PHOENIX, Arizona – Consumer-Guardian.org announces the release of the report “Starbucks Franchise.” Find out how you can license a Starbucks and the best franchise opportunities as an alternative to Starbucks. Learn how to license a Starbucks store + the 2 closest Starbucks franchise alternatives. One of the most sought after franchises for new franchisees is Starbucks. Unfortunately, for those who live in the United States or Canada, owning a Starbucks franchise is not a possibility.
Similar to other quick-service restaurants, such as Chipotle or Chick-Fil-A, Starbucks prefers to keep each of its locations under corporate ownership.
Howard Schultz, the Starbucks CEO, talked more in-depth with Entrepreneur back in 2003 about why the company does not prefer to franchise its locations, keeping them company-owned instead.
Unless entrepreneurs want to open Starbucks franchises in a foreign country where the coffee franchise is a bit more widespread, a different strategy must come into play.
Here are a few alternative options for opening up a Starbucks franchise where entrepreneurs may be able to find the same success and growth.
Licensing a Starbucks Store
While Starbucks does not offer options for franchising, the company does offer the ability to open a licensed store. For those who already own a particular location or business, Starbucks can help them open up a new Starbucks in that location.
Licensed Starbucks stores are very common. In fact, as of late 2017, there were almost 14,000 Starbucks locations in the U.S. 41% of those stores were licensed store locations.
The Starbucks company helps companies and entrepreneurs license stores and deal with many aspects of the coffee store business, including menu, food, coffee beans, onsite visits, promotions, equipment, training, and support.
Of course, for everyone, this isn’t necessarily the most affordable or accessible alternative. For starters, one must have a location that Starbucks would deem fit to run one of its stores within. Plus, having the resources for that Starbucks would be a necessity too.
For those interested in opening a Starbucks as their first major business, having a Starbucks licensed store might not necessarily be the best choice, especially if the lack of pre-exisiting real estate exists.
Of course, beyond having a licensed Starbucks store, there are plenty of other high-quality coffee chain businesses that one could open a franchise through. In fact, two of these coffee chain businesses are in the Entrepreneur Franchise 500.
The 2 Closest Alternatives
Below are the best franchises to own as alternatives when taking into consideration success rate, profitability and product similarity to Starbucks.
Dunkin’ Donuts
The argument as to which of these two coffee shop chains has the best coffee is one that may exist among Americans forever. However, when it comes to whether Starbucks or Dunkin Donuts has the best franchise, the prize goes to Dunkin’, considering the fact that it is the only one that is truly a franchise.
In many ways, Dunkin’ Donuts is the complete antithesis of the Starbucks brand in that it is solely a franchise coffee business. When 2018 rolled around, the Dunkin’ Donuts landscape completely changed, as no corporate-owned Starbucks locations existed.
Dunkin’ Donuts has been in the top 10 of the Franchise 500 for many years. In the United States alone, there are more than 9,000 locations. Since 1955, the company has been franchising to entrepreneurs, though each year, the company continues to grow and spread.
Having that sort of franchising success does not come without its costs, though. Those looking to own a Dunkin’ Donuts must pay a $40,000 to $90,000 initial fee. For military veterans, the costs are decreased by 20%.
People must also have a net worth of at least $250,000, $125,000 of which must be in liquid cash. Dunkin’ Donuts owners typically end up paying anywhere between $230,000 and $1.7 million depending on the size and location.
While it may seem a bit costly right off the bat, the store ownership that comes with the cost justifies it. There is a major map of locations that can be found through the Dunkin’ Donuts website to give prospective owners a chance to see if the company is trying to expand into a particular area.
7-Eleven
Many coffee snobs and long-time coffee shop customers might turn their noses up at comparing a coffee shop like Starbucks to a convenience store like 7-Eleven. Of course, the Starbucks experience is a far different one from the 7-Eleven experience.
However, people love 7-Eleven coffee and the business itself is just as serious as Starbucks. In fact, it finished at number 1 on the Entrepreneur Franchise 500 in 2017 and number 2 in 2018.
7-Eleven is well-known across the country, combining success and expansion with longevity. There are more than 62,000 7-Eleven locations around the world today and more opening up all the time.
Combine the number of Starbucks and Dunkin’ Donuts locations around the world and 7-Eleven still takes the lead.
The Starbucks corporation looks for business owners or entrepreneurs that can provide them with hot, new locations to open up Starbucks licensed stores. 7-Eleven is quite different from Starbucks in that its business model seeks out business owners and provides them with new locations.
There is a handy map on the 7-Eleven website where prospective business owners can get a look at places they might want to build a franchise. Unlike the Dunkin’ Donuts map, however, the 7-Eleven map shows people pre-existing locations that they can purchase.
There is no need to worry about startup fees or construction costs when purchasing a pre-existing location.
This unique business model explains the wide range of potential costs for opening up a franchised 7-Eleven. The overall cost can range anywhere from about $40,000 to $1.2 million.
The amount truly depends on the location in which the convenience store is opened up. Those opening up a store in Los Angeles would pay a lot more than those opening up a store in Montana, for example. Researching the money one might need based on different states is a necessity.
The majority of that cost goes into something they refer to as the “franchise fee.” The franchise fee ranges from around $10,000 to $1 million. Veterans, similar to Dunkin’ Donuts, can get up to 20% off that cost and have access to special financing. As for net worth requirements, prospective 7-Eleven franchise owners must have a net worth of anywhere from $100,000 to $250,000 depending on the location.
Becoming a Franchisee
As of right now, it is still not possible to buy a Starbucks franchise. However, not being able to buy a Starbucks franchise does not mean that the world of franchising should feel out of reach.
For starters, Starbucks coffee licensed stores could be a great alternative for those looking to open a Starbucks in a pre-existing location.
There are plenty of other alternative Starbucks coffee options for those who want to open franchise that deals with coffee, including Dunkin’ Donuts, 7-Eleven, Tim Hortons, Coffee Bean & Tea Leaf, and many more, each of which have excellent brand recognition and potential for growth. It is well worth considering some research into these popular coffee shop chains to find out more about what it takes to own one and the experience of people who currently have franchises under their belt.
