At their regular weekly meeting on $29$th March, $2020,$ Judi TurcottBecause of the location, Java J$$s was able to attract customers from its opening. Most of the Coffee Time regulars never came back as the average price of a cup of coffee had gone from $$1\mathrm{.}50$ to $$4\mathrm{.}50$ more for specialty coffees. Tea sold for $$2\mathrm{.}00$ to $$3\mathrm{.}50$ depending on the blend. The main local competition was two Tim Horton$$s and one McDonalds.However, the neighbourhood was changing $$ with more and more new residents being willing to pay the higher prices for a good cup of coffee or tea and artisanal baked goods. The Fair Trade

affiliation also attracted some customers.

Operations

Judi and Javid were committed to high levels of corporate social responsibility $$ both in purchases of Fair Trade coffee and tea and in their treatment of their employees. Their staff of nearly $30$ people seven of whom were part$-$time students$)$ were well paid for the industry, and earned benefits much better than the industry average. Staff were paid at least $$17\mathrm{.}00$ per hour $$

three dollars per hour more than minimum wage. After three months of employment, all

employees were eligible for the company$$s health care insurance which covered the cost of

prescriptions, eyeglasses, dentist visits, and other items. This cost the Company $$96$ per month

per employee. In addition, they provided workers schedules two weeks in advance which was

deeply appreciated by those with family responsibilities. As a result, staff turnover was very low.

Staff knew most regular customers and their orders which helped to speed service and made

customers feel special and loyal to the location.

After the first year of operations, the Company had identified three types of customers: $$ stay at

home moms who met friends at the caf$$; home workers who took breaks in the cafe or settled in

to work for a few hours; and, passing traffic $($commuters$)$ who bought a drink on their way to

work. Sales were split roughly $45\%$ dine in $($the first two types of customer$),45\%$ take out, and

$10\%$ sales of bagged coffee and tea. The caf$$ was open $80$ hours a week $7$am to $7$pm on

weekdays and $8$am to $6$pm on weekends.

Java J$$s bought all its coffee and tea from one of six Fair Trade organisations. The coffee beans

were then roasted in a back room at the Caf$.$ Fair Trade coffee and teas were more expensive

than regular commercial coffee, but Java J$$s was able to charge a premium price for it$.$ Baked

goods were purchased from a number of small local artisanal bakers, several of whom made their

products in a home kitchen. Other supplies $$ cups, lids, milk, cream, water, juice, etc. were

purchased from one of the many restaurant supply companies operating in Canada.

The company had a minimal website presence with its menu, opening hours, and information on

their underlying philosophy of serving high quality Fair Trade coffee and teas, while giving back

to the community. They were more active on social media.

Javid was responsible for their presence on social, posting several times a month on each of

Instagram, Twitter, and Facebook. Each channel had approximately $500$ followers, with about

$300$ individuals following on all three channels.

$2$

In mid $2019$ they had done a customer survey to see what attracted people to their cafes by

asking the question, $$What makes you come to Java J$$s$?$ Summary results follow:

Reason Respondents $(\%)$

Convenient Location $32\%$

Good coffee $17\%$

Friendly staff $15\%$

Nice Environment $14\%$

Fair Trade coffee $9\%$

Other $13\%$

In an effort to increase sales, the Company had looked into Skip the Dishes delivery app in $2019,$

but determined that the price that Skip the Dishes would pay barely covered the cost of goods

sold. In addition, Javid questioned whether someone was going to be willing to pay a $$4-$ $$5$

delivery charge on a $$4$ coffee and $$3$ muffin.

It turned out that Judi, the art historian was more interested in the business and budgeting side of

things, while Javid with the business education, was more interested in marketing and interacting

with their customers.

At the end of two years, Judi and Javid were pleased with the success of their business, but not

so happy with the amount of money they were earning $$ approx. $$20,000$ per year each for long,

long hours. Javid was living with his parents and Judi had three roommates in a cramped rented

house. Both wanted to move into their own places. Therefore, they decided to open more

locations in order to take advantage of the economies of scale and increase their income.

Expansion

The second shop opened in $2017,$ and after $5$ months was profitable on a monthly basis. The

second cafe was managed by Maria, a high school dropout with three school aged children, who

had been their first employee. It was rough at first as Maria had never held a job with that

responsibility. But Judi and Javid helped as much as they could and hoped that things had settled

down. Maria$$s kids could regularly be found at Table $22$ doing their homework after school until

her s