The growing expansion of the franchise sector in recent years has proven that a franchise model is an excellent option for those interested in opening their own business. One reason is the support and training structure offered by the franchisor, in addition to operating a brand already recognized in the market… and Starbucks is a very recognizable brand.
The franchisee can count on the support of the franchisor, who already has an expansion plan and knows their customer profile as well as their products, production, distribution, sale process… basically, everything. The same goes for intelligence about competitor strategies, installation cost, point of sale, and other valuable data for the management of the company.
But keep in mind, you still have to abide by the franchisor’s set rules and regulations. A franchise is your business in a sense, but it’s not 100% yours to do what you please.
Why Invest in the Coffee Market?
The coffee franchise landscape grows more and more year after year since the United States is one of the largest consumers of coffee worldwide. Those who like coffee want to try a variety of coffees in different flavors, temperatures, etc.
Because of this, coffees that require some specialties and bring a hint of innovation have shown an increase in consumption.
To illustrate all this love, here are some coffee statistics:
Coffee Statistics in the United States
- In 2019, 64% of Americans aged 18 and over drank coffee every day. (NCA)
- Americans rank 25th for coffee consumption per capita, with an average consumption of 4.2 kg per person per year. (World Atlas)
- The USA ranks 11th among the countries with the highest caffeine consumption, with a rate of 200 mg per person per day. (Caffeine Informer)
- The average U.S. coffee drinker consumes 2.7 cups per day, with the average size of a coffee cup measuring 9 ounces. (The Motley Fool)
- More than 150 million Americans drink about 400 million cups of coffee per day or more than 140 billion cups per year. (The Motley Fool)
But, as with any type of business, it is important to research and learn as much information as possible before opening your own stores. If you are thinking about opening a Starbucks franchise, I have some news for you…
How Much Does It Cost To Franchise A Starbucks
You Can’t Open a Starbucks Franchise, But You Can License One
Unfortunately, Starbucks is not a franchise so therefore you may not outright own one. But it’s not exactly bad news. You can open a Starbucks as a licensee. The total investment is approximately $315,000 for your own licensed Starbucks store. (More on that for business owners below.)
Starbucks prefers licensing to keep control over the stores and the product’s quality. As a licensee, you would rent the Starbucks company brand for a licensing fee and would not own the store as a franchise owner would. For more information, click here.
Become a Starbucks Licensor
On the Starbucks licensing website, you can see that the company gives a hand to those interested. Store design, menu, equipment, training and support, food, promotions, and onsite visits are some of the help included in the licensing package.
However, this isn’t the most accessible or affordable option for everyone. You need to already have an attractive location where Starbucks would want to open and the resources to open and operate that Starbucks store… or multiple Starbucks locations.
Instead of a Starbucks franchise cost, there is a licensing cost. To open a licensed shop, you have to pay a fee of approximately $315,000. (You can think of that as being equivalent to a Starbucks franchise fee if there was one.)
Benefits to Owning a Coffee Shop
If you’re looking to open a Starbucks Coffee Company as your first business, or first major investment, here are some benefits mentioned in the Start My Coffee Shop guide by coffee shop owner, Shawn Chun. (It’s perfect for potential new franchisees of a coffee shop chain.)
You Can Open a Seattle’s Best Coffee Franchise
As stated on the Starbucks website, Seattle’s Best Coffee brand does “offer franchise opportunities to qualified applicants using a predefined set of criteria and focusing on multi-unit franchisees with a proven track record of success.”
How Much Does It Cost To Franchise A Seattle’s Best Coffee
$100,000 is required in available capital if you want to become a Seattle’s Best franchise as an initial investment. $181,835 is the minimum that Seattle’s Best Coffee expects its owners will need to invest in a new location. You will also need to share your liquid assets when you apply to have your own franchise.
The company itself provides some persuasive pros about investing in their franchise. Here are the 10 main points they make:
1. Brand recognition
A strongly recognized brand helps build a customer base from day one.
2. Operating systems
Established infrastructure provides the ongoing support franchisees need.
3. Be Quick to Market
4. Open Fully Equipped
5. Start Strong with Team Training
6. Receive Regional Support
7. Sell More
8. Get Answers
9. Flexible concepts
Seattle’s Best Coffee offers a full continuum of concepts to optimize operator profitability.
10. Best of the class menu
Everyday favorites, as well as seasonal specialties of the house, support all dayparts.
Franchising a Coffee Shop
Regardless of the type of business you decide to open, you as an entrepreneur must evaluate the time and money commitment to be successful. Including:
The location (or real estate) and structure of the building
Formatting a professional team
Purchasing the equipment, product quality, and services
In addition, be aware of the rules, regulations, and laws that you will need to abide by like health regulation, technical responsibility, smoking, and the accessibility of people with disabilities or reduced mobility.
Also, don’t get distracted by total revenue numbers. Many do. The expenses of running a coffee shop really add up, so you’ll want examples of other business owners reported profit by taking a look at Starbucks tax filings, for example. You want a profitable franchise in a prime location!
Today, more and more people want to consume unique experiences, not just products. Keep that in when opening a Starbucks outlet or coffee shop of any kind – you are not only investing in products, but you are also investing in culture, well-being, good conversation, etc.
In your opinion, what is one of the best franchises to invest in? For more on top franchises, click here. (Yes, number two on the list sells lots of coffee.) Where would you put a new store in multiple, new locations?
Find me on Instagram at @ChristinaAllDay and let me know if you plan on opening up a licensed Starbucks store… or maybe you’ve opted for what appears to be the cheapest franchise. Let me know if you’re jumping into a franchise opportunity like a local Starbucks or another lucrative business with retail stores.