Best Coffee Franchises
Coffee is an American obsession – Americans spend over $1,000 on coffee every year. 70% of Americans say they drink at least one cup of coffee per day. That translates to drinking about 11 pounds per person per year. And we are starting to spend even more on coffee, with ‘gourmet’ coffee becoming a huge and growing trend. This has not gone unnoticed, and coffee franchises are springing up all over the place. In 2018, Starbucks and Dunkin’ Donuts alone opened more than 1,100 new locations in the U.S.
With so much growth – and highly coffee-reliant customers – anyone interested in opening a franchise should definitely be looking at coffee chains. Owning a coffee store means that you can appeal to just about every American customer and joining one of the best franchises means you are serving coffee that customers already know and like. But what are the best coffee franchises to buy? Well, it depends on what you are looking for in a franchise. Some people want to make the most money, others want the lowest start-up costs, and still, others want to join the most popular. To help you sort through all your choices, we have researched some of the best coffee franchises in America today and listed them below.
[Note – all data is locations in the U.S. only – international locations are not included.]
Coffee Franchise with the Highest Revenue: Starbucks
The first company on this list will probably not surprise you: Starbucks makes the most revenue per store of any coffee chain in America. In fact, an average Starbucks makes about $1.35 million each year. The company is well known for its quality gourmet coffee, and for being a local meeting place for people from all walks of life. Starbucks is also known for its great employee benefits, which include health insurance, paid time off, and even college tuition coverage. With over 30,000 stores in 80 countries – Starbucks is the market leader in coffee and shows no signs of giving up its top spot any time soon.
But there is a major drawback to Starbucks – they do not follow traditional franchising set up in the U.S. Instead, they follow a licensing system where the company keeps ownership of the store and you only run it for them. While there are some rare exceptions for people who can offer Starbucks an amazing location or another opportunity, in general, you can’t own a Starbucks in the U.S. If you are determined to own a Starbucks, check out their international operations where the company does allow traditional franchising.
But despite this drawback, we still strongly recommend giving Starbucks a chance. As a Starbucks licensee, you can still have a great opportunity to work for perhaps the #1 coffee company in the world today.
|2019 # of Locations||15,041||Total Set-Up Costs||$300,000 – $400,000|
|Required Liquid Assets||Estimated $700,000||Licensing Fee||$300,000 – $400,000|
|Required Net Worth||N/A||Ongoing Fees||~7% of Sales|
Coffee Franchise that is Most Popular with Customers: Dunkin’
The next on the list is also a fan favorite – quite literally. In 2019, Dunkin’ was voted as the most popular coffee store in America by The Harris Poll. The company actually changed its name from Dunkin’ Donuts to just Dunkin’ in order to reflect the evolution of the company to focus more on non-donut products like coffee. The company also has coffee as its core marketing focus with its “America Runs on Dunkin’” campaign. And America does seem to be running on Dunkin’ these last few years – the company said it sold over 2 billion cups of coffee in 2017 alone. That’s a lot of beans.
But what makes Dunkin’ so popular with Americans? And how can it have beat out chains like Starbucks for the top spot? Well, according to the Harris poll, customers liked the company’s devotion to high-quality coffee. That may seem a very generic reason to like coffee, but it might be a combination of high-quality coffee at prices much less than those of Starbucks. For example, a Venti (20 oz) coffee at Starbucks costs about $5, while a medium coffee (24 oz) at Dunkin’ only costs about $2. Much more for your dollar if the quality is similar.
|2019 # of Franchises||9,499||Total Set-Up Costs||$0.4M – $1.6M|
|Required Liquid Assets||$125,000 – $250,000||Franchise Fee||$40,000 – $90,000|
|Required Net Worth||$250,000 – $500,000||Ongoing Fees||~11%|
Coffee Franchise with the Highest Franchisee Satisfaction: PJ’s Coffee
Now that we’ve gone through some names you already know, let’s talk about one you probably don’t know: PJ’s Coffee of New Orleans. PJ’s was voted the best coffee chain for Franchisee Satisfaction by Franchise Business Review. PJ’s beat out the largest chain in the country, despite only, has 89 locations nationally. But while PJ’s is small, it’s growing very quickly. In the past 6 years, they have grown 65% in a number of locations, and over the past 4 years, their stores have seen an average of 7.4% increase in sales every year. The company is also starting to expand internationally in Kuwait, Vietnam, and Malaysia. So, while you may not have heard of them yet, you probably will very soon.
But while all this is nice – what makes working as a PJ’s franchisee so much better than any other coffee chain? According to franchisees, the company culture is the main benefit. The company also offers its franchisees support in the form of training, profit and loss analyses of locations, and supply partnerships. PJ’s also has a strong commitment to top-quality sourcing, buying only the top 1% of Arabica beans on the market. At the same time, they work directly with coffee growers to get the best beans and pay more directly to the farmers. Combining a good company culture, strong franchisee support, and a commitment to top quality sourcing, there are lots to love at PJ’s Coffee of New Orleans.
|2019 # of Franchises||Estimated 130||Total Set-Up Costs||$188,000 – $580,000|
|Required Liquid Assets||$100,000 – $250,000||Franchise Fee||$35,000|
|Required Net Worth||$300,000 – $750,000||Ongoing Fees||7%|
Coffee Franchise with the Lowest Start-Up Costs: Biggby Coffee
Last on our list is Biggby Coffee. This is another franchise that you likely haven’t heard of since they only have 240 locations. Biggby Coffee brands itself as a fun and supportive place to work for both franchisees and employees, saying that’s its first mission is to make people happy. According to its website, Biggby is one of the fastest-growing coffee franchises in America. The company has grown over 20% in the last three years and seems to be aiming higher still. So, this can be a good opportunity for people interest in owning their own company but wanting to be connected to a larger company with a positive culture of happiness and support.
But another major benefit of Biggby’s Coffee is its relatively low start-up costs. The company estimates that total start-up costs will run about $224,000 for new franchisees. This may not be pennies, but it is much lower than what it takes to open most coffee shops (opening a Dunkin’ can cost up to $1.6M). this franchise would be a good opportunity for people who have had modest financial success in the past but are looking to go to the next step and own their own business.
|2019 # of Franchises||240||Total Set-Up Costs||$224,000|
|Required Liquid Assets||$30,000||Franchise Fee||$20,000|
|Required Net Worth||N/A||Ongoing Fees||6% of Sales|
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