Many people rely on coffee for everything from staying awake to entertaining guests. Fresh coffee is quick and easy to pick up on the go, and it is a delicious treat for those who want to savor it in a coffee shop. According to Harvard University studies, more than 50 percent of Americans who are over the age of 18 drink coffee daily. If you are thinking of starting a coffee franchise, consider these issues.
Advantages Of Running A Coffee Franchise
You already have a business model. Developing a business model that yields consistent success and stability can take years or even decades to build. With a franchise, you get to use a proven business model that the company painstakingly built through trial and error. It is designed to help you meet and exceed your financial goals.
The overhead costs are reasonable. In comparison with retail, grocery and food chains, you have a smaller amount of overhead costs. You do not need to hire as many workers. Your inventory is simpler, and you do not have to buy as many dangerous pieces of equipment or face complicated insurance issues.
Coffee will not lose popularity. Coffee has been a major part of many societies across the globe for centuries. Most coffee franchises sell fresh coffee and bags of ground or whole-bean coffee. Even in the most recent recession, coffee sales remained strong.
Disadvantages Of Running A Coffee Franchise
The business has tough competition. You may be competing against independent coffee shops, which are considered trendy by society’s youngest generations. They love these shops because of their unique flavors, crunchy treats and free Wi-Fi. You must research your market carefully before choosing to open a coffee franchise at all, and you must consider it even more carefully before deciding which franchise to operate. Some companies’ models allow you very little creative freedom, and you may need one that allows more freedom if you have to compete with innovative independent businesses.
Startup costs may be high. When you open a coffee franchise, you typically pay a franchise fee. In some cases, some of the equipment needed may be included. You may receive a discount on other supplies and types of equipment. However, some companies offer a better value for your investment. Also, be sure that you can meet any sales minimums that may be required for a specific company.
You have to advertise more. With many types of franchises, you do not have to advertise as much. However, coffee franchises must advertise locally because of how competitive their specific market is. You have to continually find ways to engage the community and reward them for their loyalty while following the company’s business model.
If you can work past these disadvantages and find a coffee franchise that embraces innovation and creativity, you can turn your dream into a reality. Always compare sales minimums and business models before you invest in opening a coffee franchise.