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How to Start a Coffee Shop Franchise

Coffee shops have experienced explosive growth in past years, and their popularity continues to grow as people seek places to get a decent cup of coffee, chat with friends, meet for business, or just plug in their laptop to work.

It seems perfectly reasonable (and profitable) to enter this growing industry, but it can be intimidating to start one up on your own. That’s why coffee shop franchises are becoming a popular choice for people who want to start their own coffee shop, but want security in their investment. With a trusted brand name, training, and support, coffee shop franchises are a great investment.

We have prepared some important aspects to keep in mind when choosing the coffee franchise opportunity that suits you best.

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  • Decide if franchising is for you. Franchising can be a great solution for someone that wants to start his or her own business, but wants the support and brand name recognition that come along with franchises. You will need to weigh the pros and cons of franchising for yourself.
  • Research the industry and the product. You also want to make sure that the coffee industry is right for you, so find out more about it and the product you will sell. There are plenty of Internet articles that pertain to the industry, including discussion forums by current franchisees who share their experiences. Keep in mind that owning a coffee shop may mean long hours and a substantial capital investment for the leasing of a retail space.
  • Examine your franchise options. This includes research on the Internet, in trade magazines and by attending franchise exhibitions. Franchise Direct’s directory of coffee franchise opportunities is a great resource.

Once you start examining the different coffee shop franchises that exist, ask yourself the following questions to help you choose the one that makes the most sense for your current situation.

  1. Does this coffee franchise have a well-recognised brand name? This can be crucial in the success of your coffee franchise business, as consumers prefer brands with which they are already acquainted.
  2. How much capital is required? Find out whether or not you can afford the franchise. Some franchisors offer direct or third party financial assistance, so be sure to ask.
  3. What kind of training and support will they provide? This will depend heavily on the franchisor you choose, so make sure to find out exactly what they offer. Usually, they will give you the rights to use the company’s name and brand, and provide training on their products as well as guidelines on managing employees and administrative activities. They also often provide help with the launch of the business and may give you a discount on supplies and products with their bulk purchasing power. However, keep in mind that some franchisors do charge fees for the ongoing support and may even charge monthly royalties on the profit you make.
  4. Are there many similar coffee shops in your area? You want to make sure that the area in which you plan to start your coffee house franchise is not one that’s already inhabited by similar coffee houses. Too many of the same type of store in the same neighborhood could be bad for business. Some franchises may offer exclusive territories, where you are the only franchisee in the area, so it is best to find out what the company’s policy is early on.
  5. How strictly do you need to conform to guidelines set out by the franchisor? When you open up a coffee franchise, you will need to think about the appearance of your storefront. This may include displays of the logo and specific décor requirements that will need to be strictly implemented.
  6. What are the company’s policies on selling your franchise down the road? At some point in the future, you may decide to sell your franchise. This can be for a variety of reasons, including retirement, personal circumstances or starting a new business. Make sure the coffee franchise you’re looking at has resale procedures that are easy on you.

The best way to find out all the important information about your potential coffee shop franchise is by talking to current franchisees, visiting the franchisor’s head office and carefully reading through the franchise agreement. Talking to current franchisees will provide a real-world perspective on owning a franchise for that coffee company. Ask them about their day-to-day operations, their struggles, and earnings both at start up and currently. Visiting the franchisor’s head office will tell you what kind of operation the company is running. A visit will give you insight into the leadership and direction of the company, as well as provide an indication of the support you will likely receive as a franchisee. Finally, reading the franchise agreement should verify all of the information that you’ve discussed previously with the franchisor. This is a crucial legal document that will establish the details your contract term and answers to all of the questions above.

Once you follow these steps, you should be ready to choose the coffee shop franchise that will best suit you.

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