More than a decade into running his Omaha-based coffeeshop chain Scooter’s, founder Don Eckles wrote a letter to Warren Buffett to see if Berkshire Hathaway might be interested in buying his business. The Oracle of his hometown wrote back asking for additional information and they “went back and forth a couple of times.”
Buffett ultimately determined that Scooter’s—which had been bootstrapped with money borrowed from friends and family—was too small “to move the needle for Berkshire.” But Buffett suggested another Nebraska investor, M-One Capital, and that introduction eventually led to a 2018 deal that freed Eckles up to go all-in on expansion.
“We couldn’t and didn’t do this ourselves,” says Eckles, who turned 70 last year. “We have been blessed beyond our wildest hopes.”
Scooter’s is still something of a midwestern secret, but it has been growing ever since that deal. The coffeeshop chain founded in 1998 by Eckles and his wife, Linda, now has 912 locations—excepting 19 company-owned stores, all of them are franchises—many of which are in the Midwest. Systemwide, those franchises rang up $859 million in sales last year, translating into an estimated $80 million in revenues for Eckles’s holding company. It’s an insanely profitable model. Because nearly all the costs are borne by the franchisees, Forbes estimates that Eckles booked profits of about $50 on that $80 million for a 62.5% net margin.
That margin means that Scooters has become a hot acquisition target, though Eckles says he prefers to keep his business private. Last year there were reports of an offer to buy the company for $1 billion. (Says Eckles: “That’s something we haven’t contemplated. For sure, for now, we love being a privately held company.”) Eckles could also take it public; the markets like coffee stocks. Arizona-based Dutch Bros, one of the best-performing restaurant stocks since its IPO in 2021, currently trades at over 4 times sales and 23 times its cash flow.
“It’s been one that’s been on the scene for a long time and everybody’s sort of wondering what’s going to happen,” says Jeffries restaurant equity analyst Andy Barish of Scooter’s. “The founders have been so under the radar.”
The Eckles remain majority owners in Scooter’s, with an estimated 60% stake in the $1 billion (approximate value) business worth some $600 million. Investors including Omaha-based M-One Capital, Minneapolis-based GMB Capital and Dallas-based Morrison Seger own the other 40%.
Scooter’s is currently the 78th largest restaurant chain in America and has locations in 32 states. Scooter’s strongest customer base is in Nebraska, Iowa, Kansas, South Dakota and Missouri. For now, there isn’t a single location on the West Coast—Scooter’s reaches as far west as Idaho and Las Vegas—or in the Northeast. Scooter’s is growing quickly in Florida and also has locations in Georgia, South Carolina and North Carolina.
“To be a major competitor in an industry as popular and competitive as specialty coffee and beverages is very humbling,” says Eckles, who is Scooter’s chairman.
Don and Linda married in 1975, after meeting when Don was a radio broadcaster covering a high school basketball tournament in western Nebraska where Linda was cheerleading. By 1979, the Eckleses’ were living with their young daughter in Anchorage, Alaska when the 24-year-old Don saw dogsled mushers on his commute and decided he wanted to learn the skill. The next year he mushed 14 (rented) huskies at the 1980 Iditarod Trail Sled Dog Race. He quit more than two-thirds of the way in, nearly at the seven-hundredth mile, and learned a valuable lesson: “Wisdom is every bit as important as brain power,” Eckles says. “There are ramifications for every decision. I’ll take risks, but I want them to be educated, well thought-out risks.”
After relocating to Folsom, California, the Eckles opened a sit-down coffee shop, but Don and Linda both grew up in Nebraska and wanted to bring their family, now including a second daughter, back to the Midwest. They had the idea to bring drive-through coffee, newly popular on the West Coast, to Omaha.
After making the move, the Eckleses remodeled their first location—a 650-square-foot former Chinese restaurant– in 1998 with $40,000 (more than $80,000 in today’s terms) in savings.
“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,” he recalls.
Eckles was worried about running out of cash. It had happened in three of his prior businesses including an A&W franchise, a café and a small Iowa radio station. So he wasn’t going to mess around this time.
He and Linda worked every shift for the first four months, with Linda stamping a smiley face sticker on the lid of every coffee lid from day one. (Says Eckles of his wife Linda, who declined to comment for this story: “We learned much about ourselves and how the business worked. For example, we quickly learned that Linda was much better in the window than I was. While I understood the business, and the need for this or for that, Linda actually loved seeing and talking to the customers. They mattered to her, and as a result, eventually, she mattered to them.”) After about four months the first Scooter’s began breaking even and the couple hired their first employees.
In 2000, the Eckleses are pictured at one of their early stores inside a mall in Omaha, Nebraska.
Scooter’s
About three months later, the second location opened. By the fifth store, the Eckleses had borrowed $150,000 to build two small coffee kiosks at a nearby mall, but they almost went belly up as construction costs soared.
“Early on in business, success is very fragile,” says Eckles. “It’s easy to make a mistake that’s so big that it’s not recoverable.”
The couple decided to franchise their business in 2001 at the behest of friends, family and customers who inquired about opening their own location. It helped that opening a new Scooter’s was much cheaper than opening a typical fast-food joint. Most locations are 644-square-foot kiosks with a drive-through window, not the traditional two-acre sites needed for other restaurant franchises, which makes them easier to build and finance. And Scooter’s locations that can take over space at the end of a strip mall can be even smaller.
When M-One Capital invested in 2018 at the suggestion of Buffett, the Eckleses shifted the business model. “We gave folks stock in our company and paid out 75% of taxable income to our investors as distributions. At first, that didn’t amount to much, but over the years that number became a significant number,” says Eckles. “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.”
They ended the 75% profit payouts for their early investors, using a chunk of the M-One Capital cash to reward the friends and family that had backed them at the beginning of Scooters, “with the understanding that,” as Eckles describes, “going forward, we would just distribute money to cover taxes. The rest, we invested in people and facilities and equipment. In other words, growth.”
Says Joe Thornton, who became Scooter’s CEO in 2024, “Our growth story is one that people will admire over time.” The company has been helped by the relative lack of competition in its core territory in the Great Plains. The company is currently the next biggest competitor to Dutch Bros. but Arkansas-based 7 Brew, another drive-through chain, is nipping at Scooter’s heels.
“It raises the question of ‘what happens if and when Dutch Bros and 7 Brew start moving into Nebraska, Oklahoma, Kansas and Iowa?” says Jeffries’ Barish. “Scooter’s could see some pressures with competitive intrusion.”
Even without expanding their number of locations, there is room for sales growth: the average Scooter’s kiosk-format store has just under $1 million in annual sales while Dutch Bros clocks in at $2.1 million per location and 7 Brew at $1.9 million.
The top quarter of Scooter’s franchisees have net income margins topping 20%. The average location’s net income margin is closer to 15% (and Dutch Bros and 7 Brew don’t report their locations’ net income margins). Eckles says store profitability remains his top priority.
Or as Eckles puts it: “900 is just a number on the way to another, larger, number.” .
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Source: https://www.forbes.com/sites/chloesorvino/2026/04/25/from-coffee-kiosk-to-billion-dollar-business-how-scooters-became-one-of-americas-top-franchises/
