Does Starbucks Franchise?
Starbucks Franchise: Entrepreneur readers often reach out about how to franchise a Starbucks or learn more about owning one of the coffee shops. Unfortunately, if you live in the U.S. or Canada, owning a Starbucks franchise probably just isn’t in the cards for you. Like Chick-fil-A, the Seattle-based coffee chain prefers to own each of its own locations.
Starbucks CEO Howard Schultz told Entrepreneur in 2003, “We believed very early on that people’s interaction with the Starbucks experience was going to determine the success of the brand. The culture and values of how we related to our customers, which is reflected in how the company relates to our [employees], would determine our success. And we thought the best way to have those kinds of universal values was to build around company-owned stores and then to provide stock options to every employee, to give them a financial and psychological stake in the company.”
Is Starbucks A Franchise
Starbucks does not franchise. It is also worth mentioning that the company is not interested in franchising in the future. The coffee shop prefers to own each of its locations and prefers their customers to have the full Starbucks experience. How the company interacts with the customer is one of the main reasons why it has had so much success.
More so, Starbucks doesn’t want to erode the values the company holds dear. Although franchising is not possible in the US and Canada, there are franchises in Europe. And, the good news is there are other strategies for ownership. Becoming a Licensed Partner is one of them. Licensed locations are found in large venues such as airports, hotels, hospitals and colleges.
So, if you are looking to work with the Starbucks brand, you have the option of opening a licensed store. Starbucks aims at reaching different demographics. If you have a location or business that can help the coffee house achieve this goal, then you will be received with open arms. Currently, 13,930 Starbucks locations exist in the US, and 41% of them are licensed shops. Once you are licensed, the following is provided: training, design, menu, promotions, equipment, and other continuous support.
As mentioned earlier, the predominant reason is to maintain the company culture. The success of the coffeehouse is based primarily on their ability to tend to the sensitivity of their customers. Customers identify with the values of the corporation, and the company is not ready to let go of that.
The company indeed has several international franchises and licensed stores. However, it still maintains the most significant share of ownership. Starbucks is focused on its values and mission as opposed to trading control for expansion.
Starbucks Franchise Cost
For many small businesspeople, buying a franchise can be a very lucrative path to small business ownership, with some key benefits not found when starting a business from scratch. When you buy a franchise, you are buying into an established brand with a track record for success; you get to manage the day-to-day tasks of running the business, while the heavy lifting of setting up operational procedures, researching and launching new menu offerings, managing huge advertising expenses and budgets, and even the real estate and construction management are all handled by the encouraging “big brother” in your new business.
If you’ve spent any time recently in a mall, at an airport, on a college campus, or practically anyplace else on planet Earth, you’ve probably sipped a $6 Triple Venti Half-Sweet Soy Caramel Macchiato from Starbucks and wondered about how you can get involved in this high-margin business. Starbucks’ business and brand continues to be incredibly strong and a proven earner, as the company plans expansion by more than 12,000 stores worldwide by 2021.
Unfortunately, if you live in the United States or Canada, the answer is pretty simple: You probably can’t. Like Chick-fil-A, In-N-Out, Panda Express, and Chipotle, the Seattle-based coffee chain does not operate its stores on a franchise model. In a 2003 interview in Entrepreneur with Starbucks then-CEO Howard Schultz, the coffee giant explained why:
“We believed very early on that people’s interaction with the Starbucks experience was going to determine the success of the brand. The culture and values of how we related to our customers, which is reflected in how the company relates to our [employees], would determine our success. And we thought the best way to have those kinds of universal values was to build around company-owned stores and then to provide stock options to every employee, to give them a financial and psychological stake in the company.”
Schultz continued, “I always viewed franchising as a way to get access to capital, because you’re using other people’s money to grow, essentially. And we were dealing with a premium product — something that can be hard to learn, that you have to explain to the customer, that requires an educated staff. It would have been hard to provide the level of sensitivity to customers and knowledge of the product needed to create those Starbucks values if we franchised. You can be just as entrepreneurial and experimental in a company-owned model.”
How Much Is A Starbucks Franchise
Whole world loves the iconic Starbucks coffee and there are also local and national brands that compete with Starbucks in the U.S. as well as across the world. Starbucks not only serves regular coffee such as espresso and latte but also specialty coffee.
It is impossible to buy a Starbucks franchise in United States because the company does not offer franchises. However, you can apply to buy a Starbucks licensed store and the average cost of one Starbucks store is US $315,000.
Also, why Starbucks does not offer franchise is because Howard Schultz, the CEO of Starbucks has long resisted the franchising business model to maintain control over the Starbucks brand, quality of beverages and culture. Therefore there’s no hope for getting a Starbucks franchise.
The first outlet was opened in Seattle, Washington in Pike Place Market in the year 1971 by three partners, Jerry Baldwin, Zev Siegel, and Gordon Bowker, selling high-quality coffee beans and coffee equipment. . During their first year of operation, they purchased green coffee beans from Peet’s, then began buying directly from coffee growers.
Entrepreneur Howard Schultz who’s now known as the founder of Starbucks, joined the company in 1982 and that time company was still selling coffee beans.
Schultz suggested the owners that the company should also sell espresso drinks and drip-brew coffee along with beans but owners rejected his idea, believing that getting into the beverage business would distract the company from its focus.
But believing in his own idea of selling espresso drinks, to on-the-go Americans, Schultz started the Il Giornale coffee bar chain in 1985.
In 1987 the original founders of Starbucks sold the brand to Schultz’s Il Giornale, which was then re-branded as Starbucks and quickly began to expand.
Starbucks opened its first locations outside Seattle in Vancouver, British Columbia, Canada (at Waterfront Station) and Chicago, Illinois, United States that same year. At the time of its IPO (initial public offering) on the stock market in 1992, it had already grown to 165 outlets.
Today, it has more than 23 000 outlets worldwide – both owned and licensed. This iconic coffee chain also offer its customers Starbucks App for making faster payments and redeem loyalty points through Starbucks rewards.
Starbucks Franchise Opportunity
If you have ever thought about owning a Starbucks, you might have thought you would be opening your own franchise store. But Starbucks owns and operates its own stores. However, you may be able to open a licensed store. It is estimated that 40 percent of Starbucks stores in the United States are licensed. Because they are not a franchise, Starbucks still exerts a good deal of control over these stores.