If you’ve always dreamed of owning your own coffee shop, it’s time to stop and take the first step towards turning it into a reality. If the burgeoning rise of the coffee shop industry is any indicator, there’s a perpetually growing, universal demand for cafes and coffee shop franchises.
With more and more people opting to work from home (or their favorite coffee shop) the demand for cafes is likely to continue among everyone, be it the millennial youngsters, working professionals, artists, writers, or even the busy executives who’re looking for a cool, informal place to conduct their business meetings. Coffee is also an extremely valuable commodity that is treasured around the globe. Cafes of all shapes and sizes, ranging from the quaint neighborhood jaunt to the upscale branded coffee shops selling roasted coffee beans and merchandise apart from a mean latte, are witnessing a huge patronage!
If owning and running a coffee business has always been your passion, you can start either by building your independent coffee shop from scratch or by taking advantage of a franchise model that has less risk, thanks to its established brand and proven franchise business model.
To help you examine the potential of coffee shop franchise opportunities, we present a guide with an overview and some of the best examples of coffee shop franchises.
What is a Coffee Shop Franchise?
A coffee shop franchise is a license that authorizes a party (franchisee) to sell the products and services of the coffee shop under the same (franchisor’s) brand name and trademark. In addition, it allows the franchisee access to the business knowledge and information – processes, proprietary knowledge, trademarks, ongoing training and support, and vendor database (sourcing raw materials) – required to run the coffee shop.
Basically, franchising a coffee shop allows you to start with a solid foundation, rather from building from the ground up. By utilizing the brand name, systems, and processes of a coffee franchise, it can be much easier to establish a successful business quickly.
Why Should I Consider Coffee Shop Franchises?
Owning a coffee business through a franchise model is less intimidating and risky while simultaneously allowing you to be your own boss. In contrast, running an independent coffee shop would require stringent planning and deliberation, not to mention a sharp business acumen. This is especially pertinent in the initial stages, when you’re developing a business plan, brand, trademark, and a competitive differentiation strategy to set apart your brand from the increasing number of coffee shops sprouting in every neighborhood.
On the other hand, aligning yourself with a trusted coffee shop franchise brand would allow you to not only reap the benefits of a proven business model but also help attract customers by virtue of an established brand and trademark. When it comes to coffee shops especially, brands enjoy a loyal customer base, which can help attract local customers. Franchisors also provide support for site selection, interior design, training, advertising, and sourcing the best quality coffee beans from their trusted suppliers.
The trade-off is that you then must follow the brand guidelines set forth by the franchised brand, which limits the creative ability to build your own brand in the way you would like.
- Learn more about why you should consider buying a franchise: 10 Reasons to Buy a Franchise
Trends for Coffee Shop Franchises
The global coffee shop market is projected to witness a 4.1% compounded growth from 2019-2015, totaling US$237.6 billion by 2025. This is hardly surprising since the coffee shop culture has permeated throughout the globe, transcending cultural and geographical boundaries. In the United States and Europe – two significantly large markets – the coffee shop industry enjoys a combined share of 69.8%. In the United States alone, the growth of the coffee shop industry is expected to maintain the 4.2% momentum.
The coffee franchise industry comprises one of the largest segments of the food franchise industry. The industry alone constitutes 1.6 percent of the total US gross domestic product (about $225 billion) and is responsible for 1,694,710 jobs in the country, according to the National Coffee Association (NCDT). Needless to say, the country is crazy about its caffeine.
Coffee is no longer the cup of jet fuel you drink at the breakfast table. In 2017, less than half of coffee drinkers in America labeled traditional drip coffee as their drink of choice. Instead, more than half of daily-consumed coffee cups are classified as gourmet coffee. As a result, the NCDT added the category “Non-Espresso Based Beverages” to the association’s classification system. This category includes recently popular beverages including nitro cold brew and frozen blended coffee drinks.
THE COFFEE FRANCHISE INDUSTRY CONSTITUTES 1.6 PERCENT OF THE TOTAL US GDP (ABOUT $225 BILLION).
Not only are consumers opting for specialty brews, 46 percent of coffee drinkers are consuming more beverages prepared out-of-home, much to the benefit of the coffee franchise industry. According to recent statistics, most of these consumers are under 35-years-old and dictate the ebb and flow of the industry.
Coffee Shop Franchises Don’t Just Serve Drinks, But a Lifestyle Hotspot As Well
Apart from helping people bond and socialize, coffee shops also serve as the new work destination as they offer unlimited, free Wi-Fi. However it’s not just the working professionals who are thronging cafes. Youngsters who like to browse the internet, study, write papers, or simply hang out with their friends are driving up the revenues in coffee shops. Plus it doesn’t hurt that cafes are always introducing new and exotic flavors, savory treats, and fine desserts to entice the crowds, young and old alike.
The rising trend of cafes being the new hotspots for everybody – socializing youngsters, working professionals armed with a laptop, single patrons scrolling the social media feed on their smart phones, business executives reading the online economic news, and friends and family members simply catching up with each other – is only expected to become more widespread.
The best time to tap into the growing coffee shop market was yesterday; the second best time is today for entrepreneurs who are ready to live their passion and make a living out of it.
The Challenge: Competing with Big Coffee Brands
Coffee chains are among the leading businesses in the food franchise industry. Among the top coffee spots are Dunkin’, Tim Hortons, Maui Wowi, and Coffee Beanery.
Despite the widespread success of coffee franchises, these businesses work to compete with coffee powerhouse Starbucks, as well as other independent coffeehouses, fast food restaurants, or quick service restaurants. While many coffee drinkers have begun to prefer bought coffee, more than half still prepare their coffee at home.
Nevertheless, coffee franchises have combatted this competition by offering more services and products. In the past year, Dunkin’ has been among the leaders to take steps in rebranding and offering new product. Starting January 2019, Dunkin’ has dropped the “Donuts” from the business name in an effort to promote coffee products and new coffee flavors and drinks.
COFFEE FRANCHISES HAVE COMBATTED COMPETITION BY OFFERING SUPERIOR SERVICES AND PRODUCTS.
Some coffee franchises have also begun to offer a wider array of food options to encourage more customers. Others have opened meeting spaces or conference areas, taking advantage of the growing amount of freelance workers.
Some of the Best Coffee Shop Franchises
To help you explore the available coffee shop franchises, here’s a close look at some of the best franchising opportunities:
Ziggi’s Coffee Franchise
Founded in 2004, Ziggi’s Coffee serves freshly brewed coffee and treats every customer like family. Besides the lattes, mochas, and white mochas, Ziggi’s offers various specialized caffeinated beverages and Red Bull infusion drinks that are perfect for kick starting your day.
The initial fee for Ziggi’s Coffee franchise is approx. $52,000 and startup costs range from $188,000 to $1,026,200. The coffee franchise offers a great opportunity to tap into the increasingly popular coffee industry that attracts youngsters and working professionals alike with its delicious coffee and savory treats.
Dunn Brothers Coffee Franchise
The Dunn Brothers, known as the coffee roast masters, founded the Dunn Brothers Coffee in 1987, having spent 30 plus years perfecting their craft. They believe in ethically sourcing their coffee and offer tasty brews, fresh roasts in small batches, and a warming coffee experience alongside a variety of specialty coffee drinks, teas, breakfast, and lunch items.
The Dunn Brothers Coffee Franchise requires an upfront, one-time fee between $32,500 and $37,500 and startup costs ranging from $385,200 to $609,600. It’s a highly rewarding opportunity with revenues between $175,464 and $816,205. Entrepreneurs who would like to continue their idea of inclusivity in their cafes are encouraged to apply for this lucrative coffee shop franchising opportunity.
Le Macaron French Pastries Franchise
The Le Macaron is an award-winning franchise that offers an abundance of variety with its brightly colored macarons in 20 flavors, creamy gelato, and other classic European desserts.
Entrepreneurs can choose between opening a café or a mobile kiosk. The startup costs for the Le Macaron French Pastries franchise are between $131,500 and $361,500 and revenues will likely fall between $130,000 and $430,146. It offers entrepreneurs multi-fold benefits like low startup costs, easy operations, and multiple revenue streams.
To turn your passion for food and beverage into a lucrative entrepreneurial venture with a known and trusted brand, explore food, restaurant, and coffee shop franchise opportunities.
Founded in 1950, Dunkin’ Donuts has more than 7,500 locations across the country. While many people know Dunkin’ for its breakfast treats, true Dunkin’ fanatics (i.e. East Coasters) know that the coffee is where its at. With Dunkin’s new rebrand in early 2019, the company has introduced a variety of new coffee beverages and flavors.
Although it’s better known as the largest Hawaiian smoothie concept, Maui Wowi doesn’t skimp on its coffee menu. The franchise prides itself in providing authentic Hawaiian coffee beans with hints of wildberry and an earthy finish. Maui Wowi offers two prized roasts, Maui Mountain Roast and Pacific Passion, brewed fresh each day.
Although it originated in the Great White North (Canada), Tim Horton’s has become a fan favorite in the states, too. While the franchise does offer a variety of breakfast food options, it is best known for its coffee. Offering a variety of gourmet brews, Tim Horton’s even features its own Premium Blend, sourced from the world’s best coffee regions.
The Human Bean
Found primarily on the west coast, The Human Bean is a one-of-a-kind drive-thru espresso franchise. The Human Bean prides itself on its experienced baristas and high quality ingredients in all coffee beverages. The franchise offers a large list of coffee drinks, including frozen blends, house specialty beverages, and non-caffeinated children’s drinks.
Coffee Beanery opened its doors in the mid 1970’s, well before the term “specialty coffee” became common use. The franchise is devoted to maintaining certain traditions: exceptional coffee, a cozy and calming environment, and a welcoming corporate culture. Coffee Beanery produces various flavored coffees and additional beverages offered at each franchise location.
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