Starbucks Meets Robin Hood

In Kirkland, Washington there is something new and interesting taking place in the coffee shop business. Ervin Peretz (37), an ex-Google programmer, has opened a new coffee shop named Terra Bite. So what makes it so different from the thousands of other coffee shops across the county? There is no list of prices for the products.

What does this mean? It's simple; the customer is the one who decides what, if anything should be paid for a cup of Joe. The shop has a metal lock box sitting on the counter for customers to pay into, if they feel the need. There is no pressure and the café employees are told not to react whether the person places money in the box or not.

"Does it really matter to any of our patrons ... whether they pay a dollar or three dollars or five dollars?" said Terra Bite founder Ervin Peretz.

So how does Peretz keep the business afloat if he doesn't charge patrons for goods? He is using a very efficient narrow profit margin and low-overhead business model. Basically he is counting on the well-to-do customers to basically cover the cost of the ones that decide to either give very little or none at all.

Peretz has a $4000 a month lease and has hired one part-time employee, along with a manager who actually is his girlfriend, Susie Allsup. So far they have served around 80 customers per day, and take in around $3 per transaction. Peretz thinks that once he can bring in at least 100 customers a day he will break even

Peretz came up with the name Terra Bite on two fronts: terabyte (a trillion bytes) as well as the reference to food and earth. Coming from a programmer's background, he thought it would be a nice play on words.
"People want something different. They want simplicity of payment," Peretz said. "They want to be taken to a new place, and they want to contribute to something."
So through the act of "voluntary payment", Peretz is becoming the virtual Robin Hood of the coffee shop industry. Will his plan of a "free-for-all" coffee shop be able to stay afloat and compete against national chains such as Starbucks? Well, if we compare Peretz's story to that of Robin Hood, he just may win out over the big businesses of the coffee industry. Apparently chivalry isn't dead after all.

*Sources*
-The Columbus Dispatch online. URL: http://www.dispatch.com/news/religion/faith-story.php?story=dispatch/2007/02/16/20070216-C2-02.html. The Seattle Times. Roes, Amy. (2007 Feb 17).