Start-up cafe perks along, even without java

On frigid midwinter mornings, the Amazon Cafe, with its tropical motif and toucan sign, is a warming sight to commuters riding the escalator up into the lobby of the Centre Square office tower from the dank subway concourse.

Trouble is, although cafe means coffee in several languages, don't ask for a cup of the house blend at Amazon - at least not in this high-traffic Center City lobby.

"We don't sell coffee here; we can't sell coffee here," said Nick Militello, 34, who opened the Centre Square franchise in November 2002. "I must get that question at least a half-dozen times each morning."

The one-word reason why is Starbucks, the Seattle-based java empire, which opened in Centre Square a few months before Militello with a lease that barred competition from other coffee vendors.

But the short answer is not the whole answer, and Militello is first to reject the Starbucks-as-evil-monolith stereotype.

"I can't blame them. If I had been a little less green and gotten here first, I would have done the same thing," Militello said of the no-compete clause, which makes him unique among seven Center City Amazon Cafes in not having "Amazon's blend" coffee on the franchises' regular menu of fruit smoothies, salads, sandwiches and snacks.

Call it the continuing education of a suburban high school swim coach who decided to enter one of the region's most competitive markets.

Militello grew up in Fort Washington in Montgomery County . He went to Temple University and Montgomery County Community College , and earned a bachelor's degree in education at Chestnut Hill College .

But even as he graduated, Militello realized he was passionate about coaching swimmers - not teaching students.

Militello, who had started his own housecleaning company to earn money in college, also discovered he liked "working for myself." With four employees and 65 customers, Militello realized he could earn a living and still have time to coach at his alma mater, Springfield High School in Montgomery County .

Eight years later, Militello's cleaning business was thriving. But, upon turning 30, he became health-conscious. He remarked that "there are no juice bars in Philadelphia ," and a friend of his nephew told him about his neighbor, Alan Kabinoff, who founded the Amazon Cafe chain in Philadelphia in 1998. In August 2001, Militello met Kabinoff to discuss opening a Philadelphia franchise.

Though a born-and-bred suburbanite, Militello was not put off by the prospect of starting a business in the big city: "I love everything about this city," he said. "I'm very optimistic... . The only way for it to become strong is for people to go back to the city. You create businesses and jobs, and the rest will follow. I only created five or six jobs, but it's something."

That attitude among small entrepreneurs is something city officials have encouraged with mixed success. "It's hugely important" for the city's future, said Paul R. Levy, president of the Center City District. "We need small businesses and business people who can start up, and expand, and grow into other spaces. The small-business people have been badly hurt by Philadelphia 's tax structure; it's very difficult for them."

Militello worked the rest of 2001 developing his business plan and arranging financing. Amazon Cafe requires a $29,500 cash franchise fee from first-timers, and advises that it takes $127,500 to $218,500 more in capital to open, depending on location, rent, inventory, equipment, and related start-up costs.

Kabinoff said he and Militello looked at several potential sites, but they remained attracted to Centre Square - despite the coffee sales ban. Militello liked the location and heavy foot traffic.

A manager at the Starbucks in Centre Square said company policy prohibited him from commenting, and he referred questions to Starbucks' corporate office in Seattle . Corporate officials could not be reached for comment.

Although Militello says he would still love to be able to sell coffee, he is satisfied earning a comfortable living - and with having time to continue coaching.

"I really am gratified by the loyalty customers show to me even without being able to sell them coffee," Militello said. "Nothing makes me happier than when people come in here with a Starbucks cup and want something to go with their coffee."