Now, Blank Street Coffee is shifting its focus from low costs to subscriptions for growth.

• In three and a half years, Blank Street Coffee has expanded to 74 coffee shops in New York City, Boston, Washington, D.C., and London.
• Vinay Menda, co-founder of Blank Street, predicts that the company's new subscription program may eventually have 30% to 40% of its customers.
• The program, comprising approximately 5,000 members, offers weekly drink packages priced at $8.99 or $17.99 for 14 drinks.

New York City has been overtaken by Blank Street Coffee's shops, which attract customers with affordable lattes and cold brew.

The upstart chain is now offering a subscription program to attract more consumers looking to save money on their coffee budget.

Approximately 5,000 people have become members of the Blank Street Regulars program, while an additional 4,000 individuals are waiting to enroll.

Over the past ten years, startups have increasingly relied on subscription models to secure consistent revenue, which has made their businesses more appealing to investors and increased their valuations. Similarly, larger companies have started offering monthly subscriptions to attract customers seeking discounts. For instance, members of Panera Bread's Unlimited Sip Club pay $11.99 per month for unlimited access to coffee, tea, caffeinated lemonades, and fountain sodas every two hours.

Blank Street, which began as a coffee cart in Williamsburg, Brooklyn three and a half years ago, now has 74 locations across New York City, London, Boston, and Washington. The typical Blank Street location is compact, with limited seating and an automated Eversys espresso machine for making drinks.

According to PitchBook, the startup has secured approximately $100 million in funding from notable investors such as General Catalyst, Tiger Global, and a Warby Parker co-founder.

The company's valuation decreased from $218 million to $177 million by March, according to PitchBook. This decline in valuation is a common occurrence among startups due to the Federal Reserve's interest rate hike and the resulting economic concerns about a recession.

Despite its rapid growth and venture funding, Blank Street has faced criticism from some coffee drinkers. However, its affordable prices have attracted customers, especially during the 2021 coffee bean price surge, making $8 lattes more accessible.

In New York City, a Blank Street customer will pay $5 for an oat milk latte, which is below the $5.45 charged by Dunkin' and the $6.15 by Starbucks for comparable sizes. The chain's lower overhead costs, such as smaller square footage and fewer employees needed to make cappuccinos, enable it to charge cheaper prices for its coffee.

Subscription members of Blank Street can save more money on their coffee by paying either $8.99 or $17.99 per week.

The affordable plan includes basic drinks like teas, hot coffee, Americanos, and double espressos, while the costly option lets customers purchase a broader selection of beverages, including cold brew. To prevent financial losses and the fate of MoviePass, Blank Street limits the number of drinks per week to 14 and requires customers to wait for at least two hours before buying another drink.

Vinay Menda, co-founder of Blank Street, predicts that approximately 30% to 40% of its customers will eventually join as members.

He told CNBC that he never believed it would be the majority of customers.

To prevent coffee shops and baristas from being overwhelmed by demand, Blank Street has limited the number of Regulars.

Dan Hill, Chief Product Officer of Blank Street, stated, "As we expand our capacity and grow our stores, our desire to provide access to more people increases."

To accommodate those on the waitlist eventually, the chain is working to enhance its capacity at its locations by installing additional espresso machines.

In its London locations, Blank Street recently introduced Regulars, a program that allows customers to purchase any drink on the menu for £12, or approximately $15, with restrictions similar to the U.S. program.

According to Hill, the program already has a significant number of members. In the U.K., Blank Street faces intense competition from Pret A Manger, a well-known sandwich shop that also offers a coffee subscription program. However, Menda believes that Blank Street's version will appeal to customers who prioritize coffee.

According to Hill, the chain's flexibility in designing the program was due to its relative youth, and it pursued a subscription program over a traditional loyalty program because its customers desired an easy and fast way to reap benefits from frequent visits to its coffee shops.

Blank Street is considering expanding the program by introducing family and group plans, as suggested by Hill.