How Much Does a Starbucks Franchise Cost?
The Retail Coffee Giant
On the TV show “The Simpsons,” one gag shows Bart passing multiple Starbucks coffee shops as he walks through a shopping mall. After reaching the store where he wants to have his ear pierced, he’s told, “Better make it quick, kiddo. In five minutes, this place is becoming a Starbucks.” The most successful coffee retailer in U.S. history, the Starbucks brand is world-famous and seemingly everywhere. With this sort of name recognition, who wouldn’t want to own a piece of that? However, according to the company’s Web site, “Starbucks does not franchise [its] operations and has no plans to franchise in the foreseeable future.”
Unlike lots of other businesses that rely on franchise owners to spread their name far and wide—fast food restaurants, auto repair shops, daycare centers or cleaning services, to name but four—nearly all the Starbucks establishments you see are actually company-owned stores. While the corporation does not offer in the true sense of the term, they have a number of flexible programs that allow individuals to operate in various markets. If you come across a Starbucks kiosk located on a college campus or in a hospital, airport or hotel, chances are pretty good that the location is an independent operation. Do you own a restaurant? Sell Starbucks coffee instead of Brand X and enjoy a whole new set of customers. Do you operate a mom-and-pop motel? Set aside some space in the lobby to install a barista station and serve your lodgers fresh lattes and cappuccinos all day long.
One of the best reasons to own a franchise involves the ability to take advantage of name recognition. The Starbucks mermaid—the company logo that appears on every paper cup, ceramic mug and carryout bag—has proven to be a gold mine of profit for its corporate owners. In four years, company revenues jumped from just under a billion dollars to $2.6 billion annually. One way for an individual to grab a ride on the coffee express is to obtain a license to sell Starbucks products in your existing establishment. In addition to packaged coffee beans—whether whole or ground—the company also puts its name on cold, canned coffee drinks, breath mints, candy bars, ice cream treats, and anything else that either contains coffee or is likely to be found in a coffee shop. There are Starbucks-brand travel mugs, tote bags, coffee grinders, and home espresso machines. If you operated a retail store or anyplace the public congregates, you are a likely candidate to carry licensed Starbucks products.
One of the routes to success for founder Howard Schultz involved his company’s joint-venture agreement with Barnes & Noble, the giant bookseller. Beginning around 2000, practically every bookstore the company opened employed the store-within-a-store concept that has since spread to other types of businesses. A Starbucks coffee shop, run by bookstore employees, occupies a prominent location in the center of many stores or alongside the magazine racks. For anyone in charge of similar large-scale operations—supermarkets have become the new frontier in this respect—the people at Starbucks headquarters will want to hear your ideas.
Other Coffee Options
Thanks to the business model Starbucks helped to pioneer, the upscale coffee shop is a fixture in nearly every city and town across the United States. While you cannot obtain a Starbucks franchise, there are plenty of other well-known brands out there for budding entrepreneurs to examine. Coffee Beanery asks for an up-front franchise fee of $27,500 and a total investment roughly between $70,000 and $500,000. Mountain Mudd Espresso offers a drive-up kiosk franchise for a cash investment of less than $100,000 and total costs of between $66,000 and around $200,000. The fee to open a Nestle Toll House Café is $30,000, the total investment will run a from between $165,000 and $425,000, plus you get to sell those yummy chocolate-chip cookies alongside the coffee drinks.