How Much Does it Cost to Start a Coffee Franchise?
Buying a Coffee Franchise Rate Quotes
Get Free Coffee Franchise Price Quotes!
Americans are obsessed with coffee. In fact, a staggering 400 million cups are consumed in the U.S. each day according to a report from CNBC.com. With a commodity that popular it is no surprise that coffee shops are among the most sought after franchises by budding entrepreneurs.
When you open a coffee shop franchise, you’re paying a significant premium for, both, brand recognition and a proven business model. But, for those who can afford the initial investment, the earning potential is tremendous.
Cost to Start a Coffee Franchise
Initial startup costs for coffee franchises begin at around $20,000 for lesser known brands and range upwards of $2 million for the most recognizable names and locations.
A small part of that startup cost will cover what’s known as the franchise fee. Most coffee chains charge anywhere from $20,000 to $80,000 for the rights to use their name. That may sound like a lot. But, it’s really a small amount to pay for immediate brand recognition and a built-in customer base.
The vast majority of startup costs will go to leasing or purchasing a space, buying equipment, and licensing fees. In many cases, these costs total hundreds of thousands of dollars.
Below is a breakdown of the startup costs required to open some of the most popular coffee franchises:
- The Coffee Beanery: $62,000 to $550,000
- Dunkin Donuts: $358,000 to $2 million
- Gloria Jean’s Coffees: $278,000 to $675,000
- Honey Dew Donuts: $87,000 to $800,000
- Port City Java: $210,000 to $414,000
Cost to Own a Coffee Franchise
In addition to initial startup costs, there are also recurring costs involved with owning a coffee shop franchise.
The franchise company will collect ongoing fees called royalties in exchange for continued use of the brand name. The fees also help pay for the parent company’s advertising expenses, which directly benefit your shop.
Royalties can be charged by the week, month, or year. They’re generally anywhere from 6% to 12% of your gross sales. They’re required even if you’re not turning a profit. However, the vast majority of coffee shops are profitable businesses.
Benefits of Owning a Coffee Franchise
Don’t be discouraged by the hefty investment required to open and operate a coffee shop franchise. Coffee shop franchises are expensive because of the tremendous earning potential they offer.
Keep in mind that coffee is among the most actively traded commodities in the world. In the U.S. alone, coffee is a $30 billion industry. When you buy a coffee franchise you’re making a sound, long-term investment.
Compare Free Coffeemotive Franchise Information
Receive free information on top automotive franchise programs from knowledgeable consultants. Compare information and companies to find out about an automotive franchise that may be right for you. It’s fast, easy, and free! Start now!