With around 64% of U.S. consumers drinking coffee daily (NCA Trends 2018), it is no wonder that individuals (especially coffee lovers) interested in investing in a franchise would be naturally attracted towards the possibility of buying a coffee franchise.
Even though there’s a good probability of success when it comes to a coffee business in the U.S., it is crucial that you get acquainted with the merits and demerits of all the options available, so that you can go on to make a conscious choice.
So for people who are interested in buying a coffee franchise - let’s have an in-detail look at all the different options, simultaneously comparing them to zero in on the main reasons why investing in a coffeehouse franchise is the best option for potential investors.
The typical coffee shops are those that usually sell food items and drip coffee along with the option for decaf.
Most typical coffee shops welcome the ability of guests to stay for a prolonged period of time.
These shops may also have an espresso machine but espresso beverages are not something that they focus on. The focus is only on the food items on the menu and the coffee offered.
The above-mentioned aspect can prove to be a big disadvantage as the popularity of specialty coffee and espresso drinks is at an all-time high in the U.S. and is only going to increase in the near future.
Moving on... when it comes to setting up a coffee shop, you will be required to lease a retail space of some type while massively considering the location (a visible place with a good amount of daily foot traffic will be required).
Along with that, it will be necessary for you to hire employees for becoming baristas for your business.
Keeping all the above things in mind, investing in a typical coffee shop may cost more than many of the other coffee franchise types discussed below and will not give you the best odds for success due to the absence of specialty coffee and espresso drinks from the menu.
Cafes are essentially the hybrids of the coffee shop and coffeehouse concepts.
They usually offer lunch and dinner menus along with coffee, espresso drinks, and teas.
The menus are simplistic and there is a good balance between the coffee drinks and food items offered.
Cafes give special importance to good quality coffee and food while affording a welcoming atmosphere to its guests.
Cafes are closer to being a full-service restaurant and hence may be required to be licensed as such.
Cafes have almost all of the merits of a coffeehouse but considering the fact that you’ll have to do a full restaurant startup. A cafe is undoubtedly the most expensive coffee concept and is certain to necessitate a huge amount of investment at the start.
Next up are coffee bars, which are totally different from coffee shops, coffeehouses, and cafes.
Coffee bars are more upscale and their main emphasis is on providing artisan coffee and espresso to its guests.
These bars usually also offer bakery products like cookies, muffins, and cakes along with the coffee drinks.
They offer very limited seating if any, as they expect their customers to stand at the bar, have their drink and leave.
Taking into consideration the lack of seating and convenience on offer, for coffee bars to succeed, setting them up in high traffic locations such as malls, train stations, bus stations, etc. is an absolute must.
This means an exceedingly high lease cost, to begin with, followed by the immense pressure of balancing the books.
Mobile coffee businesses like coffee vans, trucks and carts usually involve lower startup costs as compared to other coffee concepts while also offering flexibility to the owners.
The focus of these coffee businesses is generally on brewed coffee and pre-made bakery items like pastries, etc and they are usually seen at prime locations such as bus stations, train stations, etc. or at events like festivals and fairs.
Even though you won’t have to worry about leasing a space or hiring employees, there are a number of cons in relation to operating a mobile coffee franchise.
To begin with, you may have to face intense competition at prime locations from other mobile coffee and food franchises, the popular local coffee franchise in the area and also from your fellow franchisees due to the lack of territorial rights.
Besides becoming skilled in the art of creating coffee, you will be also required to ascertain how to provide something new and superior as compared to your competing mobile coffee and food franchises. Another demerit is the absence of any seating for customers.
The next coffee concept is that of retail coffee shops.
Rather than serving ready-to-drink coffee to customers, retail coffee shops afford people with all they need to make their own cup of coffee at home.
The focus of retail coffee shops is usually on selling coffee beans and coffee equipment such as mugs, specialty coffee items, French presses, etc. to customers.
In today’s world, convenience has become king for people - with the section of people brewing their own coffee at home steadily decreasing and the number of individuals treating themselves to a quality cup of coffee at specialty coffee shops exceedingly increasing.
Thus in the current scenario, there isn't great scope for a good amount of daily sales with a retail coffee shop.
Simply put, the probability of getting substantial profits from a retail coffee shop is very low.
Roasters usually roast green coffee beans on site and sell the beans to customers.
Again, there are a decent amount of perks with regards to becoming a roaster but sure to say, this coffee business is never going to provide you with the kind of profit that you can make with a coffeehouse/coffee shop.
So rather than investing in your money in this, it is well-advised to scrutinize other coffee concepts and invest in one of them.
Drive-thru coffee shops have the potential to do a good amount of business at the right locations - ideally on a busy commuter road with a high amount of going-to-work traffic.
The coffee franchise cost is comparatively low and it is a cheaper alternative to many other coffee concepts.
For drive-thrus to succeed, the biggest requirement will be training people to become skilled baristas with a great speed-of-service.
The major demerit of investing in a drive-thru is the fact that the majority of coffee lovers prefer to enjoy their favorite coffee beverage while relaxing on a sofa or chair without having to worry about anything else - let alone drive a car.
So despite all the merits in favor of a drive thru coffee franchise, it is never going to outmuscle the convenience afforded by other coffee concepts like coffeehouse, coffee shop, etc. and won't likely go on to generate the same amounts of profits as these concepts.
The coffee concept that first comes to most people’s mind when thinking of starting their own coffee business is a coffeehouse.
It’s that kind of place that has become popular due to the American sitcom ‘Friends’, wherein the lead cast used to relax on cozy sofas and armchairs while socializing and enjoying their coffee.
The main aspect of a coffeehouse is the inviting atmosphere with sofas, armchairs and other seating areas.
Essentially, coffeehouses are welcoming places where you can socialize with friends, get your work done, have a date, read, etc. while indulging in your beloved cup of coffee.
As far as the menu of a coffeehouse is concerned, it generally consists of specialty coffee, espresso drinks, teas, cocoa drinks, assorted bakery items, sandwiches, salads, etc.
When we talk of coffee, it is more than just a beverage that people look for when they are feeling hungry or thirsty.
There can be a number of reasons why people drink coffee - it can be anything from getting their daily caffeine fix, just relaxing, reducing stress, catching up with friends, etc.
In such a scenario, it is quite evident that the coffeehouse concept is best suited for meeting the needs of coffee lovers and is sure to attract the majority of traffic.
In addition to that, coffeehouses aren’t the most expensive as compared to other coffee concepts and possess the ability to succeed even in moderate-traffic locations.
There is a comprehensive coffee franchise list when it comes to coffeehouse franchises but all you need to do is invest in a premium, first-rate coffeehouse franchise that has a proven model, and then work hard to run it in an efficient manner, and you are more than likely to go on and achieve profitability and success with your coffee business!
The coffee business is still a growing industry and there is a good amount of room for interested individuals to invest in top-notch franchises and begin their quest to achieve success with their coffee business.
Add to that the fact that coffee is a commodity that is never going to go-out-of-fashion and comes with built-in traffic, and what you have is quite simply a winning proposition.
Having said that - when it comes to investing in a coffee franchise, the type of coffee business you choose will determine your coffee shop franchise price, risks, and probability for success.
Keeping that in mind, it's quite clear that the 'coffeehouse' concept is the most popular among Americans, has the most advantages and is sure to afford you with the best chance for success.