Coffee is one of the biggest markets on the planet. If you’re looking to be your own boss, then you’ve picked a fantastic franchise sector to explore. Because the coffee market is so huge, there is an ever increasing number of opportunities within it. In this article, we’ll explore 10 reasons to invest in a coffee shop franchise business in the UK.
1) Be Your Own Boss!
Franchising offers a means to be your own boss. No more employers, just the luxury of business ownership. As a coffee business owner, you’ll enjoy control over the local marketing of your franchise business and in some cases, how many hours you work. There are a lot of franchises out there that enable you to work on a part time basis, fitting your business around other commitments. One such good example is coffee van franchises, where you can book clients around your schedule.
Many franchisees love being their own boss because it gives them a sense of freedom. Having invested in a business you enjoy, franchising really does offer the luxury of business ownership.
2) A Considerably Diverse Sector
There are a considerable number of different opportunities within the coffee franchising sector. As you’d expect, the different types of coffee franchises all cater for various investment ranges. So if you’re looking to run your own coffee franchise on a budget, you won’t have to look too far.
Some of the top types of coffee franchises include:
Storefront Coffee Shop Franchises
The most recognised type of franchise is a storefront retail premises. For example your average Costa Coffee or Triple Two Coffee. You’ll usually need a premises for this type of franchise, meaning costs will be higher, but you reap the rewards of having a prominent place on the high-street. Franchisors will help with everything from store fitout to site selection, ongoing product and administrative support through to your initial launch.
Mobile Coffee Franchises
Earning a well-deserved place in the franchising sector, mobile coffee franchises are becoming more and more popular. Typically operating out of a converted van, franchisees enjoy considerable flexibility when it comes to their working patterns. Setting up at local parks or train stations, events or party-hire, bringing the coffee to the people is becoming just as popular as the high street counterpart. Big name brands include Coffee Blue and Coffee Bike.
Mobile Coffee franchises are usually considerably cheaper than storefront retail. Many franchisors can also help with vehicle finance and with support from banks and lenders, running your own coffee business could be more affordable than you think.
Head to your local shopping mall and it should come as no surprise that somewhere, be it inside or out, there will be a kiosk setup selling hot drinks. A mix between a shop and a coffee stand, these kiosks offer a cheaper alternative to retail stores, whilst benefitting from high footfall of a busy area. Franchisors will usually help with site selection, so you get the best exposure.
3) A Booming Marketplace
The value of consumer spend on hot drink beverages such as coffee and tea, in the UK, is a whopping £2.89bn. Be a part of this lucrative sector with a coffee shop franchise.
The value of the UK branded coffee shop market is a staggering £4.4bn, whilst the consumer spend in the UK solely within these coffee shops is at over £92m.
With the number of coffee shops on the rise, and thanks to the flexibility of the coffee market, demand is set to continue.
4) Fully Supported By The Franchisor
From onboarding as a franchisee to learning about business management and finance administration, the franchisor will provide you with comprehensive training and support. As part of your franchise investment, you’ll enter one of the busiest markets in the world with your best foot forward. For many, having a safety net that is the franchisor, is one of the biggest reasons for choosing franchising.
When you make your initial enquiry, the franchisor will send you a prospectus so you can learn more about the business. You’ll also be able to book onto a discovery day. Either run as a group or 1-2-1, discovery days are often informal opportunities to learn more about the business. There’s no commitment, but you might be expected to sign an NDA. This is so attendees don’t go and copy the franchisor’s proven business.
When you’ve made the decision to become a franchisee in the coffee sector, you’ll benefit from training such as:
- Barista training
- Business management and ownership
- Employing staff (if applicable)
- Day to day operation and finding clients (where applicable)
- Local marketing and brand guidelines as part of the operations manual
- Product and health/safety training
Absolutely everything is taught to you so your franchisor and you both feel confident in bringing out the best in the franchisor’s brand. It’s only to be expected, because your success will have a positive impact on the brand’s reputation and image.
5) The Earning Potential is Unlimited
The scalable nature of franchise businesses makes the earning potential considerably attractive. Whether you’re owning a retail franchise or a van based coffee shop, the more work you put in, the more you’ll get out. And if you want to purchase neighbouring territories, or take on staff and operate as a multi-van, multi-staff operation – well, that’s your choice. Once you’ve found your feet and are trading successfully, if neighbouring territories are still available, franchisors are often happy to let you run them either in addition to your business or as a separate franchise. Obviously speak to the franchisor to learn more as flexibility will vary by franchise. If you’re running a van based coffee business, the only real limitation is the boundaries of your franchise. If you want to work extra hours, it’s up to you. The more you put in, the more you’ll get out.
6) Financial Support is Available
If you’re looking to buy a coffee shop for sale in the UK, you can either buy an existing business or set up as a franchisee. Both of these are favoured by banks over starting up a business from scratch. With franchising, it isn’t unheard of that many banks will offer funding up to 70% of the franchise investment. Many banks are establishing franchising departments to specifically help with people looking to get in to franchising. Natwest, Barclays and HSBC are all well known within the franchising sector. There are numerous businesses out there as well which deal specifically with franchise finance.
7) Increased Purchasing Power
As a coffee shop franchise network grows, so does its reputation and purchasing power. One of the biggest reasons to invest in a coffee shop franchise is the ability to buy products and services at a competitive rate. Franchisors will have agreements in place with (as we said earlier) vehicle lenders, coffee product suppliers and marketing. Because the franchisor will encourage (or ensure) franchisees use the same supplier, in exchange, the supplier will often provide their products and services to franchisees at a better rate. This repeat business is good for the supplier because it keeps them in business, and the better price for the franchisees helps them stand out from their competitors.
8) Everything You Need is Provided
The franchise fee you pay when buying a franchise doesn’t cover just the license / branding. It covers everything you need to set up the initial business. That includes your training and support, store fit-out or van conversion, it will usually include your starting stock of coffee and consumables too. In the early days you’ll certainly need working capital to purchase extra stock, but for the franchise investment, you get a business in a box. You’ll be up and running within a few weeks.
9) You’ll be Joining a Recognised Brand
Take Costa Coffee for example. At one point, they would have started with just one store. Today, Costa Coffee is one of the biggest coffee franchises (if not the biggest) in the world. Being a part of a recognised brand is one of the top reasons to invest in a coffee shop franchise. Thanks to the nature of franchising, as a franchise network grows, so does its brand and its impression on the public. When you join a franchise, you’re utilising the positive reputation that the entire franchise network is establishing, and as the network grows, so does its demand.
10) An Asset You Can Later Sell
As with all businesses, once the owner has built up the brand and made it successful, retiring or selling on the business can enable the owner to get back their investment, plus more thanks to the reputation they’ve built up. Selling a business will usually fetch more than the initial investment because hard work and effort has gone in to making the business what is is now – a turnkey package for anyone looking to buy an already-trading business. Offering the coffee franchise as a resale means anyone with past business ownership experience can dive head first into the market and take the reins, Franchise resales are often popular thanks to their established presence in the market and of course their existing customer/client base.
Interested in getting into franchising? Join one of the biggest sectors in the world – coffee!