How Much Does Starbucks franchise cost?
What Is the Value of Starting to Run a Starbucks Franchise?
Starbucks was established in first half of 70-s of 20th century in Seattle, Washington. It is still the most prevailing on market and profitable coffee shop chain in the United States of America, which is mainly appreciated by people for its coffee, made out of dark roasted beans.
At the moment Starbucks does not franchise in the Canada or US. Once Starbucks was giving an opportunity to run a franchise in Europe. Though, at present all European franchises are likely to be removed by September 2020th.
Despite the mentioned situation, there is an alternative, given by Starbucks, which consists of starting a “licensed” store. Starting such licensed store evaluates in approximately $315,000.
How Could You Develop into an Entrepreneur managing a licensed coffee shop?
Up to now Starbucks is not signing up to their business model any further entrepreneurs in European Union. But still, they give a link to review news about that topic.
According to my analysis you must possess around £50,000 in liquid assets for superintending a Starbucks cafe in Europe.
What if I am not an European Union Resident?
If you do not live in Europe or desire to move, you have a chance to set up a Starbucks licensed shop. The procedure will be almost the same as opening a Starbucks franchise in Europe except some points:
- You must keep about $700,000 in different capital goods, e.g. real estate, stock, bonds etc. when applying for the Starbucks licensed shop.
- You must pay licensing fees, not franchise fees.
- The company of Starbucks will control the store and you will be only getting a reduced amount of the income from managing it. That is particularly contrasting than franchising, in which you would possess the location if you did supervise a Starbucks franchise.
The Coffee Stores Market’s Broadening Possibilities
Around 41% of Starbucks locations in the US are operated as licensed shops. The total sum of all these is fourteen thousand. Based upon PR News Wire research, the market is expected to keep going widening its potential. It is predicted that this sphere of business will gain approximately 4.2% in capitalization. Entrepreneurs, who have license, may get an excellent training in administering a business with a reliable model beneath the popular company logo. After such incredible practice they could move onto theirs dreams chasings.
Why It is more Suitable for Starbucks Company to make more Licensed Shops Than Giving Opportunities for Entrepreneurs to make more Franchise Locations?
For such big industry companies like Starbucks it is more vital to make sure that everything what is going on in the shops fits their standards so that clients could enjoy every moment of their time spending with Starbucks.
The Starbucks only offers franchising in Europe because the General Director had been long confronting the idea of giving franchising licenses in order to take responsibility for the both Starbucks dignity and products quality.
When applying to have a licensed coffee shop, you have to lease the Starbucks logo and brand by licensing fees expand, which go directly to the chain. Licensed coffee shops are located in diverse crowded places such as schools, universities, airports, shopping centers and hospitals.
The Profit of Running a Starbucks Licensed Coffee Shop
In preference to developing an unique brand with your own coffee shops chain, Starbucks will introduce you as an already popular brand to ease the achieving the sales you need to close the sum spent on opening and fees.
There are three main advantages of managing a licensed coffee shop.
- Outstanding Potential.
A lot of coffee chain locations never made low incomes during their service so that is why they could be named as really profitable because of sustainability. In comparison to different companies on the market, Starbucks has been producing higher revenues before tax, decrease of an asset in monetary value, and repayment of financial borrowings through a series of periodic payments for a long time period.
- An Ideal Trading Concept.
It is believed that coffee and other products make Starbucks so unrepeatable and individual, but the company itself has different point of view on this subject. They consider overall experiences and friendly atmosphere between staff and clients to be the main superiority in the industry. They determined to develop their coffee shops by making certain that customers are delighted with the service provided and wish to comeback to their stores to have a good time.
Moreover, Starbucks doesn’t pursuit making more franchise shops because their licensed shops in the Canada or US show the excellence of today’s system, which has proved its trustworthiness.
- Widening Risks, But Extending Sales’ Growth
Nowadays, the competition in the coffee industry is so high that even Starbucks has to extend their risks to gain more power on the market. Starbucks’ revenues strongly depend on the shifting of the prices of initial materials. Therefore, Starbucks must invest in an extraordinary products that make their shops successful.
The company has a lot of goals and among them is significant increasement in capitalization by pumping in licensed coffee shops. Starbucks gets profit from the licensed shops by gathering fees and revenues. Each licensed shop is helping Starbucks to support their right to be the most extensive coffee shop chain in the United States of America.
Exposure Causes Greatness
To fully understand what is beneath and inside this business model you had better try a participation in diverse activities. It will probably help you in the future, when you will be ready to set up the shop and start making money.
Try to be a Trainee in a Starbucks (Depending on your opportunities) or Other Similliar Stores.
It would be extremely helpful to try yourself by working in Starbucks. Even if you would be employed at your local chain during half a year, you will get a good idea of what makes Starbucks attractive for customers.On the one hand, mentioned experience would be worthwhile for you, but it will boost the knowledge of how to manage and control the business.
If You Are Not Employed At any Coffee Shop, Just Review the whole Scene of what Occurs.
If it is impossible for you to be hired, regularly visit your favorite coffee shop to review your own experience. Write down the answers on these questions so that you can grope the feeling of what are the drawbacks and what are the advantages of visiting such place.
- What is the overall atmosphere?
- How does administration handle customer service difficulties?
- What kind of a furniture presented an how customers react on it?
- How do clients interact with the administration and staff while they visiting the coffee shop?
Date and write every side of interesting moments recognized by you in a notebook, so that it could help you when the time of starting your own business comes.
Try All kinds of Starbucks’ Products.
Visit local Starbucks to check out the mixture of products. Inspect as many as you could to see what are the best and the worst options for the menu.
This experience will help you in accomplishing the ideal service, which will cause better attendance and, therefore, bigger revenues.
Finally you will be able to make enough sales, develop marketing strategy and customer service experience to open another 20 obligatary stores within the 5 years according to the signed contract.
Supervising a Starbucks licensed shop has to help you to make first steps in achieving your big goals, for example, becoming a small business holder. Collect your financial recourses, meet up with the Starbucks licensers in order to discuss your plans, and your dreams will come true as soon as possible!
So, to summarize, Starbucks is a really worthwhile option to start as a franchisor right now.
In any case, we recommend talking to someone who is directly connected with the franchise. We mean current and old Starbucks franchisees. Nobody knows everything about Starbucks as good as they. So speak to them to find out the answers to all your questions and learn from their experiences.
Remember that the universe of fast food franchises is not ended on Starbucks and you can always find an alternative that suits you.
Before making the ending decision on buying a franchise and taking this step, you should carefully study the data sent by the franchisor with your professional franchise advisor. This process is essential when purchasing any franchise.
Be sure to check out our section of coffee franchises and discover new possibilities together with the TopFranchise!
What is the typical income per day with the Starbucks licensed shop? Sales heavily rely on total amount of clients and what exactly they buy. But, an ordinary shop makes around $540,000 in revenue every year based upon a US national analysis.
To gain an understanding of final cups of coffee sales in each day, click here.
Average Total Revenue
Here are represented approximate numbers in accordance to the review of standard Starbucks shop. The more crowded the spot is, the bigger revenues it can produce than above-mentioned parameters.
What happens to the outdated coffee Starbucks cannot reuse or recycle?
Starbucks company is trying to prognosticate what volume of coffee to prepare at certain hours during the day according to customers attendance to reduce the percentage of coffee which they will be forced to dispose. Once the biological-clocks of coffee stop, employees have to get rid of it. Because of the Starbucks’ preferences and politics (quality instead of quantity), the company wish to waste some amount of coffee beans, but save the trust between them and their customers.
Why is Starbucks even now has the title of most profitable coffee shop chain in the United States of America?
Frequent social media appearance and other business strategies give the superiority on this market, said in the study of Millenial Marketing. For example, Starbucks company has created easily recognizable hashtags that gravitates people under age of 35, who really love drinking coffee.
Franchise expert Topfranchise.com