Starbucks is one of the most recognizable brands in the world. Their green siren logo is one of the most famous logos globally. And you’ll see people line up not only for their coffees but for their cold frappuccinos too. It shows how successful Starbucks is. Then, you might wonder, how to start a Starbucks franchise? Read more about setting up a Starbucks store here.
But before that, let’s look at the company’s history and current standing.
Starbucks: An Overview
The story of Starbucks starts in 1971 in Pike Place, Seattle. Over the years, the coffeehouse has established a name in Seattle. It would eventually expand to other states like Illinois, California, and New York. Soon after, it became global when a Starbucks opened in Japan.
Anyone who has ever tried a Starbucks beverage is familiar with its coffees, such as Americano, Cappuccino, and Latte. Of course, there are the Frappuccinos too. But Starbucks also offers food, merchandise, and gift cards.
Currently, Starbucks has corporate-owned and licensed stores from across the globe. In 2020, Starbucks reported they have more than 32,000 stores worldwide. Some of their competitors are Gloria Jean’s and Tim Hortons.
Is it Possible to Start a Starbucks Franchise?
Starbucks is clear that they DON’T franchise. Howard Schultz, former Starbucks CEO, said they don’t franchise their stores. He said that they would lose their core values and culture, which made them prominent in the food and beverage industry. However, you can become their licensee and acquire a license. In turn, you’ll have a “licensed store.”
Other Starbucks Solutions
Franchise500 suggests that Starbucks has franchises in other countries, but licensing is the only way to own a store in North America. Not only that, since they own Seattle’s Best Coffee, which you can consider franchising. You may also choose a Foodservice or Premium Self-Serve to help you meet your business needs.
You can partner with the Nestle Coffee Partners Food Lab for the Foodservice option. Here, you can have Starbucks as your partner in business. The places where you can set up Foodservice are:
- College or university
- Healthcare
- Hotel and hospitality
- Business or workplace
- Community Living
They’ll give you equipment so your workplace can serve Starbucks.
In addition, a licensed store allows the licensee more freedom when it comes to the business, as compared to a franchise.
That said, how do you go about opening a licensed store, and what are the requirements?
How to Open a Licensed Store?
Anyone planning to open a licensed store should go to the Starbucks website and apply. After that, you have to fill out a Licensee form. It asks you details about the potential licensee, like their personal information and business history. It also requests that you fill out the financial statement section. Plus, you have to answer interview questions on paper. Some questions include:
- Things you did in your previous business
- How you might run a Starbucks store
- Involvement in the community
That said, you might need experience in business before opening a licensed store.
How much is a license fee? Several sources report that a license fee is $315,000. Of course, there are other expenses to consider. In addition, you need to have liquid assets amounting to $500,000 or even higher.
How can Starbucks help you with your licensed store? Franchise.com reveals the following:
- Equipment
- Store design
- Training
- Menu
- Food
- Promotions
- On-site visits
Final Thoughts
Although Starbucks does not offer franchising options, they have maintained success through their licensing model. This way, they could keep their brand consistent across the globe while giving the licensee freedom to run their store. That said, it’s expected that an experienced entrepreneur or business owner can become a licensee and help with the expansion of Starbucks globally.
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