Ever dreamt of owning a Starbucks franchise but don’t know how much it cost and where to start from? If that sounds like a truth, then you’re in luck. In this post, I’m going to tell you all you need to know about Starbucks franchise fees.
We’ll primarily be looking at how much it costs to open a Starbucks franchise and everything you need to know about the franchise. Aside from that, you will also get to learn how to start a Starbucks franchise, mow much a Starbucks store makes a year, and lots more.
So if you want to open a Starbucks franchise this year, you will definitely love this guide.
Let’s get started.
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What is Starbucks? | A Short History
It was founded by Jerry Baldin, Gordon Bowker and Zev Siegel in 1971, opening its first store across the street from the historic Pike Place Market in Seattle, Washington.
Starbucks was named after the first mate in Herman Melville’s classic novel Moby Dick.
In terms of who owns Starbucks?
Howard Schultz can be tagged as the person who owns Starbucks as he is the largest shareholder of the company.
Schultz joined the Starbucks Coffee Company in 1982 working as the director of retail and marketing.
He left Starbucks briefly to form his own coffee company, the II Giornale Coffee Company, but returned back in August 1987 but this time with a team of investors.
Howard Schultz purchased all of Starbucks Coffee Company’s assets and became the company’s chief executive officer, but at the end of 2016, he announced that he would be turning over the CEO role to Kevin Johnson.
Schultz still owns 33 million shares directly in the company and another 1.7 million shares indirectly through trusts.
He grew the company’s sales up to $5 billion.
Kevin Johnson took over from Schultz in 2017 and continues to serve as the firm’s CEO till date.
As the largest coffeehouse in the world, Starbucks targets majorly quality-minded coffee drinkers, making their coffees using automatic espresso machines for efficiency.
The company currently operates 30,000 locations in over 77 countries worldwide, serving both hot and cold drinks, whole-bean and micro-ground instant coffee known as VIA.
Starbucks also serves caffe lattes, full- and loose leaf teas including Teavana tea products, espressos, Frappuccino beverages, Evolution Fresh juices, La Boulange pastries, and snacks such as chips and crackers, and many more.
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Is Starbucks A Franchise?
Starbucks is NOT a franchise.
Despite having more than 24,000 locations worldwide, the company has refused to offer franchising to its standalone stores.
Howard Schultz once said in an interview and I quote:
We believed very early on that people’s interaction with the Starbucks experience was going to determine the success of the brand.
The culture and values of how we related to our customers, which is reflected in how the company relates to our employees, would determine our success. And we thought the best way to have those kinds of universal values was to build around company-owned stores and then to provide stock options to every employee, to give them a financial and psychological stake in the company.
So, if you have plans of opening up a Starbuck franchise, you may have to reconsider because the company does not offer franchising to individuals.
This means that the company offers a variety of other opportunities for established businesses to sell Starbucks products at their existing locations.
However, in situations in which a master concessionaire or if you can provide improved access to desirable retail space (such as an airport or a train station) or other company controls, the company may consider licensing its operations to such a company.
But there is still a high possibility of having your shop licensed, which means it is still owned by Starbucks.
Starbucks Franchise Fees | How to Get Started
Before we talk about Starbucks franchise fees and how to open one, there are a few things to note.
The Starbucks company will first determine if the existing business in question is a good fit for any of their programs… And if they are, they get granted permission to offer Starbucks products in their respective stores.
It’s also important to note that owning a licensed Starbucks shop means that your store is owned by Starbucks.
The Starbucks Coffee Company currently has no plans to franchise yet.
Starbucks licensing agreements help store owners with many of the aspects of the regular running of their business as in a traditional franchise agreement, including things like store design, the Starbucks menu, equipment, food, training and support, promotions, and onsite visits.
Starbucks doesn’t really have a standard criterion available for selecting candidates for a licensed store, but business owners can visit the Starbucks Branded Solutions website to get started and send an inquiry.
You will be required to create an account on the website first before you will be allowed to apply for a Starbucks licensed store.
Once registered, sign in to your dashboard.
Next, click on the drop-down menu that follows the instruction to Select Your Business Type.
Proceed to choose the business that most closely resembles your existing business type to begin the application for your license.
Once you are done filling out the form that pops out, click the submit button at the bottom.
You will then be contacted by a Starbucks representative within a few days who will determine whether or not your business is really a good fit for the Starbucks brand.
Starbucks has been expanding outside of North America since 1996. Today the company operates in at least 62 countries worldwide, with approximately 12,000 stores located outside of the United States.
It might also interest you to know that a new Starbucks store opens approximately every 15 hours in China, according CNBC.
There are already 3000 Starbucks stores currently operating in China, and there are plans to add to this by 2000 in 2021.
Starbucks is also looking to expand its presence in India where it already owns 75 high-performing stores, and which is expected to be a fertile ground for the company’s specialty tea brand – Teavana.
Starbucks is estimated to have over 10,000 stores worldwide – 4,400 of them are licensed.
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How Much Does a Starbucks Store Make a Year?
According to Statista:
Starbucks generated over 26.5 billion U.S. dollars in total revenue in 2019 – a seven percent (7%) increase over the past twelve months.
The stat also shows that the revenue of Starbucks worldwide from 2003 to 2019 amounted to approximately 237.35 U.S dollars.
Now, asking the question of how much a Starbuck store makes a year…
Unfortunately, the company does not disclose this kind of information to the public – it is against their policy. But as a public company, they are required to make a report of their annual revenue so that investors will see a reason to invest with them.
Starbucks does not disclose how much each of its stores makes yearly, but from analysis of their annual revenue, we can get a rough estimate of how much each store makes yearly.
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How to Start a Starbucks Franchise?
Franchising is a way to help stores to grow, but Starbucks prefers licensing to maintain better control over stores and product quality.
However, if you are looking to pay for a Starbuck license store, the cost is estimated at $315,000.
Now, a few may be wondering:
Is a Franchise a Good Investment?
These days, almost everybody wants to quit their 9-5 jobs in anticipation of being their own boss… And franchising seems to be one of the ways out!
Recently, the economic track record for franchises has been so solid.
The average annual job growth of franchises over the past 5 years has grown by 2.6%, nearly 20% higher than other business types – IFA.
With the right mindset, knowledge and discipline, venturing into a franchise is bound to yield good fruits.
Starbucks Franchise Alternatives
There are definitely other franchising options than Starbucks…
For more than forty years now, the franchise industry has been going strong and more competitive than ever.
Entrepreneur recently published its 2020 Franchise 500 Ranking, listing the investment cost range for each of the 500 most popular franchises.
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Hopefully, you now have all the necessary information regarding the Starbucks franchise fees and how to start up Starbucks franchise.
As you can see, the process is not entirely difficult once you meet up with their requirements, and it’s very profitable. Just follow the steps above and don’t forget to let us know if you have questions.