By Carlo Versano

In 2013, Joshua Zad founded Alfred with an odd business plan for a coffee shop: the coffee would come second.

Zad, also the company's CEO, told Cheddar that his idea for an experiential, design-focused coffee house ー which is now right on trend ー was far outside the mainstream just a few years ago.

Borrowing from his background in commercial real estate, Zad took a "real estate perspective first" ー finding neglected neighborhoods or storefronts near popular destinations ー and set up shops with a "worn-in" and "cozy" look and feel, populated by baristas decked out in Rag & Bone aprons that have become Alfred's hallmark.

Specialty coffee has been a growing segment ever since Starbucks ($SBUX) convinced consumers it wasn't outlandish to spend $4 on a cup of joe. But it has mainly been the realm of hipster-run shops with Scandinavian minimalist decor ー outposts where baristas would focus a laser-like attention on each order.

Alfred turned that on its head, Zad said.

Alfred's aesthetic (its tagline, "But first, coffee", has become its own hashtag on social media) is a hit among celebrities and influencers on Instagram, owned by Facebook ($FB). Zad took it even further by selling a different kind of real estate: the shop's coffee cup sleeves. Those sleeves ー with design collaborations from Disney ($DIS), apparel brand Lululemon ($LULU), dating site Bumble, and local artists ー are now collectibles in their own right. And they're just another way to get people in the door ー the key for a volume business like coffee.

The fast-growing chain now has 12 locations throughout Los Angeles and Japan, with as many as 15 more on the way for L.A., according to Zad. That includes the Alfred Tea Room, which expands the concept for tea drinkers, a segment of the market Zad said has long been neglected.

"Coffee is having a moment," he said. "But tea is not far behind and is having a renaissance of its own."

For full interview click here.