Some of the drop in profits shown this quarter came about as a result of decreased royalty rates. As the user continues to make purchases and visit Second Cup Coffee Co.
No more is this evidenced by these two charts below. The royalty rates are the money that a franchisee, who owns their own business, must pay to the parent company for the use of their brand.
Of course, entwining cannabis with coffee is something likely to be heavily scrutinized by regulators. Lee is skeptical that trying to concentrate more on the higher-end market will do Second Cup much good.
In the first three quarters ofthe chain dropped sales in the same individual stores by just over five per cent. It was important to acknowledge this in the construct of the loyalty program so we could both support existing behaviours and create an experience that encouraged sampling new food and beverages.
Second Cup has recently brought in a new CEO, Alix Box, from Starbucks Canada, and has made several moves to make the company more attractive to investors.