Of course, as Caribou grows, a very large competitor in Starbucks looms, with its close to 8,000 domestic units. "You do have to find a way to differentiate yourself," Coles admits.

Caribou does this, in part, with its physical stores that are designed in a lodge style, with wood and stone finishing. Units also have children's areas and wireless Internet connections.

One goal that the company has is to increase the number of drive-thru locations in the chain. "We're adding them everywhere we can," Coles says, explaining that consumers will "go a mile more to get to a drive-thru."

Besides increasing its real estate footprint, Caribou, which went public last year, is also ramping up its licensing business. The chain became the official coffee of Life Time Fitness gyms, the brand is planning to release an ice cream for sale at stores on a regional basis and Coles says he expects to announce a national deal next month with General Mills.

As Caribou has grown, its same-store sales have leveled out. Units were up 6% year-over-year in 2005, up from 8% the previous year and 3% in 2003. However, the chain was not as fortunate last month, when its comps dropped 1%.

A new market for the chain this year will be the Kansas City metropolitan area, says Coles.