WATERLOO - After five years at her 630 Sycamore St. location, Penny Franke was looking for a new location for her Bead Happy store.

She wanted a bigger place. A place with more drive-by traffic. She and her new husband, Daniel Franke, considered, for a time, moving it to University Avenue. They briefly considered moving it to Cedar Falls.

That's when it occurred to Franke: She didn't want to leave downtown Waterloo.

She wanted to find a building a building with character, not a space in a strip mall.

"And I was always just a firm believer in staying downtown," Franke, 39, said.

"I remember feeling very sad when Walker's moved out of the downtown area after being down here for so long," Franke said. "I felt like if only existing businesses would hold on, downtown is going to become a fabulous place to be in the near future."

That's when Franke found the space in the Russell Lamson Building, at 209 W. 5th St., where Captain Max Chocolates used to be. Bead Happy opened for business in that space on March 1.

Bead Happy sells ready-made jewelry, as well as the ingredients to make your own. Franke provides work space, and even classes, for people who want to make their own jewelry.

Franke's part-time employees work for beads, not cash.

"It's kind of a destination shop," Franke said. "If you are a bead lover, you will travel."

Franke tells the story of a friend who was flying back from Europe, seated next to an African woman on the plane. They started talking, and Franke's friend said she was going to Waterloo, Iowa. The African woman responded there was a great bead store there she had to visit.

Franke gained between 800 and 1,000 square feet of space making the move, including a full kitchen. She used the extra space to add a separate party room, where groups can hold beading parties.

The space also came with a full kitchen. "I just felt like I had to do something with it," Franke said. So she added a coffee bar, that she calls Bean Happy, and bakes pastries daily. "Now, some people come in just for the coffee."

The large windows, and all the natural light they let into the store, was a big factor in her choosing that location, Franke said. She had hoped to buy a space, but liked 209 W. 5th St. enough to settle for leasing.

Franke started beading after her first husband, Daniel Horan, died. The rosary bracelets she made in his memory quickly caught on with people.

"And that next week, my phone starting ringing for those bracelets," Franke said. "And the next week, even more. Soon, I had retail stores selling them for me."

At the time, Franke traveled to Minneapolis for her beading supplies. As her bracelets became more popular, her trips to Minneapolis became more frequent.

"And I had the thought about opening a store," Franke said. "But that thought seemed so overwhelming. Just me, a widow, and her two small children."

Franke made the leap to opening a store based on what she described as divine intervention.

"This is a true story, what happened next," Franke said. "This woman's face came into my mind, and God told me to go into business with this girl," Franke said. "And I didn't even know who she is. And then it came to me."

The face was that of a woman who owned a gift store in downtown Waterloo, Every Season, that Franke had visited once. Franke said she called the woman, told her the story and the woman asked her to come to the store as soon as possible.

"She met me with tears in her eyes, and said she and her husband had been praying for two days what to do with this store," Franke said.

Franke opened her business inside the gift store, until the owners moved a year later.

Franke expanded her bead business to take up the whole store, and dropped the gifts.

As much as Franke liked that building, she didn't like the location. She wanted a place with more exposure.

She's confident she found it and is happy with the move.

"I know that Bead Happy wanted to expand and include a coffee shop," said Terry Poe Buschkamp, executive director of Main Street Waterloo, "and I also think they're taking advantage of some increased traffic near Galleria De Paco."

Buschkamp said the business closings in downtown are outnumbered by the business openings. So in that sense, Franke is not alone in being part of downtown's solution and not part of its problem.

Buschkamp also said that Bead Happy's old space has already been leased. The Law Offices of Kay Kober are moving into it.

"Just being a Waterloo girl, I want this area to thrive," Franke said. "There's so many lovely people in Waterloo, and such faithful customers."

Contact Jeff Wilford at (319) 291-1423 or jeff.wilford@wcfcourier.com.