Do you want to know how much it cost to open a Starbucks franchise? If YES, here is everything you must know about Starbucks licensing fee & franchise cost.
Starbucks started as a store that sold premium roasted coffee beans in 1971, until Howard Schultz bought over the company and turned it into a cafe chain that sold ready to drink latte, cappuccino, Frappuccino and various kinds of other drinks and breakfast snacks.
Till date, Starbucks has over 25,085 stores in over 100 countries of the world and their revenue run into billions. Though Starbucks does not offer franchise, but if you want to be a part of this chain, you have to apply for licensing from them. Here is a step by step guide on how to go about it.
How Much Does It Cost to Open Starbucks Franchise?
The bad news for now for those intending to acquire this franchise is that Starbucks is not a franchise. Despite having more than 25,000 locations worldwide, Starbucks has refused to franchise its standalone stores. The only way you can get a piece of this exceptional coffee company is thorough getting a licensed shop, which invariably means that your store is owned by Starbucks.
However, this does not mean you can’t make money from your Starbucks ownership. You will still reap all the full benefits of being part of the Starbucks brand
Licensing Fee – $315,000
The average cost of opening a Starbucks licensed store is roughly $315,000. Starbucks has about 4,400 licensed shops and the company prefers to use licensing in order to keep more control over its stores and invariably the quality of its products.
Licensees don’t own the stores, as franchisees do; they basically rent the Starbucks brand by paying a licensing fee. Only about one in five Starbucks stores in Europe, the Middle East, and Africa are company-run. In Asia, Starbucks’ current top region of growth, a little less than half are company-operated.
Estimated Total Cost of Starbucks Franchise
To acquire a Starbucks franchise, you are expected to have about 500,000 pounds in liquid assets. This coffee chain is estimated to be worth much more than $55.94 billion and Starbucks CEO Howard Schultz has a net worth of $2.1 billion.
The first thing to do when seeking to get a Starbucks franchise is to ensure that you live within the required location, which is Europe.
If you don’t reside in Europe, then you must be willing to move or change location. The next step is to make an application towards that fact. After sometime, you would receive feedback as to whether your application was accepted or rejected.
If your application was approved, then you would be required to pay the fees and start the training program. The training would be for you and your staff. Once you open your coffee shop, you should start making plans to open other stores too.
In fact, you are mandated to open at least 4 stores in one year and a total of 20 stores under 5 years of the initial agreement.
Steps on How to Acquire a Starbucks License
In order to get a Starbucks license, the intended licensee has to follow the following procedures.
- Visit the Starbucks website and look out for the icon reading, ‘apply for license.’
- Click on the icon to reveal the drop down menu. From the drop down tray, find the business description that best suits what you have in mind, then click on submit.
- Next, you would be required to write a formal application and fill out your business location, assets and liabilities including the net worth of your business and the cash you have at hand.
- You can now submit your application and wait for feedback from the Starbucks team.
Though Starbucks does not currently offer franchise, but the company had once franchised its business. Starbucks opened its first franchise store in Liphook, in the Eastern district of Hampshire. For you to be able to open a Starbucks franchise, you must reside in Europe, preferably France or England.
Before you would be allowed to open a Starbucks franchise, you must fulfill the following conditions. Note that these were the conditions required from when Starbucks was still franchising.
- You should own liquid assets of about 500,000 pounds. This money would be used to set up a suitable Starbucks structure for you.
- You would have acquired a lot of experience in the food and beverage industry and you should own or be running a multiplication business or restaurant. The restaurant you are managing should be about the size of Starbucks.
- You should be willing and able to open a lot of units of Starbucks in a very short time. You should be able to open at least 20 locations in 5 years of starting the business. It should be known that Starbucks first 45 franchised locations were owned by 9 franchisees only. That is an average of 5 Starbucks locations per owner. After the first 9 franchisees, Starbucks decided that it has had enough of franchises.
- Starbucks would assist the franchisee in getting a suitable location, and the company’s development team would always be on ground to see that the franchisee keeps to all the rules.