Can You Finally Open a Starbucks Franchise in 2022? (Cost and Analysis)

everywhere you turn or shop, there ’ randomness credibly a Starbucks nearby. Starbucks is considered the largest coffee chain in the world with over 32,646 stores in 2020 and still growing. What started as a small coffee patronize in Seattle has grown into a multi-national pot with 70 million patriotic patrons young and old. How much will it cost to open a Starbucks franchise? The badly newsworthiness is that you however can ’ deoxythymidine monophosphate franchise this concept. Why ? then Starbucks CEO Howard Schultz once said in 2003 that “ It would have been hard to provide the level of sensitivity to customers and cognition of the product needed to create those Starbucks values if we franchised. ” In other words, Starbucks would like to preserve and maintain the quality of their coffee bean shop and overhaul. They believe consistency and quality can get lost with the franchise model. But don’t click close on the tab just yet. There’s still a way you can get involved in managing the operations of a Starbucks store. Let me explain. You can still open up what is called a “ licensed ” Starbucks storehouse. Bear in heed that license is not the like as owning a franchise. It ’ s like renting the post rather and the companies likeness rather. You ’ ll need to pay a license tip rather than a franchise tip. A license Starbucks is roughly around $ 315,000. You ’ ll besides need $ 700,000 in melted assets to be considered for this opportunity. Take our franchise quiz to find out if an option coffee workshop brand is right for you.

To learn more about licensing a Starbucks memory, I walk you through the details below. Grab a coffee any way you like it and let ’ s have started .

Financial Requirements and Fees

As mentioned above, licensing a Starbucks memory has significant fees and asset requirements. Below are estimated details on what these fees are :

Fees/Expenses Financial Amount
Liquid Assets $700,000
Licensing Fee $315,000

To better understand the term, liquid asset just means cash on hand. This is the come of money you have that you can well and readily use. You can consider money in a economy bill or stock holdings as an model of a liquid asset. again, Starbucks does not allow franchising of their store so it ’ south adept to talk to Starbucks immediately if you ’ ra concern in licensing their coffee shop. You ’ ll have to fill up a shape and they ’ ll have to assess your qualifications before accepting you as a accredited hustler of their brand. Keep in judgment even though you ’ re not a franchisee, the investment is at a like level to comparable concepts like McDonald ’ randomness as an example that requires $ 1 – $ 2.2. million on average to join the franchise. Why do entrepreneurs silent decide to invest in a Starbuck licensed store if they aren ’ triiodothyronine tied the owner ? The fact is you can even make money leveraging the likeness, menu, and 70 million potent customer base of the global brand. If you ’ re able to find a placement like airport or shop plaza, you can leverage the mark recognition to sell a bunch of cups of coffee .

Average Sales / Revenue per Year

Starbucks ’ modal sales for the past five years is $ 23.69 billion annually. This is why they ’ re the king of all coffee shops. Although they had a dip in sales in the class 2020 ascribable to the pandemic, their stats for the past five years show how their sales were continually growing. We expect this emergence course to continue as the company expands deeper into large external markets like China. One catalyst for their growth is the mobile app that immediately accounts for a astonishing 24 % of sales in the United States. This share of company increased from only 3 % in 2016. The mobile app allows customers to get rewards when you order drinks or food through the app. These rewards, or stars as they are called inside the app, can be exchanged for free menu items exchangeable to a loyalty punch-card program. Not Sure What Franchise to Start? Take Our 7-Minute Franchise Business Quiz! As person who has the Starbucks app downloaded on their telephone, I can confirm the app is a potent market tool for the company. I get push notifications delivered on my call through the app offering me coupons or informing me about specials or new drinks. This gentle admonisher that has encouraged me on more than one occasion to drive to my neighborhood localization to get a Venti benighted roast. Costa Coffee and Dunkin ’ Donuts are considered as Starbucks ’ competitors but their annual average sales ( costa coffee : £1.34 billion ; Dunkin ’ Donuts : $ 1.37 billion ) falls far short compared to Starbucks. even, they can be viable alternatives to evaluate if you want to get into the coffee occupation .

Starbucks Franchise Facts

Total Units 32,646
Incorporated Name Starbucks Corporation
Franchising Since Only open for licensing
Industry Coffee Shop
Subsector Restaurant

Starbucks ’ main headquarters is located in Seattle where the caller was founded. Although their largest branch is in Chicago with over five floors of bake goods, a cocktail barroom, and a rooftop deck. Starbucks has over 349,000 full-time employees around the world. The name of the chocolate shop came from the first mate in Herman Melville ’ s book “ Moby Dick. ” Though they ’ ra known for selling coffee, Starbucks besides owns Evolution Fresh, their bottle fruit juices, and Ethos Bottled Water. other celebrated businesses that Starbucks owned were Seattle ’ s Best Coffee and Tazo, a tea company. At the time of this write, Starbucks ’ president and head administrator officer is Kevin Johnson .

How Much Does Starbucks Make in Profit?

As reported by Statista, Starbucks ’ sales in 2020 reached $ 19.16 billion. According to an SEC filing from 2010, the ship’s company made a gross margin of $ 108,000 per memory. Considering Starbucks immediately has 32,646 locations, you could estimate a annual gross margin of more than $ 3.5 billion per annum. That is a astonishing amount of net income. There is even meditation that Starbucks has increased profitableness further since way bet on in 2010. This profit margin has likely increased due to the baron of their scale and lower costs, distribution, and even breed buy backs. Starbucks did suffer a 27.7 % drop in 2020 compared to the previous year but that was caused by the pandemic. It should besides be noted that Starbucks ’ sells early items aside from beverages. They besides sell food products such as their adust goods. beverage products earned around $ 14.34 billion while food products reached $ 3.8 billion in 2020 .

Advantages of a Starbucks Brand License

We know that you can ’ thymine franchise a Starbucks. But you can license a placement. here are some advantages of going this route. Customized Store Design According to Business News PH, when you ’ re granted a license to operate a Starbucks, you can customize the coffee release according to your style. Unlike early franchises where the caller strictly gives you the layout or store design with Starbucks, you can apply a few designs that would suit the local anesthetic taste. Franchise Review: How Much Does it Really Cost to Open a Subway Franchise?  But that doesn ’ metric ton mean you can be wholly creative on the design. You ’ d silent need to have your exit based on one of the 18 design studios that Starbucks will provide. But it ’ s still better than the uniformed look you ’ ll get from other business franchises .Starbucks food truck Exclusive Food Menu and Whole Beans In summation to a customized shop design, you besides get Starbucks ’ single bakery program. not only do you get the signature drinks from them but you besides have access to their menu. All those croissants, cheesecakes, buns, cookies, and tarts, you ’ ll have at your coffee shop class. You ’ ll besides get the Starbucks beans so you besides don ’ t need to worry about where to get your provision of coffee to sell.

Ongoing Consultation Starbucks won ’ triiodothyronine equitable leave you correct after you ’ ve put up an wall socket. All the concerns you have will be answered as consultations and support will be provided. It would besides be beneficial to work inside a Starbucks storehouse anterior to investing in a brand license. This will get you familiar with the daily operations of a retail store. Related Reading: What’s the Real Cost to Open a Dunkin’ Donuts?  Proprietary Equipment Package You ’ re probably wondering how will you know which coffee bean machine is the best one to use or what other equipment you ’ ll need when you license a Starbucks storehouse. You won ’ t need to worry about that because they ’ ll be providing you with the equipment they ’ ve already approved for habit. This helps maintain consistency of your memory to other coffee shops operated under this umbrella. The Starbucks Trademark One of the major advantages of owning a Starbucks is that you ’ ll have that extra sex appeal among early coffee bean houses. Your store name is already well known. You already have a customer base. The Starbucks aesthetics is already set up for you. You ’ ll have the touch chocolate line, the merchandise, and the seasonal worker promotions like Pumpkin Spice Lattes. You ’ ll have most of the store quick for operation without having to figure out your sword .

Challenges of a Starbucks Brand License

just like any early business, operating a Starbucks comes with its challenges. But this is why we ’ rhenium here breaking it all down for you so that you ’ re familiar with the obstacles you might hurdle through if and when you decide to license a Starbucks. hera are a few that you should know : Expensive Licensing Fees We ’ ve already mentioned how much it would take to license a Starbucks. early than the fee, you besides have to consider having a fluid asset that Starbucks would deem an acceptable come in order for them to approve your application. so unless you ’ re already running a huge national party, getting to license a Starbucks may be difficult . High Priced Coffee Menu It ’ south no storm that Starbucks is deemed expensive by many. A Tall-sized cup of ice coffee from Starbucks is $ 2.25 ( 12 ounces ) while at Dunkin ’ Donuts it ’ randomness $ 1.99 for a small size ( 16 ounces ). several factors come into play why Starbucks coffees are expensive. You take into consideration the prime spots they ’ re located in, the popularity, the convenience, and the staff that ’ s highly trained. Starbucks may have a large following that ’ s why they ’ re still standing strong. But there are a lot of other people as well that prefer to get their chocolate somewhere else that ’ s much cheaper. Location Starbucks constantly chooses the best locations but even that comes with a price. If it ’ mho at a promenade, the rental fees would be steep. If it ’ randomness at an vacate lot, then you may have to rent a nibble of that set or even go through the necessity legal requirements to purchase it and then spend money to build the coffee shop. In decision, it ’ s not just the license fee you ’ ll have to worry about. It ’ randomness all these early expenses besides that come with putting up a Starbucks in your sphere. Working with the Public Anytime you ’ re serving the public there will be challenges. One challenge expressed by managers of Starbucks is how to deal with the bathrooms at these coffee shops. If you ’ re in a downtown area, often the only place to find easing is at a Starbucks. This has led to conversations on whether or not to allow communities like the dispossessed should be able to use these facilities, while at the like time not disrupting the comfort of customers. In general, Starbucks allows anyone ( customer or not ) to use their bathrooms. They besides provide free cups of water upon request. These larger society issues are considerations that will continue to come up. We don ’ t have any specific answers for you here, but it ’ s a fact that you should be mindful of before running a license memory .

Is the Starbucks Brand License Right For You?

If you ’ ve read through the whole guidebook then you know that the bulk of your concerns in having a Starbucks release are the expenses. Business-wise, you can see via the statistics that this coffee bean patronize is doing well cosmopolitan but you may besides have to do a discipline around your area whether or not people would be interested in a Starbucks, particularly when the rates of their coffee prices can be a short expensive. indeed if you have the means and the money to be able to license a Starbucks, it doesn ’ t hurt to apply. What is an alternative coffee house franchise? If you find a Starbucks exceeds your budget, consider Dunkin ’ Donuts. Their initial franchise tip is $ 40,000 to $ 90,000. You ’ ll besides get a line of beverages and baked goods if this is the industry you ’ re looking into connect. Another alternative is Dutch Bros, a drive-through coffee chain. Their franchise fee is $ 30,000 and they have a wide variety show of hot and cold coffee bean drinks arsenic well as tea, smoothies, and energy drinks. Where I live dutch Bros is an highly popular concept. however, their baked goods are not be angstrom extensive as Starbucks and Dunkin ’ Donuts.

Another option would be to sell Starbucks items like their packaged beans and tea. The guidelines for selling Starbucks products like pre-made ice coffee is much lower. Though the know wouldn ’ metric ton be the same as operating a coffee bean shop, you can sell Starbucks branded merchandise. In decision, make certain to weigh your options and your budget when you choose to license a Starbucks. Remember there are many options for early coffee bean businesses you can choose from that are besides performing well and growing fast. You ’ ve got enough of options.

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