The idea behind coffee franchises is more than just the place for a caffeine fix.
It is a convenience for many to have a quick chat, business conversation or taking family for a treat.
Australia, same as many developed nations crave for coffee.
However, anyone can serve this hot beverage.
The point of the franchise coffee shops is to attract customers using coffee but sell other products like cakes, cookies, pies and sandwiches. In essence, the coffee franchises follow petrol station business model. The difference is that petrol stations attract customers with petrol to purchase other products. Coffee franchises use coffee to do the same thing.
As long as people can afford to go out, coffee franchises will attract crowds.
The business model of the franchise coffee shops is based on a simple principle that deserts and light meals are perfect for strolling shoppers.
If you are really hungry, you go to McDonalds or Hungry Jack.
Thus, for breakfasts, lunches and dinners the fast food franchises will cater for the needs.
For a quick hot beverage indulgence, a bit of rest and the cosy talk - the coffee franchises rule the market.
Therefore, coffee franchise opportunities have been confined to shopping centers and business districts. However, more adventurous franchisors quickly realised that franchise coffee shops are suitable to other environments. Thus the era of the mobile coffee franchise and the drive thru coffee franchise began. The question is: where is the profit? Unfortunately, coffee and other hot beverages do not boost profits for the franchise coffee shops.
Most conventional coffee franchises still need to sell cakes, sandwiches and pies to meet the day's end. If you buy a cappuccino then it takes about 2-4 minutes to make one. Thus, the employee who earns $10/hour will take over 40 cents for each cup he or she makes. If the cappuccino costs $3.50 then $3.10 is left.
The price for coffee beans, electricity and the rent can further reduce the profit to $2.20 (for each 2-4 minutes of the operation). Thus, even the great coffee products cannot guarantee comfortable returns. However, busy coffee shops constantly attract customers. Very often the busy coffee franchises introduce new items on the menu. In some cases, the successful outlets become direct competitors to the fast food businesses.
The coffee franchises' cost depends on many factors but the brand, location and the type of the business are the key components.
The well known brands will require an investment of $250K-$350K.
The top players can easily sell for $500K in the prestigious locations.
Cafe Guru, Hudson Coffee and Jamaica Blue sell for $200K-$350K. The Coffee Club can costs over $400K. Some Coffee-Cake outlets also follow the same price-line.
The mobile coffee franchise is much cheaper. The famous Cafe2U sells for $125K + GST. The mobile coffee franchise is suitable for those who cannot afford high running costs (especially the lease). At the same time the business is very flexible and convenient. But there is more... The modern idea of the drive thru coffee franchise brings together benefits of a conventional coffee shop and the mobile coffee franchise. The drive thru coffee franchise is not only the novelty but also quite a success. One of the best performers in the business is Late Cartelle - Coffee Drive - Thru. Late Cartelle offers premium coffee with a fast service. This drive thru coffee franchise sells for $180K-$220K plus $30K in franchise fees.