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 It Cost to Open a 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.
Frequently Asked Questions About Starbucks Franchise
Can You Open Your Own Starbucks?
Yes, but note that Starbucks no longer offers franchise operations and has no plans to franchise in the foreseeable future. However, their Seattle’s Best Coffee brand does offer franchise opportunities to qualified and select applicants, using a predefined set of criteria and focusing on multi-unit franchisees with a proven track record of success.
Also, Starbucks offers a variety of licensed store programs customized to meet the needs of various food service venues, such as cafes.
2. What Should I Consider When Starting A Starbucks Franchise?
- Business Location
- Foodservice experience
- Market demand
- Permits and licenses
3. How To Apply To Open Starbucks Licensed Outlets?
If you are still interested in opening a Starbucks licensed outlet, here is what you will need to do.
- Have a Competitive Position
- Apply for a License
- Prepare Yourself Financially
4. How Can One Start A Starbucks Franchise In Pakistan?
First and foremost, Starbucks is not a franchise; all locations are corporately owned and operated. However, you can start a Starbucks licensed store if you are willing to pay handsomely for the license without knowing if you can generate enough revenue to continue running the store. Nonetheless, the process is still the same;
- Have a Competitive Position
- Apply for a License
- Prepare Yourself Financially
5. How Can You Open A Starbucks In Honesdale, PA?
You cannot acquire a Starbucks franchise in Honesdale, Pennsylvania. Instead you can own and run a Starbucks licensed store if you have a favourable location and adequate funding to see it through. For those who already own a particular location or business, Starbucks can help them open up a new Starbucks in that location.
6. Is It Worth Working At Starbucks?
Yes, part of what makes Starbucks one of the best companies to work for are the benefits they offer employees, the teamwork that comes with the job, and great manager and partner relationships. Starbucks is known for giving their employees great benefits such as health coverage, 401(k) plans, parental leave, and tuition coverage, among other things. And the people that work there say this is one of the reasons they love their job.
7. How Can Your Business Serve Starbucks Coffee And Products?
Starbucks offers a variety of programs customized to meet the needs of various foodservice venues, such as cafes. For information and to submit a profile, please refer to Starbucks Foodservice section or you may contact the Starbucks Business Alliances Group at 1-800-344-1575.
8. How Much Does A Starbucks Make A Day?
Sales depend on foot traffic and what customers purchase. However, an average Starbucks does an average of $540,000 in revenue annually, $45,000 Per Month, and $1,500 Per Day, according to a US national study. A busier location can make a higher number of sales than these figures.
9. How Can You Identify A Property To Starbucks In Correspondence?
Starbucks boasts of thousands of stores and street names, and city names tend to be similar across North America. Therefore, they use store number and state to differentiate stores. The “date letter” you receive from Starbucks will indicate the store number they will assign to the property, along with a short name—Store 301, Pike Place Market, WA—for instance.
10. How Should I Respond To A Default Notice From Starbucks?
You Are Expected To Respond In Writing To Starbucks Legal Notice Address.
11. What Are People’s Experiences Owning A Starbucks Franchise?
It comes as a surprise to many that you can’t buy a Starbucks franchise, no matter how much you stump up. However, for previous owners of Starbucks Franchise, their experiences with the company are summarized as follows;
- Iron-clad brand guidelines
- Careful hiring practices
- Quality control
- Great communication from corporate head office to front line staff.
12. How Profitable Is A Coffee Shop In The United Kingdom?
The United Kingdom is one of the leading countries with a strong coffee shop industry. With the British coffee market growing about 10% every year and the industry currently making up about £ 17.7 billion of the economy, the business continues to grow.
The average turnover is between £100,000 and £150,000, with 22% of all cafes and coffee shops achieving this. The average value of a café is £73,082. The lowest average is £54,218 and the highest is £91,947. Given their similar nature, coffee shops have an average value of £68,873.19. Coffee shop owners in the UK can earn around £46,000 and £120,000 gross per year.
13. What Is The Required Investment To Start A Starbucks Franchise Business?
Starbucks currently does not franchise in the United States or Canada. Starbucks at one point did offer a franchise in Europe; however, currently all European franchises seem to be taken. Another Starbucks option is to open a licensed store. Opening a “licensed Starbucks” will cost you roughly $315,000.
14. How Much Money Can You Make Owning A Starbucks?
According to Starbucks tax fillings, the reported profit is roughly about $108,000 per store annually, but their profit margin may be actually much higher.
15. Is Owning A Starbucks Profitable?
Starbucks is one of the leading and most popular coffee providers in the world and has become a big part of customers’ daily lives, and there is no doubt that owing a Starbucks will give a lot of rewarding benefits and outstanding success to the entrepreneur.
16. How Often Do You Get Paid At Starbucks?
Starbucks pays you bi-weekly; every two weeks, automatic deposit. Tips are done every week.
17. How Much Do Starbucks Baristas Make Hourly?
As of Mar 18, 2022, the average hourly pay for a Starbucks Barista in the United States is $11.64 an hour. Note that some see hourly wages as high as $16.11 and as low as $8.17, but majority of Starbucks Barista wages currently range within $9.86 to $12.74 across the United States.
18. Why Didn’t Howard Schultz Franchise Starbucks Stores?
Starbucks CEO Emeritus Howard Schultz long resisted franchising to maintain control over the Starbucks brand and culture—and it served him, Starbucks’ employees, and investors well. Starbucks has maintained continuity across its stores, in terms of products and customer service, by remaining company-owned rather than franchising.
19. How Can You Contact The Management?
In 2008, founder Howard Schultz launched the open innovation platform “My Starbucks Idea”. This platform encouraged customers and fans to share their ideas and suggestions for how to make the company’s beloved products even better. The format was simple.
All customers had to do was create a profile, write (and categorize) their suggestion, and submit it for others to comment on. If the idea gathered enough steam, or if the Starbucks administrators liked the looks of it, it could then be adopted by the company.
20. How Much In Tips Do Starbucks Baristas Make?
This depends wildly on the store, the location, the employees, and the customers. Typically they range between $1.20 and $1.80 an hour. Tips are split up among baristas and shift supervisors, but not given to managers, shift managers, or assistant managers.
21. Who Can You Contact If You Own A Property That Starbucks May Be Interested In Leasing?
The store development director in your area is your contact if you own a property that Starbucks is interested in leasing. You are advised to check the regional map to determine which regional office manages the geographic area of your property.
22. Where Do You Send The Tenant Improvement Allowance Checks?
You are expected to send the check to the following lockbox address and include the store number in the upper left hand corner of the check:
For U.S. checks, please mail to:
U.S. Bank Lockbox # 84348
Starbucks Coffee Company
P.O. Box 84348
Seattle, WA 98124-5648
Or for Canadian checks, please mail to:
U.S. Bank Lockbox #84263
Starbucks Coffee Company
CAD Lockbox #84263
Seattle, WA 98124-5563
23. Why Does Starbucks Prefer Licensed Shops Over Franchise Locations?
Starbucks prefers to completely own each of its locations, so that they can maintain and ensure that everyone enjoys the overall Starbucks experience. The company does not offer franchising except in Europe.
24. Which City In The United States Has The Largest Number Of Starbucks Stores?
According to company statistics, New York City has more Starbucks stores than any other city in the United States, with 241 establishments.
25. How Much Money Does The Average Starbucks Take In Per Day?
According to reports, Starbucks makes 80% of its revenue from the 15,000 coffee shops it owns and operates worldwide. Therefore: ($26.5B x 0.80) / 15,000 / 365 days/year = $3,800 per day in company-owned stores (most stores). That’s a profit per store of $520/day (avg. using 13.6% profit).
26. Which Country Has The Largest Number Of Starbucks Stores Worldwide?
The United States and China came tops in the ranking of countries with the largest number of Starbucks stores worldwide as of September 2020.
27. Where Do You Send Your Year-End Cam Statement For Starbucks, And How Long Will It Take To Get Your Reconciliation Check?
You are expected to send the CAM statement to Starbucks legal Notice Address. You should receive a response to your reconciliation statement within the prescribed time per the terms of the lease—usually 60 days from our receipt date. Note that Starbucks will either mail you a check for the outstanding amount or notify you of exceptions/information required for resolution.
28. Why Does It Cost So Much To Open A Starbucks Franchise?
Starbucks no longer offer franchise opportunities. However, a Starbucks licensing contract doesn’t come cheap too, but this price tag is not without high benefits. Starbucks has been consistent in having increasing profit margins every year. Nonetheless, the basic reasons why a Starbucks licensing contract can be quite expensive include;
- Store design
- Menu and equipment
- Training and support for your staff
- Whole beans coffee and other merchandise
- Exclusive food and bakery program
- Marketing strategies
29. What Is The Clear Plastic Sticker On New England Coffee Bags For?
It is a one-way valve for the coffee to release redundant CO2 gas out of the package.
30. How Do You Request A Copy Of The Latest Financial Lease Administration Mailer?
By using the FLA mailer
31. Which Is The Most Expensive Starbucks Coffee Sold In The World?
The Most Expensive Starbucks Coffee in the world is sold for $6.05 in Denmark stores.
32. Starbucks Is Banning Straws But Is It Really A Big Win For The Environment?
Yes it is! But even Starbucks does not dispute that the new lids use more plastic. However, they stress that “the strawless lid is made from polypropylene, a commonly-accepted recyclable plastic that can be captured in recycling infrastructure, unlike straws which are too small and lightweight to be captured in modern recycling equipment.
33. Which Starbucks Makes The Most Profits In The World?
The Shanghai Roastery has been confirmed by Starbucks as having the highest revenue of any single location, but it is much larger than a traditional Starbucks store.
34. How Do You Request A Copy Of The Annual Expense Budget Reconciliation Template And Instructions?
You can request and download a copy of the annual expense budget reconciliation template and instructions through the account management page on Starbucks official website.
35. How Do You Begin Discussions On Renewing Or Amending A Lease?
Every Starbucks leases come with a notice date that sets parameters around when the tenant can formally notify the landlord of intention to renew the lease or let it expire. If there is an external event that would cause you to begin this process sooner, phone the store development director in the regional office corresponding to the address of the property. Check the regional map to determine which regional office your store development director is based.