The Pros And Cons Of Opening A Coffee Franchise

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From Franchise Gator

The days of walking into a local diner, or restaurant and asking for a cup of coffee are rapidly retreating. While there is still something to be said about the old fashioned “cup of Joe” that you can get no questions asked with free refills, the presence of a high powered, multi-flavored, option filled coffee is rapidly becoming the staple in the fast paced lifestyle American’s now lead. Many entrepreneurs in fact have found that the business of the “half-café, non-fat, triple tall, cinnamon white mocha” to be an extremely profitable and attractive business opportunity. The more American’s that are familiar with their latte’s mochas, and cappuccinos to get them through the day, the more small business owners are opening the local coffee franchise stand to offer alternatives in the coffee business world.

Owning a coffee franchise, however, is not the same thing as having a license to print money. There are some definite benefits to choosing a coffee franchise as opposed to a food franchise or other business opportunities within the franchise market. There are also some serious concerns about the coffee franchise that, if not addressed, could keep it from being successful.

One of the benefits to a coffee franchise is that people are searching for your product every day. Whether it’s the morning caffeine fix, or the relaxing latte on a Saturday afternoon during an outing, there is a definite drive in the American lifestyle to seek daily in most cases that cup of coffee. The advent of non-coffee drinks made in coffee shops also helps drive the continuous flow of customers, even those who are trying to limit their coffee intake. From Italian sodas, milkshakes, green teas, smoothies, and decaf drink options there is enough variety in the coffee shop market to continue to keep a regular flow of repeat customers satisfied.

The small business world is eagerly watching and waiting to see what sort of boost or hindrance the political changes will bring them in the coming 2008 election as well. For many small business owners their personal passions that might lead them in a democratic direction have been halted by the republican sympathies to businesses and corporations. In a questions and answer session Barack Obama told the San Francisco Chronicle the day before Super Tuesday “Many small businesses are struggling with the cost of health insurance, and I have introduced a plan that will save businesses $140 billion annually in premiums. My health care plan will help small businesses that want to cover their employees by letting small firms buy into a new low-cost, high-quality national health plan similar to the one offered to members of Congress.” While the skepticism of anything said by a candidate in the weeks and months prior to an election is at a natural high, the potential benefit to many small businesses exists in a large-scale solution to health insurance. The coffee franchise is often a small business that has a difficult time providing health benefits for its employees especially when compared to the benefits that a large company like Starbucks can provide for a similar job. The question for the coffee franchise owner is becomes “how involved is the parent company?” truly that is the balance that every franchise owner needs to figure out when deciding to run a small business. What will the level of involvement be by the larger parent company, and what will be the responsibility and privilege of the franchise owner to oversee and determine. In a sense it is very similar to the political question that all American’s continually ask themselves as they look at Republicans and Democrats alike, what level of involvement will the government have over a business and a state and to what extent is the business free to determine it’s own course of action?

While those questions will never be answered fully to the satisfaction of everyone (or probably anyone) there are more than 2000 American’s per day who go into business for themselves and have to decide whether or not to be totally independent or take part in the many franchise business opportunities that are available to them. Biggby Coffee for example is a coffee franchise in the mid-west and south that provides it’s franchise partners a complete range of marketing and advertising services that help the franchises grow as a whole, while leaving the individual owners free to run their local coffee shop within the parameters that are reasonable to each specific location.

The coffee franchise is more than just a location to purchase coffee. It’s important when thinking about a location and a store what the customer is looking for in a coffee franchise. For many people who are only interested in acquiring their coffee on the go the familiarity and consistency of a recognizable name is very important, along with prompt service and accuracy. The small business of coffee shops though is not always about the product. Many coffee shops find themselves impromptu meeting rooms, and business areas. Many business such as OneCoach, which is a franchise, that provides training, coaching, and assistance to small business owners are based from the franchise owner’s home. In the case of OneCoach, and many other home based businesses there is a need to find a place to meet to discuss terms of contracts, locations, etc with their clients. Coffee shops provide the perfect meeting environment to work through all sorts of business issues without needing to have an operating space. Many home franchises use the local coffee shops as their primary place to meet clients and business service providers.

It becomes important for the business owner of a coffee franchise to think about what amenities he or she is going to make available to the customer who wants to conduct business in the coffee shop. It is generally assumed and preferred that a coffee shop provide some sort of internet connection. Whether it’s a subscription based service, or a more traditional free wireless internet router the presence of internet will make a coffee shop very attractive to businesses. Small businesses contract out various services as well and those meetings also take place in the coffee shop. For example the owner of a small business of DVDNow kiosks that provides people with the ability to rent DVD’s in  grocery stores, malls, and other public areas probably only has one or two members of the franchise team. This business is run from a home by one or two individuals and most likely will not have a business accountant as a part of the franchise. When calculating and figuring out taxes, therefore, they will need to outsource that service to a business like Liberty Tax Service. Liberty, which is another small business franchise opportunitythen assists DVDNow with their tax management and information, and where does all of this networking and business service practice take place? Oftentimes meetings, and even the services provided take place in a convenient local coffee shop that is nearby the operating areas of both of the franchises. While this is just an example it become evident the benefit and repeat business that surrounds the coffee shop.

When considering a coffee franchise all of these things need to be considered. What will the impact of the environment, employees, networking capabilities, etc be of the coffee franchise? What makes a good coffee franchisee is the ability to understand the overall purpose and benefit of the local shop. The environment and amenities while looked at a costs initially unrelated to the sale and purchase of coffee products can become the most significant factors in fostering a good environment for business and personal networking to take place, which will lead to high amounts of repeat business. So when considering the coffee franchise, know that while the coffee is the product, it’s the coffee shop that is really going to sell a customer on making a particular store “their” local coffee shop.

Original article: http://www.franchisegator.com/blog/franchise-articles/the-pros-and-cons-of-opening-a-coffee-franchise/