The beans of operating a coffee franchise
Coffee is the world's second most valuable commodity after oil. Over 50 percent of Americans drink it everyday, making a coffee franchise a very profitable idea indeed. Or is it?
The coffee franchise has taken off in North America over the past decade, thanks to the sudden proliferation of coffee houses based on the European café. Starbucks, which is not a franchise, is partly responsible for this. Coffee is now a social - and for the caffeine-addicted, chemical - component of American life.
If you're debating a coffee franchise of your own, keep in mind that cost fluctuates with the brand you choose and the size of the organization you run. How large or small a franchise do you want? You can franchise a full café with sandwiches or keep it simple with an uncomplicated coffee kiosk.
A Barnie's Coffee & Tea Company franchise is one of the pricier choices and ranges from $202,000 to $350,000. Beaner's Gourmet Coffee is also somewhat costly at $225,000. These chains offer gourmet coffees and teas along with other specialty products. On the other hand, a Gloria Jean's Gourmet Coffee kiosk costs a much more modest $25,200.
The total investment, royalty fee, franchise fee, terms, availability of financing and franchisee qualifications all depend on each individual brand's franchise policy. The time required to get your coffee franchise operating also depends on the individual brand and size of the franchise.
Why does a coffee franchise sound so good?
- Small, low investment options such as express stands and kiosks are available and popular with customers on the go
- Coffee has morphed from an impulse buy into a necessity for many people
- You can offer a wide range of product choices and specialty coffees
- New trends in coffee include fair trade and organic, and coffee from different parts of the globe
- Market seasonal and holiday specialties; hot drinks in winter, cold drinks in summer
And then there are the grounds:
- Competition is fierce among coffee franchises, i.e. the battle against Starbucks
- Keeping the right hours for the right customers. Professionals and workers will line up for coffee at 6 a.m. and then again in the afternoon, but rarely at night. However, couple and students will happily sit in a café all evening
- Your labor costs increase the more 'gourmet' you go; customized drinks require extra training and manpower
- Some people consider expensive gourmet coffee a passing trend