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The Dartmouth
April 20, 2024 | Latest Issue
The Dartmouth

Cowboy pressured by Starbucks

Not without stirring controversy, Seattle-based super-chain Starbucks Coffee Co. recently expressed interested in opening up a branch of its ubiquitous coffee shops in downtown Hanover, possibly in the site currently occupied by Dirt Cowboy Cafe.

Dirt Cowboy owner Thomas Guerra said that Starbucks indirectly approached him through local real estate agents who extended hollow offers to buy Dirt Cowboy's lease.

To have to choose between having Starbucks take over the lease and having it move in next door would be tantamount to a gangland offer -- "an offer you can't refuse," Guerra said. The implicit message, he said, was that Starbucks would either buy out Dirt Cowboy or drive it out of business by moving into another location in the center of town.

Starbucks taking over Dirt Cowboy's lease would yield Guerra about $350,000 to $400,000, poor compensation for the years of hard work and substantial investments into the business for which he has yet to see a complete return, he said. And by not having to pay for Dirt Cowboy's business the international franchise would thus save itself a considerable sum.

Guerra brusquely rejected the offer from the real estate agent, Robert Haynes of R. E. Haynes Co., and now displays a laminated copy of a recently published article on the affair in his cafe.

"I'm going to squeal like a goddamn pig if they squeeze me," Guerra said.

If he accepted such a deal, Starbucks would have essentially converted what is now Dirt Cowboy into a standard Starbucks coffee shop. Guerra also said that the town of Hanover would have little to no say in such a move.

Dan Shallit, regional development manager for Starbucks in New England, denied that Starbucks had designs for the Main Street landmark.

"We have no interest of doing anything with Dirt Cowboy," Shallit told a local media outlet, adding that Starbucks is also looking into expanding into other potential locations in the Upper Valley.

But Guerra said Haynes and another local real estate agent, Jeff Nick, paid a visit to the Dirt Cowboy about a week ago, taking pictures of the cafe's infrastructure and talking to Guerra to "feel him out."

During the visit, neither Haynes nor Nick, whom Shallit confirmed is a Starbucks location scout, talked about the specific sum of money that would change hands in a property transaction, Guerra said.

Their failure to make a substantial offer hints that Starbucks may decide to choose the path of direct competition by opening elsewhere in Hanover, although Guerra said that the local market is too small to support two coffee shops. Dirt Cowboy needs to break $700,000 gross to turn a profit each year, and a Starbucks outlet needs $600,000, meaning that there would have to be a whopping $1.3 million worth of business in Hanover for both cafes to stay afloat.

But as Dirt Cowboy grosses only $900,000 per year, either it or Starbucks would almost have to close shop, Guerra said. The name-brand recognition associated with Starbucks would likely draw most of the tourists that visit Hanover, substantially cutting into Dirt Cowboy's customer base.

Still, many current students said that they would continue to buy their coffee and baked goods from Dirt Cowboy in the event of a Starbucks opening.

"I like the Dirt Cowboy better," Alexia Huffman '05 said. "I think it's nice to have a small place that's unique to Hanover."

"Who wants to see a giant Starbucks across the street from Collis?" Chris Prentice '05 asked.

Guerra suggested that Starbucks could avoid the intense competition that would most likely follow an opening in Hanover by exploring their options in Lebanon, where he believes a coffee shop could make more than would be possible in the small Hanover market.

But as Shallit insisted, Starbucks itself has not approached Guerra about a potential move into Hanover. Guerra said that he would be willing to speak with Starbucks provided that it occurs on reasonable terms.

"I'm waiting -- reasonably -- for someone at Starbucks to talk to me," Guerra said.

Meanwhile, he is haunted by the prospect of competing with the imposing chain while trying to make the Dirt Cowboy a sustainable business.

"I'm still in the struggle," he said. "I'm still waiting for the good stuff to happen. This is a dark cloud for me."