Latest / Glovisor Podcast / Ep. 29: The Low Overhead Coffee Franchise Almost Nobody Knows About — Mr. Cappuccino
Transcript
- Joe: Some businesses start with an idea, others start with a problem no one else was willing to solve. Today, we're talking to the founder who turned a simple need into a fast-growing brand. Welcome to the Globizer Podcast, where we explore leadership, communication, business growth, and personal development through real conversations with people that make an impact. Our guest today built a company by seeing what others overlooked, a gap in the market, a customer experience that needed to be elevated, and service that could be transformed into something scalable, repeatable, and franchise ready. With a background that blends hands-on experience, business insight, and a deep understanding of what people actually want. Mr. Cappuccino, founder has taken a simple concept and turned it into a system that's expanding far beyond its first location. Globizer welcomes Nelson Mendez. Nelson Mendez Mr Cappuccino: Hello, Joe. Thank you for having me and I'm very pleased to be with you and your audience. Joe: pleasure. Looking forward to the conversation. Nelson Mendez Mr Cappuccino: Let's do it. Joe: So Nelson, how did this entire journey begin for you? Nelson Mendez Mr Cappuccino: Well, this is an idea that I in Venezuela, where I am from. After 30 years in the hotel and restaurant equipment and supply business, we had the need to change the feel of business. And we installed for Nestle, we installed 962 machines, Nest Cafe machines in five years. And that was the beginning of, you know, a new feel of world that we did and we travel every year to Italy to know new manufacturers, new producers for coffee, milk, whatever the industry needs. And when we decided to move to the United States, we saw a niche in the Hispanic and Latin market, that they used to have a different product. So we're specializing espresso coffee. That's the main idea that we have from Venezuela and also from Italy because it burned also right there. Joe: now for people who don't know much about coffees what's an espresso? How is that different than coffee? Nelson Mendez Mr Cappuccino: Okay, well, the espresso coffee is when you grind the bean, the grind is finer, much finer than the American coffee one. After that, our machine or the machine, the Italian machine, they put that ground coffee in a piston and then the machine applies hot water and pressure. then is how come they concentrated of the coffee. It's not dripping coffee like the American coffee. It's a pressure brew coffee. So that's why it comes the shot. That shot has the same quantity of caffeine that American 20 ounce cup. Joe: So it's much, much stronger. Nelson Mendez Mr Cappuccino: much, much stronger to the taste, okay, and stronger also to mix it with milk to make cappuccino or macchiato or caffè latte. So that's why we use espresso coffee to make cappuccino. Joe: what sparked the idea that eventually came Mr. Cappuccino? Nelson Mendez Mr Cappuccino: Well, as I told you, when we decided to move here, that we decided to go in this business, we saw a lack of quality coffee in some activities, like for example, healthcare. And we saw that when we start making demos in hospital doctor lounge, And when we saw the expression in the face that they put when they tried the coffee and they say that machine remains here, then we saw that we have a business in our hand. Okay, so a matter of good quality, consistency. If you have a cappuccino here or you have it in Denver or you have it in Boston. the capuchin has to be the same quality, you know, and that's part of the system that we offer to our franchises. Joe: one day, you're thinking, Okay, I have I can make the best coffee ever and I want everybody to have it at these hospitals and these locations. but what was that moment where you're like, Okay, you know what, I can do it differently and I can do it better? What was that idea? Nelson Mendez Mr Cappuccino: Well, that moment was when I started receiving calls from people asking for my service. That was really the moment that I said, we have something great in our hands. So people start talking about the product and... referring our brand. Joe: what made you decide that let's just say you wanted to go with Mr. Cappuccino as an option and the options that you wanted to choose? Because I'm I'm sure that's difficult, when you're first starting a business and you're trying to bring it to market, you're thinking, Do I bring all these options at once or do I just bring a few options? How how was that thought process for you? Nelson Mendez Mr Cappuccino: the point is that our machines automatically make 10 different drinks. And you only need four ingredients. The coffee beans, the powder milk is powder milk, real powder milk, especially processed to work in this kind of machine. all, not all, all powder milk work in this kind of machine. The chocolate. And we'll start with the vanilla. Okay, only with these four ingredients, the machine can make up to 10 different drinks. Like for example, the espresso is just the shot. Our Americano, our Americano is one espresso with hot water. The machine does everything. The cafe latte is one espresso with milk. The cappuccino, the machine add to that latte a touch of chocolate. Mochachino is a cappuccino with more chocolate. We also have the macchiato, known for the Latins and the Hispanic people like cortado or cortadito also. We can also make hot chocolate for the person that they don't drink coffee or maybe, you know, in winter time, in the afternoon, you don't want to have coffee in the afternoon, but you can have a very good hot chocolate. And also the other one that is the vanilla. In this case of the vanilla, lately we have added some trending flavors that people love, especially millennial, jeans ladies, that is the matcha green tea latte and also the chai, the classic chai latte. So depending on the place where we put the machine, then we change that flavor. We could also offer decaf. Maybe in a senior location that some of them can drink coffee, maybe we can also offer the decaf. We can have a very good decaf latte. Joe: But before launching the company, what kind of background or experience did you have that helped you understand this industry? Nelson Mendez Mr Cappuccino: Well, I'm graduated in hotel management in Spain. I worked in hotel for 10 years, five years in Spain and five years in Venezuela. And in 1984, that I was working like assistant general manager in a hotel in Caracas, I wanted to go over. to go to the next step, know, the next step was general manager. But I was too young. I was too young and I applied here, I applied there. Oh, you're too young, you're too young. Well, then I decided to go by myself and then I create a hotel and restaurant equipment and supplies that we found in Venezuela in 1984. We start making, that line of We call it bath amenities for the hotel. The little shampoo, the soap, the shower cap, the sleeper, all that kind of thing that are customized to the customer. So we have a special line for Intercontinental, for Sheraton, for Hilton, for Radisson, all the international chains that were in that time in Venezuela. So we start with that line in we started importing also equipment. we equipped big hotels, complete hotels, complete new hotels in Ciro, know, the room, the kitchen, the laundry, everything that the hotel needs. So in 1998, when the political situation changed a little bit in Venezuela, one of my customers was my friend. He was an owner of a hotel. He showed me a picture of the Nescafe machine. And he told me, Nelson, I want this machine in my hotel. short story, I called Nestle. That was a pilot project that they have for Latin America starting in Venezuela. They told me to talk to a German guy that was importing the machine. This German guy didn't want to leave Caracas. I had offices all around Venezuela, so. You know, we did an agreement that I put machines all around Venezuela, like a third for Nestle. OK, I wasn't an employer of Nestle, but my company did the job for Nestle for five years. And we installed around 962 Nest Cafe machines. So we travel every year to Italy, new machines, new models, new manufacturers, new processes and all that. At the beginning, this machine was designed to make 20 coffee per day. In Venezuela, the first one, they did 150 coffee per day. So we have to, listen, change this, change that. This little hole, you have to change it. Change this plastic part, put something, know, stainless steel or something like that. So we help a little bit to also have this new machine that we have right now. Joe: One of the interesting parts about this is I get to talk to a lot of different business owners, but in your situation, you you have the history within the same industry. So this is not a new industry for you. and you've been part of it. So you really know your A, your market, you know where to place them, it's just experience, right? It's it's you have to be in the business to understand the business. Yeah, and you have that. and w one of the things is that going back to you said that it was a different machine then, and obviously you you've improved it to a much better machine. how does it compare now to in the market your machines versus what maybe some competitors? Nelson Mendez Mr Cappuccino: Correct, correct. You know, there are some of them that they also use Italian machine. It has to be like that. That's not a secret. But then the difference comes in the product. I don't know if saying this or not, but I'd rather to have the cost a little bit higher, but has a plus quality and use another kind of product that doesn't give you the same flavor, the same consistency. I want everyone that tries cappuccino from Mr. Cappuccino to say, wow, what is this? Amazing, delicious. Like they say, we want to continue with that model. Joe: you decided to go with the franchising style of business versus possibly just building the business and running all these machines yourself instead of franchising. So what was that aspect that made you decide to go in the franchising direction? Nelson Mendez Mr Cappuccino: Well, the first thing, the time. I'm not 40, as you can see. idea always was to expand the business as soon as I can. Okay, I want to be maybe in five years selling 300, 400,000 coffee per month. That's my goal. Okay, and doing it by myself with my resources locally here in central Florida, that will take, I will do it for sure, but that would take more time than the time that I have to make this possible. Joe: Yeah, that makes a lot of sense. so what does the ideal franchisee look like? Nelson Mendez Mr Cappuccino: this can be a business to anyone. Of course, not everybody likes to sail. Not everybody feel comfortable, you know, talking to people offering a service. So, but as there's something, you know, that it's not impossible to learn. the operation will teach you every day things that you will feel more comfortable to do whatever you have to do. We say that, OK, people that feel comfortable in sales. I would say. Young entrepreneur, I would say people almost to retire, but that they want to have a side business. I would say people already retired, they want to do something. They want to do something, but not 100%, % seven days a week. Hey, listen, no, this model is different. This can be semi-absentee, semi-absentee. Okay, we can talk about that later. that's why I say that almost anyone can be a good lead, a good prospect for this business, but they have to understand the business. Okay, possibly that fear that they have to talk to people is only in the beginning because once you start your machine, you visit them every two weeks. So you don't have to talk to anybody. Hey, listen, this is your business. You have to make it known, go to networking events, be member of some kind of a chamber of commerce. This is not a business that you buy the franchise and then you sit to wait for the money. No, that's not the model. Joe: basically anyone who may be interested in in the way that I understand it, to be a good networker, to connect with people, but they don't have to consistently be selling because once they have a good relationship with that location, this is it. They set the machine and it's a little bit of a set it and forget it for a little bit of time, Nelson Mendez Mr Cappuccino: And that's what Mr. Cappuccino did. Because when Mr. Cappuccino goes to any event, Mr. Cappuccino is not, everybody knows Mr. Cappuccino. Okay, so everybody knows that anyone that needs a coffee machine, call Mr. Cappuccino. Because it's part of the system. Joe: Yes. Nelson Mendez Mr Cappuccino: do the appointment with the owner, the decision maker, whatever. Okay. But after that, you have to continue the labor, and that's the labor, you know, to maintain the pipeline full of prospects. Maybe you start a machine, a restaurant, the restaurant closed, you have to, one machine to locate in some place. And the idea is that you grow, that you grow the business, that you need more machines. That's the idea that every month, every three months, you buy more machines and new customers and all Joe: So once they join the system, they get all of this the education, the processes and also everything that they need. So th they don't have to go anywhere and source anything. Nelson Mendez Mr Cappuccino: Yeah, everything that... No, they don't have to go anywhere. They only have to go mandatory, the training period, four days. We have to see everything, marketing, sale, what to sign, what not to sign, what to offer, what not to offer, and the technical part of the machine too. Okay, in our website, we have a part that say, are you a good fit? One of the question is, are you able to change the gasket or the blender at home? Yes, you are in good faith. Joe: Yeah. so a question I do have going back to something you mentioned that this will be fitting for young people, this will be good for retired individuals. but if you're fairly young, and we have some some listeners that are fairly young and they're just coming into the job market and they're thinking maybe having a business is a better opportunity for them than it is to go get a job. Is this something that would work for them? Nelson Mendez Mr Cappuccino: Definitely yes, because they don't have to be seven days. They don't have to be five days a week Monday to Friday 8 a.m. 5 p.m. The other good thing is that they are going to talk to people. They like to talk people. It's something that for sure is good for them. And they are young. They have new ideas. Okay, welcome to the new ideas. Welcome to the innovation. Nelson, please, I need some flavor that is special for whatever. Joe: Mm-hmm. Nelson Mendez Mr Cappuccino: Okay, let's work on that, let's work on that. You know, so I think that your people, of course, your people has unlimited potential in this business. Joe: what's the geographic area that you're working with at this moment? Nelson Mendez Mr Cappuccino: In this moment, we have opened Denver market and Florida, of course, we have a big territory here in Florida and we opening also, we have signed in Boston, Massachusetts. Joe: Okay. Great. So any anywhere in US right now, it sounds like. Nelson Mendez Mr Cappuccino: we are ready to do franchises everywhere in the United States. Okay. We are ready. We are ready to go. in some states we have to do a registration first. We are new Joe, we are new franchising. Okay. Yes, it's our last year. you know, we are still Joe: Okay, sure. Sure. Sure. Well before I Yes. Nelson Mendez Mr Cappuccino: Learning even for the market, the market shows you many things. The market, wow, learn, every day you learn more about businesses, about what the people want, what the people expect. So I like that. I really like that. Joe: Absolutely. Well, and that's the thing, right? all the states are almost like different countries onto themselves because they're such different communities and you know, demand. Yes. at this juncture you you you're available to sell for people who are definitely interested in franchising anywhere in the US. But before I ask you, where does the future of Mr. Cappuccino look like in the future? Nelson Mendez Mr Cappuccino: Yes, yes, yes, that's correct. Joe: When do you think that probably is already in your mind Canada might be the future as well? Nelson Mendez Mr Cappuccino: Yes, why not? Yes, of course. Why not? Many people in some experts that we go ask about, you know, another countries and I always say yes, but we have to study each case. You know, we have to study each case. What are the famous tariffs now? And you know, and also what product do they have? Because right now our product comes from Italy. And the machine is also made in Italy. That's why, you know, it's a heavy duty machine that can make 200, 300 coffee per day. So depending what they have in that market. So that's something that we have to study each case individually. But yes, we are open to any proposal. Joe: now someone contacts you today and they have the market, they're ready to franchise. How long? What's the turnkey for them to get started? Nelson Mendez Mr Cappuccino: Once the legal process is made, know, know, what about that, the FDD that they have 14 days to study, we're an attorney and all that, the discovery call, everything that they had to do before the signature, before signing. Once they sign and they do the wire transfer for the amount, in a week they have the machines and the supplies. in we say that that depends how fast they want, but next week we can have the training. So in a week or 10 days, they can start offering the machine and installing the machine. That's a good thing that once you visit a customer and they say yes, you can install your machine that same day. If that's possible. OK, so you don't have to wait for us to send the machine or not. They have it there. So something that we always say one or two months, one to two months to start. You don't need a brick and mortar location. You can do it from home. That's another good benefit. Right now, many people do that. Many cities give you the occupational license to do that. Of course, you don't have to, you cannot bring trucks to the house and all that, but you can have a mini store rented to get the goods and all that. So that's not a big deal. But the point is that you don't need a city permit for a restaurant that you don't know how long. So we have many benefits, you know, compared to other kind of businesses that our franchisee have. So they can start making money in two months. Joe: Well, so that's that's pretty fast. You can be in the business in a month or two. Yeah. And then your franchise doesn't have a requirement for a location, a brick and mortar. You don't have to have one. Nelson Mendez Mr Cappuccino: Yes, beautiful, exactly. No, you're customizing. Joe: that makes a big difference 'cause you look at some other franchises and different styles, they have these big requirements where they re they require a storefront or some signage and this and that. And employees, that's right. And all of a sudden you're you know, two hundred, three hundred, four hundred thousand dollar business and you're like, Wow, that's that's a big investment to lay out, and you don't even know if it works. Nelson Mendez Mr Cappuccino: Employee. And talking about that, you know, we also have different levels of investment. are, you know, owner operator, okay. We have the eight machines level that is, you know, is the minimum that we are for. Then if you would like, well, semi-absentive one, we could have a 12 or 20 machines level. That is also, you know, more income that allows you to have maybe a manager or something like that, that they can, you know, do the job. And of course we have also for larger investor that 24 or 40 machines that even in that case we can we can talk about a bigger territory. Okay for bigger investor we could also talk about a master franchise or multi-unit area that we like the best. The multi-unit is more you know flexible and they have more capacity to do business but we are open to any proposal. even for a larger investor, of course. Joe: that's a really good point. And then you brought up territory. so regardless of the level, you have some territory protection. Nelson Mendez Mr Cappuccino: When we sign a franchise, we negotiate a territory, exclusive territory for the franchisee. Nobody can go there to meet with the cappuccino franchise. So, but we like to do at the beginning together with the franchisee to study the territory that he want. Because we want to be sure that they have enough restaurants, enough offices, enough corporate buildings, enough healthcare location, hospital, college. enough to grow. Okay, we are thinking here in, you know, five, 10, 15 years, not only the next two or three years to we're thinking in growing the business, maybe in five years having starting with eight, maybe in five years, they can have 20, 24. Now we're talking about income. Now we're talking about the manager. Now we're talking about semi absentee. You know, now we're talking about, I don't like to say that, but passive income generator. passive, know, we have to be careful with that. But because you always have to be there, you your business. Joe: what advice would you give someone who wants to start a business but doesn't know where to begin? Nelson Mendez Mr Cappuccino: Listen, the first thing that I would recommend is to talk to this nonprofit organization that they guide new entrepreneurs to do the things right. Because you waste much time learning, trying to do things in the way that is not correct, is not right. So there are many organizations that they guide you, you know, the legal part, the... the accounting and all that, that you can start well. You know, comply with all the laws and no penalties, please. Okay, so, and after that, maybe have a conversation with Mr. Cappuccino to see if they have available territory or something like that in the place that we could do something to help them. But the first thing is the most important, you know. not to go along with the blind, talk to somebody that knows the market, is locally there, and they can guide you Joe: for individuals who are just starting now and and and they probably don't have a lot of capital, would they be able to finance a portion? Are there associations available to help? Nelson Mendez Mr Cappuccino: Yes, we have some third party companies that are specialized in financing franchises, so they know what the business about. And we also have for persons that already have a company that they would like to diversify in other kinds of business, we could also get some kind of finance for the machine. Okay, so different finally, it's a list to own. I don't know if you are familiar with that, that we can arrange to do the part of the machines to do it in that, with that figure that we could also offer to them. Joe: yeah, explain it to us. W the least to own process. Nelson Mendez Mr Cappuccino: Well, it's a tool that some lenders have that you lease the equipment and you pay a monthly fee for that equipment that includes the value of the equipment and the interest rate. And then at the end of the period, the equipment is yours and you don't pay anything else. The last payment is your last payment for the equipment. So after 48 or 60 months, that equipment is your property. Joe: they don't have to buy those put up all the money up front to do so. Nelson Mendez Mr Cappuccino: lender pays to us and then we send the machine to the franchisees. Joe: And you help organize all of this if that's what they need? Okay. Nelson Mendez Mr Cappuccino: Yeah, Yes. Not in the part of the no, the classified national because this company, you know, they, have a special a, they see the profile, depending on the profile, count the amount, the rate and all that. So we don't, we don't touch that. That part. Joe: Nelson, who should be contacting you right now? Nelson Mendez Mr Cappuccino: anyone that wants a business that you don't need rent, you don't need employees, you can have recurring income next week. listen, this is a proven system. I cannot promise you that you are not going to work. No, you are going to work. Everybody has to work. So that's something that, but once you get that, once you get the direction, listen, this, everybody's, once you start your first machine. And I tell you because it was like that, everybody can speak about Mr. Cappuccino. And word of mouth, know, word of mouth is the best marketing tool. Once you start seeing, where did you get that machine? it's Mr. Cappuccino, Mr. Cappuccino, Mr. Cappuccino. And then at the beginning, it has to be like that. Joe: Course. Yeah. And and I'm sure people who may be interested in the master franchise systems and then also investors who might want to invest in these types of business processes. Nelson Mendez Mr Cappuccino: Yes, of course, of course. We can also have a call, we can have a meeting, I can travel, whatever you want. What always I would like is that people try our coffee first. That's something that, you know, once they try and say, wow, what is it? Okay, that's the product. That's the product. So you are sure that you have a good product, so you can go anywhere. because you know that you have the best coffee in town. Many people say that. Joe: now that this individual finally says, okay, I need to make that change, does it cost anything to just give you a call and have a chat about whether franchising it works for them or not? Nelson Mendez Mr Cappuccino: Well, yes, they can go through our web page and there we can make an appointment. You go there in the contact page to leave your information and we establish an appointment and we can show you everything. We can show you a number. We can show you a reaction. The only thing that we cannot invite you is cappuccino, virtually, but someday you will try. So that's the idea. Joe: Yeah. Excellent. Nelson Mendez Mr Cappuccino: www.mrcappuccinofranchise.com. Cappuccino, double P and double C. Joe: Nestlin, thank you so much for the time and for all the information. I'm looking forward to a cup of coffee. Nelson Mendez Mr Cappuccino: Well, let's do it as soon as we can. Thank you, Joe. Thank you for everything. Joe: You're welcome. Thanks everyone for listening. If this episode has inspired you, share it with someone who needs it. And don't forget to follow the Globizor podcast for more conversations on leadership, communication, resilience, business growth and personal development. Till the next time.