Closure Causes ?A Latte Confusion?

After 10 years in business, Gloria Jean’s Gourmet Coffee in Fayetteville’s Northwest Arkansas Mall closed on Dec. 1.r

Then the corporate office reopened the shop on Dec. 3.r

It seems that the franchisee, Scott Tanner, bailed out of the business. Tanner, as you may recall, closed his other business in the mall, Candy Creations, in October. r

According to two Internet sites — businessesforsale.com and franchisesales.com — the mall coffee shop had been for sale since July.r

The ads said the owner wanted $250,000 for the business. Gross income was estimated at $485,000 per year, with net profit ranging from $250,000 to $500,000 per year. The rent in the mall is $4,450 per month, and the lease expires in December 2006.The shop had 12 part-time employees.r

The reason for selling was listed as “consolidated business interests.” r

We noticed that Tanner paid $258.58 in Fayetteville’s 2 percent hotel-motel-restaurant tax last year. That would mean the Gloria Jean’s in the mall had about $12,929 in sales of food and prepared coffee drinks last year. We know the store also sells gift items, but $12,929 seems a far cry from the $485,000 on the Internet ads.r

When we asked Matt McGuinness, executive vice president of development for Gloria Jeans, if the discrepancy in gross sales and the amount Tanner reported to the city looked odd, McGuinness said, “That is not an unrational observation.”r

McGuinness said Gloria Jean’s is currently looking for a new franchisee to run the Fayetteville shop. He said the company has 142 domestic franchise locations and fewer than a dozen coporate-operated shops. The Fayetteville location is the only one in Arkansas.r