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DAYTONA BEACH It sounded like a good idea at the time. A drive- up gourmet coffee shop with tropical protein smoothie drinks sold on the side. But Keith Cameron Smith, a homegrown get-rich guru, doesn't mind admitting he made a big mistake when he sunk and lost about $250,000 in a Barnie's Coffee franchise. People only bought coffee from 7:30 a.m. to 10:30 a.m. Go figure. Most of the day hardly anyone drove up to the drive-up window near the intersection of Ridgewood and Mason avenues. Buying equipment and remodeling the tiny store, which had no seating capacity, cost a bundle. The teenage help was unreliable. And being a silent, hands-off partner, whose only role was providing financial backing, ultimately backfired. After two years of pouring money into what turned out to be a losing proposition, Smith, 34, closed the franchise last month. It was a classic case of how to fail in business by not paying attention, according to the Ormond Beach resident, who's also a motivational speaker and the self-published author of such books as "The Spiritual Millionaire" and "The Top Ten Distinctions Between Millionaires and the Middle Class." Recently he was a guest on televangelist Robert Schuller's nationally broadcast "Hour of Power" TV show, and his books are now promoted through a link on the minister's Web site.
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DAYTONA BEACH It sounded like a good idea at the time. A drive- up gourmet coffee shop with tropical protein smoothie drinks sold on the side. But Keith Cameron Smith, a homegrown get-rich guru, doesn't mind admitting he made a big mistake when he sunk and lost about $250,000 in a Barnie's Coffee franchise. People only bought coffee from 7:30 a.m. to 10:30 a.m. Go figure. Most of the day hardly anyone drove up to the drive-up window near the intersection of Ridgewood and Mason avenues. Buying equipment and remodeling the tiny store, which had no seating capacity, cost a bundle. The teenage help was unreliable. And being a silent, hands-off partner, whose only role was providing financial backing, ultimately backfired. After two years of pouring money into what turned out to be a losing proposition, Smith, 34, closed the franchise last month. It was a classic case of how to fail in business by not paying attention, according to the Ormond Beach resident, who's also a motivational speaker and the self-published author of such books as "The Spiritual Millionaire" and "The Top Ten Distinctions Between Millionaires and the Middle Class." Recently he was a guest on televangelist Robert Schuller's nationally broadcast "Hour of Power" TV show, and his books are now promoted through a link on the minister's Web site. But Smith, who made his money in the futon furniture business (he recently opened a new store in Jacksonville), and by investing in real estate, isn't worried that having a franchising fiasco will hurt his credibility. Instead, he puts a positive spin on the financial grinding he took from his coffee venture, even though it caused him to slip somewhat from the millionaire status he said he attained at 33. "The way I look at it, a failure is a success if you learn from it, he said. And what hes learned is youve got to trust your instincts and go with your gut. I had no knowledge of the coffee (business) whatsoever. He would also be much more hands-on, he added, if he had to do it again. Smith, though, said he has no hard feelings about the partner hed rather not name, who was supposed to run the business, but after six months got burnt out and allowed the teenagers to run the store. That wasnt a good idea. Now hes hoping to sell the building for about $75,000. The land, though, belongs to Reid Hughes, a well-known local environmentalist and investor. Anyone who buys the building would need to pay Hughes $2,000 a month to lease the land. Hughes would also consider selling the land, though he hasnt set a price.
Its a very valuable corner, he said. It could be used for virtually anything. Except maybe another Barnies franchise.
We really have no way to guarantee anybodys success or failure, said Jason McCord, franchise development coordinator for Barnies Coffee & Tea Co., which is based in Orlando and has 35 franchisees, many of them in malls. He said he couldnt comment on Smiths store specifically, which was the only Barnies in Volusia and Flagler counties. A new one, however, is set to open soon at the Hilton Daytona Beach Oceanfront Resort, according to McCord. Gourmet coffee has never been more popular. But 90 percent of (a franchisees) success is location, location, location, he said. Amy Brannon, a spokeswoman for the International Franchise Association in Washington, D.C., said her organization doesnt keep statistics on the rates of success or failure among those who invest in franchising. But its basically a small business, she said, and when you open any small business there is a risk. The best thing to do is do research, and get the best possible advice. One of the surest ways to get good advice, she said, is to contact current and former franchisees whose names are supplied on the companys official documents.
It hurts to lose $250,000, said Smith. But I learned my lessons. One of which, he quipped, is to know when to fold.
Caption: Photo 1: Keith Smith stands in front of the Barnies Coffee franchise he invested in that failed and closed in less than 2 years.Photo 2: Below are the books hes penned. News-Journal/ NIGEL COOK
(Copyright 2005, The News-Journal Corporation)