It would be remiss of me to have a coffee blog without writing about coffee franchises at all. So that’s what we’re going to do today. Today is all about the coffee business and what you can expect from a coffee franchise. We’ll also look at some of the more popular coffee franchise opportunities and what kind of investment you might make in order to start one of your own.
But first a little bit about the franchise business model. At the most rudimentary level, a franchise is a way of piggy backing upon a successful business model that has been proving in the market. Probably the most well known franchise is McDonalds. Another very popular franchise is Subway, each of these franchise models have tens of thousands of franchisees. The franchise model became extremely popular in the 1930s when it was introduced in the fast food restaurant business, and it has since grown from then with the United States still leading the way especially in innovation of this business model.
There are 2 main points that make a franchise profitable and viable and this would be especially true with any coffee shop franchise that you might be considering investing in. The first thing to look for is whether the business has a profitable track record. The further you go back looking for consistent profitability the better. The other thing to look for is to ask yourself whether the business is easily duplicated. This is more subjective, but understanding the most popular business franchises should give you an idea of the key points to look for.
Gourmet coffee franchises
As far as a gourmet coffee franchise is concerned or any coffee franchise for that matter, the answer to the second question whether the business can be duplicated is usually a yes. The biggest concern is whether the business is consistently profitable. Obviously, a Starbucks coffee franchise would be a slam dunk but unfortunately as of this writing, Starbucks doesn’t offer the franchise model.
Another concern of course is the price. The price of coffee franchises can vary widely, and most often, a price is indicative of the success of the business. So the more it is the more successful that franchise has been. As a general rule of thumb. You can expect to pay anywhere from the thousands and on up into the hundreds of thousands for coffee shop franchises. And with coffee franchises, you will need to determine what type of franchise you are looking for. Will it be a coffee shop franchise, or a coffee vending machine franchise or coffee supplies franchise or even a commercial espresso machines franchise?
The most common of course and perhaps the majority of my readers here are looking for the coffee shop franchise model. If you’re looking for a piece of Starbucks, you can get in with Seattle’s Best coffee franchise opportunities. Starbucks now owns Seattle’s Best and operates that division as a franchise. The start up costs are around $250k to $450k with a royalty fee of 5% to 7% and an advertising fee of 1%.
Some specific coffee franchises to consider
Another coffee shop opportunity is with It’s A Grind Coffee House. The fees for this coffee franchise are around $300k total start up costs, and their royalty and advertising fees would be expected to be similar to Seattle’s Best. The best advice I can offer if you’re interested in coffee franchises is to check out the coffee company’s website and see if you can’t find information on franchise opportunities or perhaps contact their investor relations department. Another great place to look for coffee franchises if you are not sure what type of franchise you want is to visit your local library. I have found librarians to be amongst the most knowledgeable and helpful folks I have met.
And remember, if this information has been helpful and you end up with profitable coffee franchises, I’ll be happy to take a 3% finder’s fee per annum ;O)