While some people stumble into an idea that becomes a business, Ziggi’s cofounders Brandon and Camrin Knudsen were intentional about their journey into entrepreneurship. The couple got the bug in their 20s, subsequently dropped out of college, and moved to Denver in pursuit of a franchise opportunity. But even before opening doors, the two dropouts had difficulty acquiring the funds to start.
“When you’re 20, 22, all you have is student debt, no assets. The bank is not thrilled about giving you money. The only way we were able to break into the business was because we actually bought a little mom-and-pop sandwich-and-coffee shop,” Brandon Knudsen says. “I worked in the morning at an ice cream plant six days a week. And then when I got off there, I’d go meet my wife at the store with our newborn, and we would attempt to sell as many coffees as we could.”
Eventually, the couple partnered with a coffee roaster who wanted to start a chain of coffee shops under the name Gizzi’s. But the partnership ended and the roaster took the name. The Knudsens were left with a debt-ridden property and expensive signage.
They decided to turn lemons into lemonade. The two decided to continue with the coffee shop, and after switching the letters around and buying an extra “g,” they opened a coffee shop under a new name: Ziggi’s.
Since then, the coffee brand has had a slow and steady approach to growth. The first Ziggi’s location didn’t reach a breakeven point until five years in. But two things happened that put Ziggi’s on a growth track. The first was an evolution of its menu, which Knudsen says developed organically. “There was definitely no sit-down, ‘Here’s how we’re going to build this menu.’ It definitely was customer-focused,” he says. “I was there all day, every day, and so I just learned what people liked and started to slowly introduce those items into the menu.”
As a result, the menu highlights drinks that range from specialty coffee items to fruit-based drinks. The peanut butter blended drinks are especially popular, as well as the Colorado Mocha. Most recently, Ziggi’s Red Bull–infused drinks have become a big hit for customers.
Ziggi’s even offers a “kidZone” menu for the younger crowd. The price point for those items are around half of the cost of the regular drinks, making it a more cost-effective option for families. The menu includes drinks like the Gumball—which mixes strawberry, banana, and white chocolate Italian soda—and the Shark Bite, a blue raspberry and lemonade slushie.
The second thing that led to growth is that Ziggi’s invested in drive thru with its second location, which opened in 2009. That quickly became the model of the future. Ziggi’s drive-thru locations have a small footprint—just over 600 square feet—which allows for two drive-thru windows and a walk-up window. Though Ziggi’s also has a few cafe locations, the concept’s primary drive-thru model has been thriving as off-premises has become more the norm, and that’s been especially true throughout COVID-19.
“We were prepared for the worst, and our cafe locations did get the worst,” Knudsen says of the pandemic. “On the flip side, our drive thrus just went bonkers. We had stores that were up 160 percent year over year, 140 percent year over year.”
But while Knudsen says Ziggi’s was well-positioned for COVID from a business standpoint, the team focused on sanitation and health efforts for their staff. They installed air-scrubbing technology within the filtration systems, and moved crew into other locations when COVID cases affected a store. Knudsen says the pandemic has also changed some of Ziggi’s operations, such as expediting a contactless payment system.
FOUNDERS: Brandon & Camrin Knudsen
HEADQUARTERS: Mead, CO
YEAR STARTED: 2004
ANNUAL SALES: $16 million
TOTAL UNITS: 30
FRANCHISED UNITS: 23
While many growing foodservice brands hit a wall in 2020, Ziggi’s managed to sell 40 franchise units last year. This year, Knudsen estimates the concept will sell closer to 60 units as people see the perks of a drive-thru model.
“We only build stores to do large revenues. We don’t have any stores that don’t have long car stacking,” Knudsen says. “We don’t build any stores to do $400,000 a year. We [aim for] $1 million a year, a million and a half. That’s our goal. So we’re positioned really well—from a technology, equipment, and process standpoint—to handle the big boost. We could double sales again, and we absolutely have the bandwidth for it.”
The chain now has a national footprint of 29 operating locations and over 70 units in development. The small store footprint allows it to be flexible in its real estate, whether locating in parking lots or big retail spaces. In 2021, Ziggi’s plans to open 30 new units.
In early April, the Ziggi’s inked its 100th deal with the company’s first franchisees. Steve and Jill Anderson signed the chain’s franchise agreement four-and-a-half years ago. They opened Ziggi’s first franchise location in 2017, a double-sided drive-thru in Loveland, Colorado.
As a brand that sells a well-loved product, Knudsen says Ziggi’s has post-pandemic staying power.
“Coffee is here to stay because of the social aspect of it. Even when things are bad, even when people are struggling, that’s their treat. And when you’re doing great, you still need your coffee,” Knudsen says. “It’ll be interesting to see a lot of people transition to working from home, and I don’t know that that’s going to change anytime soon. I think they like it. I think businesses realize they’re still getting work done, and that could affect the morning commute. But for us, we’ve done nothing but grow. I don’t really see that changing.”