Apr 28, 2026
When Warren Buffett was asked to buy Scooter's Coffee, he passed — saying the drive-through chain was too small "to move the needle for Berkshire." (1)
At the time, Don and Linda Eckles were still building the business around a simple idea they'd picked up on the West Coast: serve coffee quickly, without customers ever leaving their cars. In 1998, they opened their first drive-through (2) location in a converted Chinese restaurant in a suburb of Omaha.
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As the company gained traction, Don Eckles took a chance and wrote to Buffett to gauge interest in a potential acquisition. Buffett declined but pointed him to Nebraska-based M-One Capital (3) — a connection that ultimately led to a 2018 deal and helped accelerate Scooter's expansion.
"I knew that no bank was going to lend money to a guy coming in asking to borrow money to build a small drive-through building in someone else's parking lot and then sell $3 cups of coffee in Omaha," Eckles told Forbes (4).
A simple idea
Scooter's Coffee now operates more than 900 locations across over 30 states (5), but getting there wasn't exactly a smooth brew. Don and Linda met in Nebraska before raising their family in Alaska, eventually making their way to California, where they ran a traditional sit-down café.
It was there that they began to see the potential of a faster, more convenient model — one built around drive-through service. They brought that idea back to the Midwest, opening their first location funded with roughly $40,000 of their own savings.
In the early days, the couple handled everything themselves, working every shift for the first four months and adding a personal touch by sealing each cup with a smiley-face sticker. Once the business began to break even, they hired their first employees. About three months later, they opened a second shop.
But growth came with real risk. By the time they reached their fifth location, the Eckleses had taken on $150,000 in debt to build two mall kiosks.
"Early on in business, success is very fragile," Eckles said. "It's easy to make a mistake that's so big that it's not recoverable."
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A model built to scale
A core part of Scooter's strategy was franchising, which allowed the company to scale rapidly without shouldering most of the day-to-day operating costs.
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The shift toward franchising itself began in 2001, when friends, family and customers started asking how they could open their own locations. The company leaned in, building a system that could scale beyond what the founders could operate on their own.
"Our growth is truly guided by the success of our franchisees who believe in the brand, commit to exceptional customer service and operational excellence," Tim Arpin, Scooter's Coffee Chief Growth Officer (6) said this year.
A long-term study suggests (7) franchise businesses tend to be more resilient than independent startups. Roughly 92% of franchises are still operating after two years, and about 85% remain open after five. By comparison, 20% of independent businesses close within two years. According to data from the U.S. Bureau of Labor Statistics, (8) those patterns have held relatively steady over the past three decades.
For Scooter's, the model is now delivering strong results. Franchise locations generated about $859 million in systemwide sales last year, translating into roughly $80 million in revenue for the parent company. Of that, Forbes estimates about $50 million flows through as profit — a net margin of roughly 62.5%.
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Today, the company is valued at around $1 billion. The founders still hold an estimated 60% stake, while investors including M-One Capital, GMB Capital and Morrison Seger own the rest.
Fixing the model and choosing control
While Scooter's is now a billion-dollar business, the road to get there had a few bitter notes. After M-One Capital's investment, Scooter's confronted a problem that had been limiting its growth. The company had been paying out roughly 75% of its profits to early investors.
"At first, that didn't amount to much, but over the years that number became a significant number," Eckles said. "We realized that, if we wanted to grow a large and successful enterprise, we could not do that while giving out 75% of our profits. We needed to be able to reinvest that money into the business."
The fix was straightforward, but not easy. Scooters used part of the new capital to buy out and reward early backers, including friends and family who had supported the business. Going forward, distributions were scaled back to cover taxes, with the majority of earnings redirected into hiring, equipment and new locations.
That change helped unlock the company's next phase of expansion and made it an increasingly attractive acquisition target. But despite the interest, Eckles has signaled a clear preference to remain private and maintain control.
"That's something we haven't contemplated. For sure, for now, we love being a privately held company," he tells Forbes.
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It's an approach similar to In-N-Out Burger, which has expanded slowly while maintaining tight control over quality and operations, and Kettle & Fire, whose founders have chosen to stay independent even after surpassing $100 million in revenue.
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Built to last, not to trend
Now ranked among the 78th largest restaurant chains in the U.S., Scooter's Coffee has become the kind of company that might make Buffett take a second look at that early pass.
Scooter's didn't build its business on the kind of lines you'd expect outside Ralph's Coffee on a Saturday morning. It grew by making early missteps, correcting course and staying focused on what worked: a simple, efficient model, consistent execution and a willingness to reinvest.
That doesn't mean it ignores trends entirely – seasonal (9) s'mores lattes still return, and a banana cream matcha adds a playful edge to the menu. But those moments sit on top of a business built around fundamentals.
Their story is less about coffee and more about strategy. The companies generating the most buzz aren't always the ones delivering the most consistent returns. How a business uses its profits matters — those that reinvest in growth often build more durable value than those focused on short-term payouts. Models that scale efficiently, without sharply increasing costs, also tend to hold up better when the economic cycle shifts.
Article Sources
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Forbes (1),(4); Scooter's Coffee (2),(5),(6); M-One Capital (3); Budget Blinds (7); U.S. Bureau of Labor Statistics (8); TikTok (9)
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Victoria Vesovski is a Toronto-based Staff Reporter at Moneywise, where she covers the intersection of personal finance, lifestyle and trending news. She holds an Honours Bachelor of Arts from the University of Toronto, a postgraduate certificate in Publishing from Toronto Metropolitan University and a Master’s degree in American Journalism from New York University’s Arthur L. Carter Journalism Institute. Her work has been featured in publications including Apple News, Yahoo Finance, MSN Money, Her Campus Media and The Click.
