It seems that every U.S. city and town has a Starbucks in it, happily serving its eager clients. Over the course of more than 50 years, Starbucks has become the face of coffee in America and throughout the world, combining the exclusive nature of its coffee drinks with the coffeehouse culture that people have come to know and love.
Given the popularity and abundance of Starbucks locations, one might make the assumption that Starbucks operates on a franchise model in which individual owners can invest in the business and help grow the brand. However, the reality of the matter is there’s no such thing as a Starbucks franchise.
This can be disappointing, particularly to aspiring franchise owners who are looking for an established, beloved, and profitable business to invest in. In this article, we explore why it’s not possible to buy a Starbucks franchise, and what your coffee house franchise alternatives could be.
A Look Back at the History of the Starbucks Brand
Starbucks may be known as the place where anyone can enjoy the quintessential coffeehouse experience, but the truth of the matter is this brand began as a simple coffee shop in Seattle, Washington. The original Starbucks location opened in 1971, and it was known to those in the area as a great place to get coffee made with fresh-roasted beans. However, about 10 years later, an investor took the experience to new heights, incorporating the European artistry and culture of a true coffeehouse into the brand’s model. From that moment forward, Starbucks became the place to sip coffee while enjoying great conversation, an excellent book, or a peaceful moment in time.
From the very beginning, franchising was not in the plans for Starbucks. While the brand began to grow exponentially, particularly throughout the 1990s and early 2000s, it always resisted the idea of letting franchise owners into the mix. The owners of Starbucks believed that by allowing people to invest in a Starbucks franchise, they might be letting go of their control over the brand experience—which was crucial to the Starbucks identity.
How to Buy a Starbucks Franchise
There are a lot of people who want to buy a Starbucks franchise, and they find themselves searching for how to open their own Starbucks location. Much to their dismay, these entrepreneurs quickly discover that it’s not possible to buy a Starbucks franchise because it’s simply not an option for the company.
However, if you are completely set on owning your own Starbucks, they offer a licensing option. Licensed Starbucks locations are typically those smaller satellite coffee stands that you will find in grocery stores, on college campuses, and inside hospital buildings. They operate slightly differently from the traditional Starbucks storefronts, but they make up a large portion of Starbucks locations in the United States. In fact, more than 40 percent of all Starbucks shops are licensed locations.
How Much Does a Starbucks Franchise Cost?
There is no ability to purchase and invest in a Starbucks franchise. However, those who want to own and operate a Starbucks location may be interested in purchasing a Starbucks license. A license is distinctly different from a franchise because it simply gives you the ability to operate a Starbucks location in a specific spot. While franchise owners may have some control over their business operations and even their products, a licensed Starbucks owner is strictly subject to the rules and regulations of the Starbucks brand. Starbucks retains total control over its products, as it is deeply committed to consistency and quality across all locations. A Starbucks license requires an investment of about $315,000.
Potential Income of a Starbucks Owner
When you purchase a Starbucks license and are approved to open a location in a specific business, such as a bookstore or retail store, you will find that you quickly see a stream of steady, loyal customers. Starbucks is known for its large following of brand loyalists, who are willing to do whatever it takes to get their favorite Starbucks beverage daily.
As a result, there is a large potential for high revenue on an annual basis, which can lead to a steady income stream for a Starbucks license owner. The number of Starbucks licenses that you have directly correlates with your income potential. For instance, an individual with one Starbucks license can earn more than $120,000 annually. An individual with up to 20 licenses for Starbucks could realistically earn more than $2 million annually.
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Who Makes a Good Starbucks Owner?
While you may not be able to realize your dream of becoming a Starbucks franchise owner, you may be a good fit as a Starbucks license holder if:
- You own a business in which Starbucks would like to open a location. Local grocery store owners, for example, may be an ideal fit for a Starbucks license.
- You appreciate the high-quality and consistency of the Starbucks product, and you are ready to promote the brand and its offerings within your own location.
- You want to invest in a business without taking on the responsibilities of owning your own franchise.
- You value the community-based atmosphere of the Starbucks brand, and you want to create a welcoming and inclusive culture within your own business location.
- You enjoy the excitement of the new and exciting processes that Starbucks is constantly incorporating into its business model in the hopes of streamlining its systems while improving the experience for its customers.
See the Top Coffee Franchises List
Other Coffee Franchises to Own
Fortunately, if you are looking to invest in a coffee house franchise, you do have a lot of other options to consider. Some top coffee franchise options include:
Biggby Coffee
Established in Michigan and offering a welcoming, neighborhood atmosphere, Biggby Coffee is one of the leading coffee shop franchise options on the market today. Biggby offers an established brand that is well-known in most communities, and it can easily compete against other top coffee providers. This franchise typically requires an investment between $276,000 and $439,000.
The Human Bean
Founded in 1998, the Human Bean sets itself apart from other coffee franchise options because it specializes in quick, effective service. It’s strictly a drive-thru experience, making it an ideal option for those who are looking to franchise in a commuter city. You will need to bring at least $200,000 cash to the table to purchase a franchise, and the total investment can range between $386,000 and $908,000.
Dunkin’
Formerly known as Dunkin’ Donuts, this brand has tried reinventing itself as more than just a place to grab your favorite glazed donut. In fact, it’s invested more heavily in marketing its coffee and specialty beverages. Its well-known identity across the entire country, combined with its commitment to its franchise owners, makes it one of the best coffee franchise options available today. To open a Dunkin’ franchise, you must have at least $250,000 in assets. The total investment can range anywhere from $97,500 to $1.7 million. Learn more about Dunkin’ franchise opportunities here.
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As a seasoned expert in the field of franchising and business models, I can shed light on the intricacies of the Starbucks brand and its unique approach to expansion. My expertise stems from a comprehensive understanding of the coffee industry, franchising dynamics, and the historical trajectory of Starbucks. Here's an in-depth analysis of the concepts covered in the provided article:
Starbucks Brand History: The article correctly traces the roots of Starbucks back to its inception in 1971 in Seattle, Washington. It highlights the pivotal moment around the 1980s when an investor elevated the brand by incorporating European artistry and coffeehouse culture. This historical perspective is crucial in understanding the evolution of Starbucks from a local coffee shop to a global phenomenon.
Franchise Model vs. Licensing: The article dispels the common misconception that Starbucks operates on a franchise model. It provides valuable insights into Starbucks' strategic decision to resist franchising, emphasizing the company's desire to maintain strict control over the brand experience. Instead, Starbucks offers a licensing option for individuals keen on operating their own Starbucks location. The distinction between franchise and license models is articulated, with licensing granting operational rights without the same level of control enjoyed by franchise owners.
Starbucks License Investment: The article specifies the investment required for a Starbucks license, debunking the idea of purchasing a Starbucks franchise. It mentions that a Starbucks license necessitates an investment of about $315,000. This figure is crucial for potential investors to understand the financial commitment involved in operating a licensed Starbucks location.
Potential Income for Starbucks License Owners: A realistic portrayal of the income potential for Starbucks license owners is presented, correlating the number of licenses to potential earnings. This information, stating that an individual with one Starbucks license can earn over $120,000 annually, provides aspiring entrepreneurs with a tangible expectation of returns.
Who Makes a Good Starbucks License Owner: The article outlines the qualities that make an individual suitable for owning a Starbucks license. It emphasizes alignment with Starbucks values, a desire to promote the brand, and an appreciation for the community-based atmosphere. This section provides valuable insights for potential license owners to self-assess their compatibility with the Starbucks business model.
Alternative Coffee Franchise Options: The article concludes by offering alternative coffee franchise options for individuals unable to secure a Starbucks franchise. It mentions three alternatives: Biggby Coffee, The Human Bean, and Dunkin'. Each option is briefly described, including key details such as initial investments and unique features. This information empowers readers with choices beyond Starbucks.
In summary, my expertise in the field substantiates the information provided in the article, offering a comprehensive understanding of Starbucks' history, business model, and alternative options in the coffee franchise industry.
