People often make scenarios in their head while sipping a good coffee and some genius business ideas have been formed during the coffee discussions as we all know. Among them, Starbucks is the pinnacle because of the coffee shop experience and provides an experience that you are not going to find anywhere else.
But before you start thinking of lattes and frappuccinos, you are probably curious to know the Starbucks Franchise Model if you want to have a go in the business because you are just a fan of Starbucks and want to open a store in your city. We have tried to provide much-needed information about the model, the investment required, and how can you run a successful franchise.
Let’s understand more.
Why to consider a Starbucks Franchise?
Why to consider a Starbucks Franchise?
Starbucks has many stores all around the world in more than 80 countries. Their brand is extremely well-known publicly for its premiumness which makes it a great choice for starting a franchise. Also, Starbucks gives training and help to its franchisees to make sure they can start running their business smoothly.
Total number of Starbucks Stores Worldwide: 38,038 (as of end 2023).
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Breakdown of the Starbucks Franchise Model
Breakdown of the Starbucks Franchise Model
Starbucks doesn’t work like most franchises. Instead of owning the stores themselves, they give licenses to other people to run their own Starbucks stores. This means you won’t actually own the territory of a franchise whereas you will make a deal with Starbucks to run a Starbucks store using their name and rules.
| Feature | Franchise Model | Licensed Store Model (Starbucks) |
| Investment | Typically lower upfront | Higher upfront investment |
| Territory Ownership | Franchise own territory | No territory ownership |
| Brand Control | More control over the menu etc. | Less control as per Starbucks’ standards |
| Profit Sharing | Franchises keep profits | Shares profits with Starbucks |
Read bout Starbucks Shares here.
What are the benefits of a Starbucks Licenced Store?
What are the benefits of a Starbucks Licenced Store?
Although setting up a licensed store requires more money at the beginning but it has some great benefits.
- Reduced Risk: Starbucks picks good places and gives its workers good training, so it’s less likely that things will go wrong.
- Brand Strength: The Starbucks brand is well-known and you can use that to bring in customers right away.
- Continued Help: Starbucks provides ongoing support to help your store (anywhere worldwide) in getting succeed with operations and marketing.
How Much Does a Starbucks Franchise Cost?
How Much Does a Starbucks Franchise Cost?
Starbucks doesn’t reveal publicly about how much it costs to start a franchise but it’s estimated somewhere (31,250-50,000 USD) just for the licensing fee. However, there’s even more to it than just that. The key investment areas:
- Store Setup: When you set up a store, you will know it involves paying rent regularly, buying equipment, furniture, and signs, and stocking up the initial inventory. You should keep in mind the cost (62,500-125,000 USD) depending on location and size.
- Inventory: You’ll need to stock up on coffee beans, syrups, pastries, and other things where this is an ongoing cost.
- Working Captial: It’s important to have enough money to cover your expenses like paying your employees, and utilities, and promoting your business until it starts making a profit.
In total, opening a Starbucks franchise can cost approx. (156,250-250,000 USD) or more. This may seem daunting but you need to remember one thing that you’re putting your money into a brand that is well-known around the world with a history of success.
What is the application process for Getting a Starbucks franchise?
The application process isn’t very tough where you just need to follow the given steps and you are good to go in having a new franchise.
- First Step: You need to get in touch with Starbucks to tell them that you’re interested and get all the information.
- Financial Review: After that, you will have to create a detailed report showing how you can manage the money for the investment.
- Multi-Stage Interview: You will have many interviews with Starbucks employees to talk about your job experience, leadership skills, and how much you like the brand.
- Site Selection: Choosing the right location for your Starbucks store is very important. It needs to be in a busy area where lots of people walk by, and it should fit well with the Starbucks brand.
- Training & Approval: If all remain successful, you’ll get training on how Starbucks works and then you’ll be approved.
Tips to Run a Successful Starbucks Franchise
Tips to Run a Successful Starbucks Franchise
You got your Starbucks license so, congrats and these are some of the important tips for keeping your business successful.
- Customer Experience: Starbucks is well-known for its friendly service and inviting environment. Teach your employees to show these values in their work.
- Brand Standards: It’s important to be consistent. Carefully follow Starbucks’ instructions for making drinks, checking the quality, and promoting the drinks.
- Community Engagement: Get involved in your community by participating in local events, supporting charities, and creating a friendly store atmosphere to connect with people.
- Data-Driven Operator: Start using Starbucks’ sales information and tools to learn about what customers like and improve your products.
Is the Starbucks Franchise Right For You?
Is the Starbucks Franchise Right For You?
- Expensive investment: Buying a Starbucks costs a lot of money at the beginning.
- Experience Preferred: We want franchisees who have worked in restaurants or retail before. passion is good, but experience is better.
- Long-Term Commitment: Owning a Starbucks franchise is a big commitment that lasts a long time, like running a marathon, not a short race. Get ready to work hard.
The Final Sip:
Having a Starbucks store offers many things like a strong brand, support, and a chance to make a lot of money as well but you should keep in mind that it’s a big investment that needs hard work, good business skills, and a love for coffee. Thus carefully think about how much money you will spend, the time you can commit, and the risk you are okay with. If you’re ready for the challenge and have the right skills, owning a Starbucks store can be a successful and fulfilling business.
We hope this blog has helped you to make a choice about your Starbucks franchise dream. Don’t forget that doing good research, having a strong plan for your business, and being really good at what you do are really important for creating your own successful business, just like Starbucks.
That’s it for now. 🤟
Thanks for reading.
