Diedrich Signs Deal for 50 Coffeehouses

Diedrich Coffee Inc., moving to bolster its presence in Southern California, said Tuesday it has signed a franchise agreement with M&P; Coffee Ltd. to open 50 coffeehouses in eight counties in the state, including portions of Orange, Los Angeles, Riverside and San Bernardino counties.

The agreement also calls for M&P; to open Diedrich coffeehouses in Ventura, Santa Barbara, Kern and San Luis Obispo counties.

It is the Irvine-based company’s third agreement in the last year to expand its operations in Southern California. Diedrich now has 28 outlets in Orange County and two each in Los Angeles and San Diego counties.

In May, Diedrich announced that California Coffee Co. would be opening 80 franchised Diedrich coffeehouses in the Los Angeles market. Earlier, Diedrich signed an agreement with some Taco Bell franchise operators to open 50 coffeehouses in the San Diego area.

In all, Diedrich has various development agreements in place to bring the total number of units nationwide to 477. The company hopes to open 1,200 to 1,500 units in the next five to seven years.

Tim Ryan, the company’s president and chief executive, said Tuesday that the deal with Studio City-based M&P; solidifies the company’s presence in Southern California as it moves to secure the No. 2 ranking behind industry giant Starbucks Corp.

“Now we’re in San Diego and all the way up,” Ryan said. “We are going to build out pretty aggressively.”

M&P; Coffee President Howard Mangen created the new company specifically to establish Diedrich franchises. Mangen also operates 11 Popeye’s Fried Chicken restaurants and previously ran several McDonald’s Corp. franchises. He said he plans to retain the Popeye’s franchises.

His company has already begun scouting potential sites for the new units, at least five of which will be in Orange County. M&P; also has an option to develop more beyond the initial 50.

Earlier this year, Diedrich also acquired Coffee People Inc., a Castroville-based specialty coffee chain. Coffee People owns the Coffee People and Coffee Plantation chains of coffeehouses in Oregon and Arizona and the 281-outlet Gloria Jean’s coffee retailing chain.