Coffee Franchise Opportunities: Does Starbucks Franchise?…and Other Coffee Business Franchises

Does the aroma of brewing coffee transport you to a sensory paradise? Is a steaming latte your idea of comfort food? Do you consider coffee its own separate food group? If you answered “yes” to any of these questions, then a coffee franchise may be for you! When someone says “coffee shop,” the name that most often comes to mind is Starbucks. So it’s only natural that coffee connoisseurs and entrepreneurs will immediately want to know if this wildly successful java chain offers the opportunity to buy Starbucks franchises.

Despite its seemingly ubiquitous presence the Starbucks brand does not franchise or sub-franchise its operations. Rather, the company operates most North American Starbucks stores. The exception to this is situations in which Starbucks will enter into an agreement with companies that may provide physical locations that might otherwise not be available to Starbucks, such as space in airports, grocery chains, hospitals, and on college and university campuses. In addition, in certain areas, Starbucks may enter into an agreement with a group of individuals or a company in which the company or group is permitted to manage and operate Starbucks outlets within a certain region.

The unavailability of Starbucks franchises, however, should in no way dissuade the coffee lover from pursuing a coffee franchise business opportunity. There are numerous coffee companies that do, indeed, franchise their operations, and many even venture beyond the traditional coffee bean to provide gourmet coffees, food options, and even catering services.

The following represents a partial listing of the many coffee franchise opportunities available to java lovers everywhere.

Caffino

With its “60-second guarantee,” Caffino is a drive-through coffee bar that first opened its company doors in 1993 in Napa, California. Franchising since 2003, Caffino currently has 27 locations in 3 states, and it is actively expanding. Caffino prides itself on roasting its coffee on-site using only the world’s best coffee beans, Arabica Grade 1. The startup cost for a Caffino franchise ranges from $212,900 to $373,000.

Beaner’s Coffee

Founded in 1994 and franchising since 1999, Beaner’s Coffee offers a variety of the coffee beverages made from flavored, decaf, signature, organic, and fair trade beans. In addition, Beaner’s goes beyond coffee service and ventures into the world of sandwiches, salads, and baked goods. Beaner’s carries a startup cost of $240,000 to $300,000 and offers the option of express or kiosk franchises. Beaner’s is currently seeking franchisees nationwide, and for its franchise owners, exclusive territories are available.

Woody’s Chicago Style

Coffee and hot dogs? Not your typical combination, but Woody’s Chicago Style has no problem combining the two. Begun in Honolulu, Hawaii, Woody’s Chicago Style is a hot dog, beverage, and coffee cart business that has been franchising its operations since 1991. While franchises are not currently available in every state, Woody’s is seeking franchisees in Arizona, California, Colorado, Hawaii, Kansas, Missouri, Montana, Nebraska, New Mexico, Nevada, Oklahoma, Washington, and Wyoming. And with a price tag ranging from $54,100 to $464,000, Woody’s just may be the right option for your pocketbook!

Scooter’s Coffeehouse

With franchise opportunities existing both in the United States and worldwide, Scooter’s Coffeehouse ranked #26 in Entrepreneur.com’s 2007 listing of the top new franchises. In business since 1998 and franchising since 2002, Scooter’s is a specialty coffee franchise that also serves up brewed coffees, espressos, flavored coffees including sugar-free options, teas, and a wide selection of smoothies. Startup cost ranges from $60,000 to $410,000, and, in addition to training, Scooter’s offers significant ongoing and marketing support, including regional advertising, national media, field operations/evaluations, purchasing cooperatives, newsletter, meetings, and a grand opening.

Dunkin Donuts

Who doesn’t recognize this household name in the coffee and donut industry? Established in 1950 and franchising since 1955, Dunkin Donuts now boasts more than 7,000 stores worldwide, including 1900 locations in 30 countries. In the United States, more than 5,200 Dunkin Donuts locations dot the landscape in 36 states. Based on years of operation and experience, Dunkin Donuts has a 5-phase franchising process, which begins with an application, credit check, and criminal background check, among other things, proceeds through several steps including an interview, business plan development, application approval, training, site location, and financing, and ends with restaurant construction and crew training. To ease financing costs, Dunkin Donuts has partnered with preferred lenders who offer franchisees flexible financing options, including Small Business Administration (SBA)-backed loans for certain transactions.

In addition to the five coffee franchise opportunities briefly profiled above, no fewer than twenty franchise opportunities exist for entrepreneurs seeking to turn their coffee passion into a profession.

From Café Ala Carte cappuccino catering service and Grabbajabba gourmet coffee and European sandwiches to It’s a Grind Coffee House and Maui Wowi Hawaiian Coffee and Smoothies, numerous coffee franchises ranging from low-cost to high investment are available for serving up that morning cup of Joe, mid-day sandwich on the run, or afternoon tea or smoothie.

So next time you walk into your neighborhood coffee shop to fill your latte craving, imagine providing that same satisfaction to other coffee lovers like you…and even better yet, making a living at it!

Are Coffee Franchises An Easy Business Opportunity?

Coffee franchises are springing up in almost every town and city worldwide. It is a tough business to be in when you consider the long hours, health and safety regulations and numbers of staff required.

When potential franchisees first look at this business they are blown away by the profit margins. Surely any business that has such high margins built in must be profitable?

In reality it is not as simple as that. For a coffee shop to be truly successful it needs to generate a huge number of sales to cover the fixed costs. The fixed costs are very high primarily due to the fact that business premises are required in shopping malls and busy high streets. This means that over half the turnover goes towards covering the rates and rents.

A coffee franchise needs a higher number of employees then most franchises due to the number of hours the business has to be open. The majority of turnover is done either before work starts, at lunchtimes, after working hours and during the weekends. Unlike some other franchises this is definitely not a nine to five business!

Staff costs are very high and then there is the problem with keeping them. Most employees in a coffee shop franchise are only doing this work until they manage to get a better job! This means that there is a constant turnover with staff and this can be a nightmare to manage. Most new members of staff will require some training.

A coffee franchise usually sells a lot more then just coffee. Most also supply sandwiches, cakes, pastries and other snacks. On a busy day it is far too easy to run out of supplies too early whilst on a quiet day some of the food might have to be discarded. The regulations involved with selling food to the public means that detailed records have to be kept.

Competitive forces are also at play with a number of new fast food franchises entering the scene as well as speciality sandwich makers. These are all conspiring to take away some of the regular trade from the coffee franchises.

It is still possible to make money with a coffee shop franchise and to achieve this needs careful planning and the right strategy. Premises must be found that are on busy thoroughfares for the right terms.

Only the best coffee should be served. Not all coffee shop franchises adhere to this simple rule! Some even restrict you into buying coffee beans only through their own supply chain. This can be troublesome especially if the tastes in your area are varied and different.

The ideal solution is if there is a right balance between the coffee you have to buy from the franchisor and the flexibility to source it elsewhere. This also helps to make the business more profitable as most franchisors charge a premium compared to sourcing and buying quality coffee beans elsewhere.

If you are prepared to work unsociable hours and have people skills especially with regards to dealing with employees, then a coffee shop franchise might still be the right business opportunity for you.

Improve The Quality Of Your Franchise Business With Multi-Unit And Multi-Concept Franchises

Multi-unit and multi-concept franchising both provide opportunities for fast, efficient growth. Franchising is an obvious consideration for individuals who naturally have that entrepreneurial spirit. You might be wondering what is means to have an entrepreneurial spirit.

Are you self-motivated? Do you dream of building a business with your two hands? Do you struggle as an employee, constantly feeling like you could improve the company if someone would hand over the reins? If one or more of these questions provokes an affirmative answer, you are an entrepreneur who is ready to find a track into the business world, possibly with a business franchise.

Most importantly, you do not need a college degree or years of experience to take advantage of this increasingly emergent business prospect. And, with the right information, you can successfully operate more than one franchise business.

What is Multi-Unit and Multi-Concept franchising?

Multi-unit franchising occurs when a franchisee operates multiple stores from one franchisor within a specific area. This type of franchising is popular, for instance, in the food industry. Entrepreneurs seeking a restaurant franchise will find a bounty of options. Similarly, multi-concept franchising involves more than one brand and works best if the concepts are related. For example, children’s hair care and family portrait studios are two concepts related enough to create synergy for each another.

Challenges of Multi-Unit and Multi-Concept franchises

As with any rewarding investment, there are a few challenges to take into account when considering a multi-unit or multi-concept franchise. First and foremost, choosing a good location is vital. Consider the surrounding area of a potential outlet. Going back to the restaurant franchise example, you might ask, are there plenty of retail businesses nearby? Obviously, an eatery would do well if located near a shopping center or strip mall where guests may be inclined to take a food break.

Another challenge common to first-time franchisers is micromanaging. Certainly, you have a vested interest in how each store functions but much of the responsibility should be placed on an infrastructure of managers you hire.

These individuals are responsible for the everyday operations of their stores and should be trusted to run these businesses as you would if you were working there each day. Hire managers to serve as an extension of you. They should believe in the franchise, working toward its success and most importantly, its growth. This is where you meet the first advantage of a multi-unit franchise business. If managers see the potential for growth, they consider themselves as being on a career path. The benefit for you here is that you are much more likely to have a dedicated management team for the long term.

Also, allowing each manager to assume responsibility of store operations allows him/her to put personal touches on that particular location. This gives the store the “feel” of a small business franchise, something most customers appreciate.

Of course, staffing is always problematic, but you can improve it by treating your managers and their staff members well. Again, growth potential encourages employees to stay with your franchise because they see a career path. They are also far less likely to seek employment elsewhere if they feel that their services are valued and their opinions respected. Many multi-unit and multi-concept franchisees meet with their managers regularly. Some even set up voluntary focus groups for subordinate employees to give them a chance to express any concerns.

Advantages of Multi-Unit and Multi-Concept franchise businesses

With the challenges come advantages that make multi-unit and multi-concept franchising worthwhile. One key advantage is that the risk is absorbed by several units or brands. With multiple stores, you do not have all your eggs in one basket, so to speak.

For example, if a local government suddenly plans road construction near one of your stores, sales will inevitably dip. Fortunately, your remaining outlets will not suffer. In fact, some of the business may simply be diverted to one of your other locations. Moreover, with a multi-concept franchise, you can spread the risk over several brands. If you operate a realty franchise, for instance, and the housing market experiences a low, it is unlikely that all stores and all brands will experience down time in the same period.

Furthermore, you will have access to more cash flow. Many multi-unit franchisees, for example, use the cash flow from other units to expand with additional units. And, the financial benefits do not stop there. You also have the option of reducing overhead costs by spreading them over several outlets, also gaining economies of scale.

In short, with multi-unit and multi-concept franchising, more capital becomes available. Meanwhile, franchisees running a single-unit are immersed in the details of managing a small business franchise.

Additionally, multi-unit franchises provide efficiency because of their potential for shared labor. Many employees are willing to take shifts at other locations, if needed; thus, the costs of hiring and training new personnel decrease. You also save money in other areas such as internal warehousing, distribution and advertising costs. If you operate a multi-concept franchise, you are far more likely to acquire special location and lease considerations from landlords. Most landlords prefer to work with multi-concept franchisees because they can subdivide larger areas. Your benefit is that they provide accommodation for all of your brands.

Building an Infrastructure for your franchise

First, consider any skills you may have. As mentioned, the most important attribute of a successful franchisee is an entrepreneurial spirit. However, if you have a degree in accounting, you may want to consider what you have to offer as you plan the infrastructure.

When planning your infrastructure, which should be designed to umbrella all units and brands, it is important to bear in mind how many staff members you will need to launch verses the number you will need to grow.

Starting with a large infrastructure will help the launch go much more smoothly. Otherwise, you may end up with a few people scrambling to meet the demands of a new business franchise.

However, there are significant downfalls to this method. For instance, having too many people in your infrastructure can lead to a breakdown of communication. Also, once all units and brands are up and running, you may find the costs of maintaining a large infrastructure to be too high and cutting back on personnel can reduce morale among remaining employees. Of course, the best way to solve this dilemma is to carefully plan and build the infrastructure slowly.

Choosing the best franchise opportunities

It is important to remember that there are many franchises for sale in today’s marketplace. Still, not all franchisors are equipped to support multiple units. This does not necessarily mean the franchisor is unsuccessful. Instead, it may simply mean that there is limited demand for a particular brand in your area. Or, the structure of the store might simply be geared toward a single-unit franchisee. This explains why it is always best to thoroughly research a franchisor before any agreements are made.

If you are considering a multi-concept franchise business, remember to carefully review the franchise agreements. Make sure your definition of a competing business matches that of each of your franchisors.

Most importantly, keep in mind that there are plenty of opportunities at your disposal. It is imperative that you research each prospect before investing your valuable time and money.