregon a few years ago has dropped to 32 locations now. Most found new affiliations; one shop that hasn't found new life is the first-ever Moxie Java, on Main Street in Downtown Boise.

The owners of several rebranded Moxie shops wouldn't discuss details of their business and financial relationships, but they offered several reasons for leaving Moxie. Some say their partings were amicable, based on irreconcilable differences. Some say money and control were issues in a relationship that didn't offer enough of either.

The man at the center is Moxie President Rick Dean, who runs the company and its roasting and distribution operations from the Garden City headquarters at 4990 W. Chinden Blvd. Dean says the departures are not a sign of trouble but stem from a mismatch in beliefs about how a coffee chain should operate.

Dean said Moxie is replacing its old way of licensing the brand with a new franchise system. The recent turnover gave Moxie its first chance in 20 years to open new shops in the area, Dean said - and he's in the market for franchisees. One new Moxie Java will celebrate its grand opening this weekend in Meridian.

"I've been interviewing all kinds of new candidates," he said. "We had 1,500 inquiries in the last 20 years that we've had to turn down."

Changing the name

Jason Wilson of Fruitland and his Oregon business partner, Randy Perkins, bought four Moxie Java shops that had been around since the 1990sfrom an estate sale a few years ago. The shops are now Big Star Coffee.

Wilson grew up with Moxie and says his first cup of coffee was Moxie. He "thought it was a happy family."

Over the first year, Wilson became disillusioned. Under his license agreement, he had to use certain products that he could buy only through Moxie's distribution company. That created "discomfort," he said.

"I don't think I really had any idea what I was walking into," Wilson said.

Franchise disputes

Wilson's complaint is similar to one raised in a lawsuit in Boise between Boulder Creek Enterprises, a former store owner, and Moxie. Boulder Creek argued that Moxie charged store owners more for coffee beans than they'd pay for the same product at retail stores.Moxie argued that selling its beans in retail outlets would improve brand awareness. The lawsuit was settled last year. A member of Boulder Creek Enterprises declined to comment on it or on the former business relationship with Moxie.

Similar complaints have surfaced in lawsuits filed around the country by owners of franchises in other chains. Lawsuits against thesandwich chain Quiznos said there were hidden markups on food and supplies that franchisees had to buy under their contracts, according to Nation's Restaurant News.

Dean said consistency is important. If there are approved types of cups, flavor syrup and white chocolate, customers will always get the same white chocolate or raspberry mocha.

"It's just like a McDonald's," he said. "We wish (the former Moxie owners) well, but we have to have consistency within all the stores for drinks. ... Consistent stores in a brand will be worth more long term than inconsistent stores, and that's why we had to do what we did - to protect the brand equity."

Freedom, coffee

Other former Moxie owners said striking out on their own gave them freedom to add new beans or roasts, swap ingredients, change recipes and make other decisions independently.

Dave Rickard owns one of six Lucky Perk coffee shops in the Treasure Valley. Rickard had been with Moxie for 10 years under a brand-license agreement when he teamed up with several other Moxie owners on a new chain.

"Our relationship ended amicably," Rickard said. "I just felt we needed a change."

Rickard said Lucky Perk is using a local private-label roast - the name is secret for now - plus Ghirardelli white chocolate and Meadow Gold chocolate milk. Lucky Perk also sells different pastries.

A co-owner of the other five Lucky Perks shared Rickard's sentiments.

"Leaving Moxie was like leaving our child on someone's doorstep," said Diana Mallard, who was in the Moxie family nearly 16 years. Creating a new brand was like giving birth to a child, she said.

Italian-style espresso was the allure for Evergreen Partners LLC, a Boise company that runs nine former Moxie Java shops. They switched this month to Caffe Capri, a brand licensed through Seattle-based roaster Caffe D'arte.

"We are grateful for our association with Moxie Java over the years but wanted to bring something we felt was particularly unique to the coffee experience in Boise," said Patrick Davidson, managing partner of Evergreen. The partners picked Caffe Capri after a "lengthy and rigorous evaluation," he said.

Sticking with Moxie

Don't expect Moxie Java to disappear. The chain just added two new shops - one in Las Vegas and one in Meridian.

Sami Morledge, 31, co-owned four Moxie Javas in Nampa before opening a fifth inMeridian a month ago. She bought into an existing ownership group in 2010.

"They're from Boise," Morledge said. "Our coffee is roasted right here; it's super fresh. And I wanted to go with a product I loved."

Despite the "drama in the Moxie family," she isn't going anywhere - though she has been approached, Morledge said. She doesn't mind the uniformity and corporate products. If you're paying $4 for a drink, you want to get what you're expecting, she said.

Revenue at her stores has climbed 10 percent a year on average since 2010, she said. "My stores are doing amazing. Why change something that's notbroken?"

Audrey Dutton: 208-377-6448, @IDS_Audrey