Xando Brews Ambiance, Coffee Cocktails In one corner of the room, customers sit on U-shaped settees eating grilled panini sandwiches and drinking mocha martinis. At nearby tables, couples drink espresso and make chocolate, graham cracker and marshmallow s'mores. Across the room, a college student surfs the Internet over a cup of coffee. This relaxed atmosphere is the essence of Xando, Coffee and Bar.

"Xando is a place to stay," says Steven Dobbs, senior vice president of development for the Stamford, Conn.-based restaurant. "The concept started with a place that you can go and hang out and you're not forced to get in and get out."

What began in 1994 with three bachelors opening a coffee bar in New Haven, Conn., has grown into 15 restaurants operating in seven states, with five more locations currently under construction and 10 in the design stages.

Xando is different from other coffee bars in that, although it specializes in coffee and coffee cocktails, the restaurant stays open for breakfast, lunch and dinner. Xando offers affordable meals, Dobbs says, but more importantly it's a place where people from all walks of life can go to relax.

"We offer coffee in the morning, and then we turn into a lunch and specialty-drink restaurant," Dobbs says. "In the afternoon, we sell a very select menu wit h salads, sandwiches, wraps, smoothies, coffee beverages with ice cream in them, and Italian sodas. The lighting and music change as the 4 o'clock hour approaches. At 4 o'clock, our liquor bar, which is hidden behind a mural, is revealed. We have signature coffee cocktails, specialty beer and wine, and a full bar, but we're not a beer and shot place."

Other than specialty drinks, Xando's signature food is fondue s'mores that are served to customers at their tables. Although Xando has a liquor bar in the evening, the restaurant targets customers of all ages, and even appeals to families with children.

The Xando atmosphere is designed to be friendly and inviting, Dobbs says. With an average size of 2,500 sq. ft., Xando locations have large picture windows as well as computer Internet hookups.

"We have a Mondrian-type of design with festive artwork," Dobbs says. "We use high-end fabrics and soft, natural materials that are very warm."

Every Xando location has the trademarked tube filled with coffee beans, but each restaurant has a slightly different design reflecting its neighborhood.

"We use consistent elements, such as slate floors and wood floors," Dobbs says. "We use faux painting on the walls, but that faux in South Beach (Miami) might be ice green or seafoam green, whereas the Bryn Mawr (Philadelphia) location needs a gold, brownish, warmer feel to it."

The Bryn Mawr location happens to be in a shopping center, but the company looks at all different types of locations when choosing sites, Dobbs says. Xando has restaurants in urban, suburban and industrial areas. When locating sites, Xando considers a host of criteria including traffic counts and demographic and psychographic profiles. Presently, the company is focusing on high-profile cities with ample retail development.

"We go in to own a market," Dobbs says. "We'll go into a market with three stores within a certain radius of each other. This way, the stores can share some of the operations and training."

Xando plans to have about 40 stores operating by the end of next year, with a 100% growth rate each year after that for the next three years. While Xando is competing with other coffee shops for prime real estate, it's not competing for business with other coffee shops, Dobbs says, noting that it's a completely different concept.

"The coffee industry and the restaurant industry couldn't figure out what Xando was," Dobbs says. "They said, 'Is it a coffee place? Is it a bar? They serve food?' We said, 'We're not going to get the customer for $18 or $20 for dinner. We're going to let them eat for $6 or $7 and have a cocktail or a beer, or roast marshmallows at the table.' We haven't competed with anyone."

Contact: Steven Dobbs, senior vice president of development, Xando, Coffee and Bar, 860 Canal St., Stamford, CT 06902; (203) 969-2269.

Retailer Serves Fruit Drink With Muscle After 52 years of success making hot dogs, Hot Dog On A Stick has decided to turn one sour fruit into another sweet venture. The inception of Muscle Beach Lemonade marks the first new concept in the company's history.

"We've always concentrated on Hot Dog On A Stick," says Fredrica Thode, vice president of the Solana Beach, Calif.-based retailer. "With Hot Dog On A Stick, our lemonade accounts for about 60% of our sales. In actuality, the lemonade has always been Muscle Beach Lemonade. It's just never been signed like that."

Hot Dog On A Stick has been serving lemonade since the early days of the business, which started out in 1946 as a freestanding store on the boardwalk of Muscle Beach, Calif. Hot Dog On A Stick has grown to over 90 locations in 14 states, with the majority of stores in California. The lemonade was so popular that Hot Dog On A Stick came up with variations of it using other types of fruit.

"You can do a lot with lemonade," Thode says. "We started experimenting with real fruit, adding strawberries, limes, oranges and things of that nature to the lemonade. We found that it was really good."

So good, in fact, that Hot Dog On A Stick decided to use it as the basis for a new, more upscale concept. The first Muscle Beach Lemonade store opened in October at Puente Hills Mall in City of Industry, Calif. Sales so far are exceeding the company's expectations, Thode says.

Muscle Beach Lemonade stands out from other juice bars because it uses lemonade rather than water as the base for all its juices, Thode says. The store also sells frozen slushes and smoothies. To tie in with the more sophisticated concept, Muscle Beach Lemonade serves grilled hot dogs with baked chips, rather than the battered hot dogs. Still, the fresh-squeezed lemonade is the main draw.

"We literally pound the lemonade," Thode says. "The girls stomp it, almost in the same way grapes are stomped for wine. Not with their feet, but with a stomper."

As with the Puente Hills Mall store, the majority of Muscle Beach Lemonade locations will be kiosks, or modular-style stores. The company also seeks some in-line stores, but these will be a combination of Muscle Beach Lemonade and Hot Dog On A Stick.

"We realize that this concept is going to grow, and it's going to grow slowly," Thode says. "But the capital costs are low enough that you can survive with that. In a kiosk it's wonderful."

Muscle Beach Lemonade will concentrate most of its expansion in Florida. The company plans to open a combined total of 28 Muscle Beach Lemonade and Hot Dog On A Stick stores next year. Six of the Muscle Beach stores will be in Florida.

"We think Florida makes a great deal of sense for us," Thode says. "There are a lot of people who live in California and have a home in Florida. We're very well known in California, so the name will be recognizable."

Although many Hot Dog On A Stick stores are in traditional regional malls, the company keeps its site options wide open.

"I would hope that we could go a little bit out of the box," Thode says. "We're very interested in any kind of entertainment center, stadiums, universities and airports. We'd love to do all of that."

Contact: Fredrica Thode, vice president, Hot Dog On A Stick, 777 South Pacific Coast Hwy., Suite 113, Solana Beach, CA 92075; (619) 755-3049.