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How to start a Starbucks Franchise in USA

How to start a Starbucks Franchise in USA




If you have ever considered owning a Starbucks franchise, you might have imagined opening your own franchise location. On the other hand, Starbucks owns its own coffee outlets. You will be given permission to open a licensed store if you meet the necessary requirements. According to the record, 40 percent of the Starbucks locations in the United States of America are operating under a license. Starbucks retains significant control over these outlets. The fact is Starbucks isn’t a franchise.

 

Starbucks Franchise: Detailed overview!

 

Founding year 1971
Number of outlets 23,000
Revenue worldwide$24.72 bn
Outlets in the USA14,606
No. of countries 100+ 

It began in 1971 as a coffee bean vendor and has since expanded to become the world’s largest global network of coffee shops, selling drip-brewed coffee, bottled beverages, pastries, tea, espresso coffee, cupcakes, and sandwiches.

 

The first store was launched in the Pike Place Market in Seattle, Washington, in the year 1971 by Zev Siegel, Gordon Bowker, and Jerry Baldwin for selling A-grade coffee beans and equipment. In their first year of operation, they bought green-coloured coffee beans through Peet’s before moving on to direct purchases from coffee growers.

 

Entrepreneur Howard Schultz, popularly known as Starbucks’ creator, joined the firm in 1982 when it was merely selling coffee beans. 

 

That same year, Starbucks established its first stores outside of Seattle, Vancouver, Canada at the Waterfront Station, British Columbia and Chicago, USA. It had already expanded to 165 locations at the time of its IPO or initial public offering in the stock market in the year 1992.

 

It now has more than 23 000 outlets across the globe, both licensed and owned. This popular coffee shop also provides its customers with the Starbucks App, which allows them to make speedier payments and get back loyalty points through the Starbucks rewards programme.

 

Does Starbucks offer franchises in the USA?

 



It does not offer franchises in the USA. In addition to further shop expansion, the well-known coffee brand has expanded its digital presence through its reward program, which is available on mobile and internet platforms. Starbucks’ growth strategy has always been to increase the number of locations in a market, including creating particularly large reserve outlets in congested areas.

 

The company has also maintained its retail expansion by focusing on an enlarged portfolio of offerings aimed at various coffee purchasers. On the other hand, Starbucks has distanced itself from its competitors by avoiding franchising. Unlike corporations like McDonald’s or other prominent coffee brands like Dunkin’ Donuts, Starbucks Coffee Company has grown without franchising its brand.

 

How to open a Starbucks franchise/licensed outlet in the USA:

 

Starbucks, as previously stated, has over 23,324 outlets in over 100 countries worldwide, with revenue of US $24.72 billion in the previous fiscal year. Starbucks does not provide franchises, instead licensed outlets, which simply means that you are not the owner of the outlet like in a franchise model but instead they have to pay a licensing fee to rent Starbucks name as a brand.

 

As per the corporation, licensing outlets permits them to have more control and power over the outlets and to further improve the quality of products.

 

You must first register with Starbucks’ Branded Solutions website to begin the licensing application process. After registering on the website, you can begin with the application process. You will be asked to identify the sort of business you operate, enter general business information such as your name and location, and provide contact information during this process. 

 

You will also need to describe what kinds of things you’ll sell. During the application procedure, you will also need to justify what makes you an excellent licensed business owner. Then, in the comments section, you can defend your case and explain why your store would be competitive in the bigger market. Starbucks will check the information provided by you and then contact you once they make a decision. 

 

Application process

 

How to apply for a Starbucks franchise: 

The specifics of acquiring a Starbucks franchise opportunities licence are numerous, but the fundamental concept of how to apply is straightforward. The steps are as follows:

 

  • Visit the Starbucks website and fill in the application form

           https://bit.ly/3jwVpYH

 

  • Fill out a formal application.

 

  • Please specify your chosen business location.

 

  • Provide the organization with your present cash status, along with the assets and liabilities.

 

  • Include information about why your planned area is suitable to open a licensed Starbucks store.

 

  • Submit the application and wait for their response.

 

Requirements

 



 

Financial requirements for a licensed outlet:

If you are chosen to become a licensed store owner, you will receive assistance with many elements of your business operations, such as store design, employee training, and equipment installation. However, to make the firm a success, you will require money.

 

Starbucks franchise cost

Starbucks anticipates that licensed outlets will have a specific level of funding accessible, with some suggesting that at least Starbucks franchise cost would be approx. $700,000 in liquid assets will be required. You can start your own Starbucks-licensed business if you have a fantastic location and appropriate assets.

 

Starbucks franchise license

Starbucks franchise requirements to assist licensees in running a successful business in exchange for a start-up fee and ongoing expenses. After all, the company doesn’t give franchises in the first place: it wants complete control over how the business appears, ensuring a consistent experience for clients worldwide. If you obtain a Starbucks license, you can expect the corporation to assist you with some or all of the following:

 

  • On-Site Visits
  • Store layout
  • Equipment
  • The Starbucks menu
  • Promotions
  • Training and Support
  • Food

 

The idea behind the licensing process in the USA

 

Starbucks CEO Howard Schulz came up with the idea of licensing rather than franchising its locations. The progressive and popular entrepreneur has long maintained that the firm itself best controlled the complexity of producing an excellent Starbucks experience for customers, from product description to store display and operation. As a result, franchisees do not form part of the company’s business plan.

 

However, the philosophy does not stop there. The corporation exploits its licensing strategy by retaining specific requirements to increase corporate sales. In particular, it does not just grant permits to everybody who applies. Rather, the corporation only accepts licensees that already have successful businesses in prime locations that Starbucks can leverage. For example, the corporation actively attempts to add licensed Starbucks outlets to existing sectors such as: 

 

  • Business
  • University 
  • upscale eating 
  • A government or military installation 
  • Healthcare 
  • Lodging and hotels 
  • Recreation and travel

 

Conclusion

 

While Starbucks does not provide franchises in the United States or any other portion of North America, it does have a limited number of franchise stores abroad, primarily in the United Kingdom. If you live overseas and are a successful business owner, you may be eligible for a Starbucks franchise. Qualification requirements, on the other hand, are stringent. In addition to being an owner or high-level management in the food and beverage industry, you must have at least £500,000 or about $630,636 in liquid assets, a stable financial status, and be willing to open multiple stores in a short period of time.

 



The company does not follow the usual franchising concept. You can apply for a Starbucks Coffee Shop through their website, as any individual can start a Starbucks Coffee Shop on their own. To open a licensed store, they must first get permission from the company.

Instead of a franchise fee, you must pay a licensing charge. The licence fee for a licenced Starbucks is approximately $315,000.



According to a US National Survey, the average Starbucks generates $ 540,000.00 in sales per year.

Starbucks, a retailer that primarily sells coffee-related beverages, follows the company-owned, chain business model.



$80,000 is the profit money generated by the Starbucks owner. 

The business doesn’t follow a conventional franchise business model. Since no one may build a Starbucks Coffee Shop on their own, you can submit an application through their website. You need to first get permission from the company in order to create a licenced store in India.