How Much Does it Cost to Start a Coffee Franchise?
Last Updated: December 27, 2021
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Buying a Coffee Franchise Rate Quotes #
Coffee is one of the most widely loved drinks in the world, prized for its aroma, taste, and the amazing way it makes you feel. For many, a day without coffee is a day that never began.
With so many people drinking coffee every day, you've probably considered this the perfect business, especially if you're one of those people who can't function without your own cup of magic brew every morning. Of course, starting a franchise requires careful thought about the pros and cons, and having a good idea of the full costs you can expect.
What You Should Know about Owning a Coffee Franchise #
Coffee is both literally and figuratively hot, offering enormous opportunity for entrepreneurial types eager to join the world of small business ownership. Before choosing a franchise, you need to decide what type of coffee shop you want to run. Are you interested in a truck or cart that does little more than sell coffee? Or, would you like a café setting with seating for customers? Maybe a drive-thru to grab people in a hurry to get to work? These details determine the type of enterprise you open and play a significant role in determining your overall costs and investment.
Pros of Owning a Coffee Franchise #
The main benefit of owning a franchise is the partnership it provides as regards brand recognition and working with a proven business model. With coffee being such a popular beverage, coffee franchises are a hot investment. Your customer base is built-in, and the franchise supports its franchisees with branding and a business model, because your success is also in their best interest.
Points to Consider Before Buying a Coffee Franchise #
Before you purchase a coffee franchise, you need to consider three main points: the investment, finding your space, and whether you'll sell products besides coffee.
The investment, i.e. the cost of the franchise, is significant. In addition to paying for the franchise license, you also need to budget for both the cost of your space and all of the necessary equipment. In general, you should expect it take a year or more before your investment begins turning a profit.
You also need to decide whether to buy or lease a space. Most people opt for leasing, as it has a much lower initial cost. Your price depends on the size of the space. Whether you lease or buy, pricing is determined by square footage. Location also plays a role, in terms of both where in the country you are and your location within your community.
Finally, you must determine whether you will sell products in addition to coffee. Most shops include some food items, such as donuts and other pastries, breakfast sandwiches, smoothies, teas, and cocoa. Of course, much of this is determined by which franchise you choose.
Price of Opening a Coffee Franchise #
Prices for a coffee franchise vary dramatically, depending on the type of franchise you buy. One that serves coffee alone runs between $60,000 and $550,000. This cost includes equipment, licenses, and the cost for your space. A franchise that serves additional items runs between $100,000 and $650,000. The bigger franchises cost as much as $2 million.
Example prices include:
- A kiosk or mobile food truck ranges between $50,000 and $100,000
- A shop with seating ranges between $80,000 and $250,000
- A shop with seating and drive-thru ranges between $80,000 and $275,000
There are numerous costs in addition to the franchise. These include:
- Espresso equipment ranges between $3,000 and $12,000
- Dishwashers and cleaning equipment cost between $1,000 and $3,000
- Flooring prices vary but average around $2,500
- Ceiling and painting will run you around $4,000
- Air conditioner prices range between $1,000 and $4,000
- Crockery and the till cost between $500 and $4,000
- Accountancy, solicitor, and insurance will run you around $6,000
- Marketing prices vary dramatically depending on location and the level of advertising you choose, from $150 to as high as $3,000
- Your opening stock costs around $4,000
In addition to the initial startup costs, you have recurring costs. If you buy a franchise, the company typically collects a variety fees or royalties in exchange for the use of their brand name. The royalties collected help pay for advertising expenses that can hugely benefit your business.