Swiss Farms Owner Acquires Saxbys Coffee

Drive-thru c-store, coffee chains will be run as separate brands, will not cross-merchandise

BROOMALL, Pa. -- Paul Friel, the former Sunoco and Wawa executive who has run the Broomall, Pa.-based Swiss Farms chain of drive-thru dairy and convenience stores for the last three years, is now also the new CEO of the Saxbys Coffee shop chain.

Investor Robert E. Brown Jr.'s MVP Capital Partners, the Radnor, Pa., firm that has owned Swiss Farms since 2003, paid previous owner Joseph Grasso less than $3 million in cash and debt payments for Philadelphia-based Saxbys, people familiar with the deal told The Philadelphia Inquirer.

"There's great demand for high-end coffee," Friel, a former district manager for Sunoco's retail operations, told the newspaper. "We franchise. That [enables us to] better reflect neighborhoods than the big chains. We're part of the community we're serving."

Swiss Farms has a dozen stores in Delaware County and a new one in Charlotte, N.C., under its first-ever franchisee, Mike Lang. A second will be opened by ex-Fox 29 weatherman Frank Cariello in Raleigh, N.C., this fall, said the report.

Saxbys Coffee LLC said in a statement that it is prepared for "vigorous franchise growth" following its recent acquisition by Radnor, Pa., based MVP Capital.

Fueled by the resources and expertise of its new ownership, Saxbys is poised to add 100 units in the next three years, the company said.

Company management said recent brand initiatives, such as the promotion of Saxbys' Fro-Yo (frozen yogurt) program, introduction of all-natural fresh fruit smoothies and a made-to-order breakfast sandwich program have further strengthened both franchisee performance and Saxbys' marketplace potential.

Saxbys, which has 28 locations, enjoys a strong presence in the Philadelphia, Washington, D.C., southern Ohio and Dallas markets, as well as throughout college campuses, said the company.

The new ownership of Saxbys likely will not change the outward appearance of the chain, Nick Bayer, CEO of Saxbys the CE, told The Philadelphia Business Journal in a separate report.

MVP Capital, will run Swiss Farms and Saxbys essentially the way they are.

"Even though there's common ownership, the two will be entirely separate brands," Bayer, said on a conference call that also included Swiss Farms CEO Paul Friel.

Consumers won't see Saxbys coffee in Swiss Farms stores, or Swiss Farms dairy products in Saxbys stores.

"We're two different brands. On the front end at least, there's not a strong opportunity [for integration]," Friel said, according tot paper. "It'll be separate brands, separate identities."