UK: Coffee shop chain in receivership

Scotland's Beanscene coffee houses are different: the coffee and food are pretty commonplace (although a wider selection than in many coffee houses) and there are comfy armchairs and sofas, tall tables and wall-shelves. And then there is the music.

The company has created its own signature for a wide range of music, and they are quite clear about it - they play what they like and don't play what they don't. The company launched an on-line radio station, a music download shop and even its own record label. Those diversions didn't work and have been abandoned.

Perhaps the biggest differentiating factor - and one that brought coffee-houses closer to pubs (many of which are closing) - is the idea a concept that's almost like a picnic: buy platters of food to share and bring your own bottles of wine or beer with a corkage charge that should make other places blush with shame for the exorbitant charges they apply.

But it has not abandoned its commitment to live music: artists are encouraged to come along and play their original compositions. The plan was simple: kick off careers. And it's worked in at least one case - that of Colin MacIntyre.

Even running versions of arcade-game classics Asteroids, Pac Man and Space Invaders on their website has not been enough to stave off the basic problem that coffee houses are increasingly beginning to look like a great way to lose money.

And so yesterday, the company called in Administrators, who are keeping all outlets open for the time being, whilst they look for a buyer.

Given that the chain did not go for the highest-rent venues, and did not have to pay a large slice of revenue in franchising fees, its difficulties are a warning sign for those that have both of those issues to contend with.

Indeed, in a warning to franchising companies, Beanscene had licensed its format to franchisees. Even upstream, the franchising business is not immune from economic pressures. The company announced late last year its plans to develop franchised outlets across the rest of the UK, and to launch a new range of smaller Beanscene Expresso format franchises.

That strategy did not secure the company's future.