21 January 2012

Coffee Franchise Cost

By Dora Kate


Got to live with the idea that Starbucks is not franchising because it only deals with biggies like Kroger and Safeway.Everywhere you go, there is a coffee shop. It is not therefore surprising to note that entrepreneurs ( whether newcomers or veterans) are excited to initiate ventures like these. Similarly, with this sensational popularity of coffee business is the phenomenal rise of coffee franchise business that requires a certain budget. The coffee franchise cost, however, requires a heavy capital and that makes the entire process so intimidating.

A startup capital of about $191,000 to $521,500 with additional $60,500 to $70,000 for marketing materials, inventory, and franchise fee are required in exchange for a quite meager margin of profit of about 10 to 15%. One can instead purchase a coffee franchise that will save one from all the hassles involved in starting a coffee shop business that entails an exorbitant amount.

SBC has put out for the call for more franchisees to expand their operations. And because a cup of coffee is 99% water, the news reports says that 20% profitability is quite feasible. This may range from 10,000 to a whooping 100,000 US dollars depending on the company. To cover all expenses including the purchasing of all necessary equipment and furniture, leasing and renovation of a space, licensing and fees, a total investment of about 185,000 to 400,000 US dollars may be required.

There are also plans to open franchises in hospitals and commercial and industrial buildings. Still, if there is a sufficient capitalization it would be better to go by a franchise as the name alone is enough to have a broad customer base.

Starbucks which is one of best names to go by, claims that theirs is not a franchise but instead offer a variety of coffee and tea programs or stores for a variety of markets. The process is tough, but it is all worth it. Starbucks has what it takes for a franchisee to succeed without qualms or question- superior customer service, product reliability and consistency and a name that is synonymous to success. Are you still contemplating and daunted by the huge coffee franchise cost? If you have enough bank balance and it is a name that spells success, then go for it!




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