How to Open a Franchise Coffee Shop in 6 Steps

When it comes to opening a coffee shop, there are a lot of things to consider. However, there’s always the option of investing in a coffee franchise. Franchises provide great opportunities for new and seasoned entrepreneurs. Reputable brands have industry experience that you as a franchisee can benefit from. Learn how to open a franchise coffee shop and what to expect at each step of the way.

Step 1: Thoroughly Research Your Options

This cannot be stressed enough. When looking into different coffee franchise brands, you’ll want to do extensive research into each opportunity. Some key components to analyze:

  • Initial startup costs: A benefit of franchising is knowing upfront what it will cost to get started. Take note of not just the low end of the range, but the higher end as well. While everyone hopes to start their business affordably, you can’t rely on that happening.
  • Franchise fee: The franchise fee is essentially what seals the deal once you sign a franchise agreement. It’s typically due as a lump sum and is non-refundable should you choose to not continue with the franchise.
  • Earning potential: Franchisors cannot tell you exactly how much you’ll make as a franchisee. What you generate as revenue will depend on your ability to build and run a strong business. However, many franchisors do include an Item 19 of their Franchise Disclosure Document (FDD). This section is also called “Financial Representations” and includes revenue numbers reported by all franchise locations from the previous fiscal year. This section will give you an idea as to the overall financial health of the brand.
  • Training and support: A reputable franchisor should have a comprehensive training curriculum for you to learn about the business before you even open your doors. Plus, you should have a corporate representative available for help or guidance as you navigate business ownership.
  • Reputation: What do customers say about the brand? When you look at reviews, are they primarily positive? Before ever signing with a franchise, you need to be sure the brand is in good standing with the public.
  • Happy franchisees: The best way to learn about a franchise is to talk directly to the people who live and breathe the business every day. Set up meetings with multiple franchisees so you can get a wide range of perspectives. Draft some questions ahead of time and be sure to ask the same ones to each franchisee – this’ll make it easier to compare answers afterward.

A lot of the information you’ll need to compare opportunities will be found in the brands’ FDDs. Be sure to read and carefully review the document from each franchise. You may even want to have a franchise lawyer do the same.

Step 2: Write Your Business Plan

All businesses require a plan. Once you’ve signed on with your preferred franchise brand, you’ll have a team of industry experts who can assist you with creating the business plan for your franchise coffee shop. Note that this plan will be presented to banks and lenders as you work to secure funding for your business. Be sure to keep things concise. A solid business plan should answer the following questions:

  • What sets your business apart from competitors?
  • What specific problem are you solving/need are you addressing?
  • Who is your ideal customer?
  • What is your target demographic?
  • What is your revenue model?
  • When do you anticipate breaking even?
  • Can you outline your marketing strategy and tactics?
  • How much capital do you require to launch your business?

Step 3: Obtain Financing

Your franchise coffee shop will require money to get started. Starting a business with a franchisor has the advantage of providing you with clear insight into your investment costs, so you won’t have to worry about unexpected expenses. Franchisors have ample experience with the build-out process and can guide you through any challenges that may arise.

There are several approaches to obtaining financing:

  • Small Business Administration (SBA) loans: Regarded as the benchmark in business funding, these loans come with a lower risk for lenders. This results in banks being more inclined to provide financing with a lower interest rate and an extended repayment schedule.
  • Commercial loans: Banks generally offer commercial loans to businesses to address short-term funding requirements that are beyond the business’s financial capacity. This loan type may require collateral from the business in the event of a default or bankruptcy.
  • Crowdfunding: While less conventional than a bank loan, sourcing funds from family and friends or organizing an online fundraiser can be an effective means of securing financing for your franchise coffee shop.

Step 4: Find a Location

When looking for a place to put your coffee shop, the site you select should be highly visible and easily accessible with plenty of room for parking. You’ll want to make sure that the location you select isn’t so large that it could hurt your profit margins. Your franchisor should have tools and resources available to help you find the best site for your franchise coffee shop. Often times, a representative of the brand can assist you with lease negotiations so you can get the best price.

Step 5: Recruit Your Team

Unless you plan to fulfill all of your customers’ coffee orders yourself, you’ll need a team! You’ll want to recruit friendly staff members who are eager to help customers as they visit your coffee shop. When you invest with a franchise, your team will be trained on how to do things according to brand standards by a corporate office educator.

Step 6: Franchise with Scooter’s Coffee®

Scooter’s Coffee® is one of the leading coffee brands in the country. With over 600 locations across the U.S. and many more in development, we’re actively seeking driven entrepreneurs to join our rapidly expanding franchise.

Franchise candidates need to meet our financial requirements, including a net worth of $500,000 and $200,000 in liquid capital. Our startup costs range between $797,000 and $1,341,500 – this includes our initial franchise fee of $40,000.

To learn more about our franchise opportunity, request information and one of our franchise development representatives will be in touch with you soon.

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