Which Coffee Shop Franchise Brand is Good and Reliable? How Much Does it Cost to Open a Franchise Coffee Shop?

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Is Coffee Franchising Really Easy? A Reality Check

"Young people don't know what to do for entrepreneurship? Join XX coffee shop! Zero threshold, easy to start, effortlessly become a boss." Recently, the success story of a coffee brand's franchising has caught the attention of this writer!

In the past year, the topic of coffee entrepreneurship has become increasingly popular. Many young people feeling exhausted in the workplace have started paying more attention to the impulse of starting their own businesses. However, for those with limited funds and no relevant industry experience, entrepreneurship is far from easy.

As a result, coffee shops—which seem to require fewer technical skills, involve less overall investment, need minimal management, have lower work intensity, and appear relaxed and artistic—have become the focus of attention for many young entrepreneurs.

But while it seems easy, when it's time to roll up your sleeves and get started, many don't know where to begin or how to promote their business. Consequently, coffee brand franchising has become a key consideration for many people.

Is reality as easy as it appears in promotional materials? To find out, this writer investigated several current coffee brand franchising models:

Franchising Models for Well-Known Brands

① Having a storefront that meets the brand's specified area requirements, paying a certain franchise fee, submitting an operational security deposit, cooperating with the brand's store renovation, equipping the store with required equipment, and using the brand's designated materials and menu.

② Having a storefront that meets the brand's specified area requirements, with zero franchise fee, submitting an operational security deposit, cooperating with the brand's store renovation, equipping the store with required equipment, and using the brand's designated materials and menu. The brand distributes profits to franchisees through a gross profit return model (where all franchisee revenue goes to the brand, which then deducts costs and returns a certain percentage to the franchisee).

Franchising Models for Lesser-Known or New Brands

① Having a storefront that meets the brand's specified area requirements, paying a relatively small franchise fee, submitting an operational security deposit, cooperating with the brand's store renovation, equipping the store with required equipment, and using the brand's designated materials and menu.

② Having a storefront that meets the brand's specified area requirements, with zero franchise fee, submitting an operational security deposit, cooperating with the brand's store renovation, equipping the store with required equipment, and using the brand's designated materials and menu. From the beginning of operations, the brand charges a percentage of the franchisee's revenue.

Summary

Franchises that charge fees: Store profits belong entirely to the franchisee, but franchise fees typically exceed 100,000 yuan.

Franchises with no fees: Either all store profits go to the brand, which then returns gross profits to the franchisee after deducting costs, or the store must share a portion of its profits with the brand.

The Biggest Cost of Coffee Shop Franchising Isn't the Franchise Fee!

Store rent, security deposits, store renovation, equipment investment, material costs, labor costs, utilities—these are all significant expenses!

According to our research, while franchisees can choose their store location, it must comply with brand requirements. Typically, storefronts need to be at least 30 square meters. You can research the rent for qualifying stores in your current area.

Security deposits: To protect the brand image and prevent franchisees from engaging in activities that harm the brand during operations, an operational security deposit starting at 10,000 yuan is required when joining. Generally, if no operational issues arise when the franchisee and brand end their partnership, the brand will refund the security deposit.

Store renovation is typically divided into two parts: The brand ensures brand image consistency and will approve renovation designs. The franchisee needs to pay related design fees (starting at 1,000 yuan), and then renovation costs are calculated per square meter (starting at 20,000 yuan).

Store equipment: Including coffee machines, grinders, ice makers, water purifiers, refrigerators... Based on current observations, the minimum equipment investment starts at 70,000 yuan (all domestic brands), with the highest reaching 100,000+ yuan.

Materials and supplies: The initial cost for materials and supplies starts at 50,000 yuan, including all items needed for store operations and drink preparation. Subsequent material and supply costs depend on the actual business situation.

Labor costs: Whether you hire staff or not, even if the franchisee works alone, the minimum monthly cost is 4,500 yuan per person. Then there are utilities and miscellaneous expenses.

Without Considering Franchise Fees, What's the Initial Investment for a Franchise?

A rough calculation shows that a coffee shop from joining to starting operations—regardless of brand reputation—requires initial costs (excluding franchise fees) of: 10,000 yuan for security deposit, 6,000+ yuan for rent, 9,000 yuan for labor (it's impossible for one person to do everything), 1,000 yuan for design fees, 20,000 yuan for renovation, 70,000 yuan for equipment, and 50,000 yuan for materials and supplies, plus utilities, totaling nearly 170,000 yuan. Franchise fees are added based on actual circumstances.

Are Franchise Products Profitable?

Many people choose franchising because franchise stores have established production, sales processes, and the brand's own traffic, so they believe their stores will immediately have business. In reality, however, because all materials and supplies are designated by the brand, and product profit margins are fixed, franchisees actually earn very little profit.

What to Consider When Choosing a Franchise Brand?

Looking at the initial investment for franchise stores (excluding franchise fees), such amounts are sufficient to establish a completely new coffee brand on your own. Additionally, you wouldn't be subject to various brand restrictions and could better choose and adjust product production and material costs.

However, brand franchising continues to attract attention, proving that many entrepreneurs have no concept of business operations and hope to learn more through cooperation with brands. Therefore, when choosing a franchise brand, pay attention to the following points:

1. Check the size and legitimacy of the company, and the credit status of the company's legal representative/brand founder/owner.
2. The brand's longevity and stable reputation. (Don't trust brands that are just starting out or suddenly became popular online. Some brands appear hot now but might disappear soon.)
3. Whether there's a mature business model. (Not the type that promises "the brand and franchisee will grow together.")
4. Whether there's a classic, mature product line. (Not just focusing on trendy products from a certain period—can the brand adapt and change product plans when these products lose popularity?)
5. Read all contract terms carefully when signing, and watch for word games.
6. Remember to ask what other services are charged—POS systems, online operations, etc.
7. Whether the brand provides timely and practical help to franchisees during operations.
8. There's no such thing as a free lunch in this world—never be tempted by small bargains.
9. Record all conversations in audio format.

Final Thoughts

Entrepreneurship isn't easy, and being a boss isn't relaxing!

Whether starting your own coffee brand or franchising, neither has zero thresholds, nor allows you to easily become a boss. Being a boss isn't relaxing—it comes with significant responsibilities.

Especially once you need to hire employees, not only must you consider how to make the store operation profitable and how to turn customers into loyal clients, but also how to support, train, develop, and retain staff... These are not issues that can be solved by chance.

Being a boss is essentially a 24/7 job with no real breaks or true clocking off, requiring 24-hour availability. After all, it's your own business, and you can't help but worry about it.

Hope everyone can think clearly before starting entrepreneurship—why you want to do it, what responsibilities you'll need to bear, and what problems you'll need to face.

If readers of this article have relevant entrepreneurship/franchising experience, please share and supplement in the comments section~

Impulsive decisions are devilish; calm thinking is very important!

Images are unrelated to content, sourced from the internet.

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