Caribou Coffee Franchise Owner Salary, Profit & Failure Rate 2024

Caribou Coffee is an extremely popular coffee shop chain not just in the United States but in the world. You might want to get on the train and take a chunk of this big pie via franchising. That might really be a good decision because Caribou Coffee is an active franchisor.

Caribou Coffee Franchise

But is it really worth owning a Caribou Coffee franchise? In this article, we will answer your questions and doubts. We will discuss Caribou Coffee, its franchise system, expected costs and profits, and every other detail.


About Caribou Coffee And Caribou Coffee History

Caribou Coffee is an American coffeehouse franchise chain specializing in coffee with no artificial colors, sweeteners, flavors, or any other preservatives. They are the first major American coffeehouse to serve 100% Rainforest Alliance Certified coffee beans. The company was founded in 1992 and started to franchise in 2004.

Caribou Coffee now has over 765 locations worldwide, with a presence in several continents and tens of countries. They are known to provide innovation and quality not just to their customers but also to their franchisees with their extensive program. They also offer more than one type of franchise, which makes it easier for franchisees to choose the most beneficial option.


Franchise Model Table

Cost Or FeesAmount
Initial Investment      $268,100-$1.2 million
FranchiseYES
Franchising Since2004
Franchise-Fee$15,000-$35,000
Royalty-Fee4-6%
Liquidity$3 million
Estimated Outlets765+

How Much Does It Cost To Open A Caribou Coffee Franchise?

The average cost to open a Caribou Coffee depends on what type of outlet you’d like to open. There is a chalet, cabin, and kiosk option. All three of these options come in different sizes and requirements in terms of location, so it affects the price highly.

On average, the cost is between $268,100 and $1.2 million. This is the average of three of these location types, and it comes from the average of what other franchisees have spent on their locations.


Franchise Requirements

There are requirements to apply and to be a Caribou Coffee franchisee. You need to comply with certain requirements. You need to be an experienced manager and multi-unit operator. The minimum location requirement is 10 locations.

For experience, you need to have experience in the food and beverage industry or simply franchise experience.

The financial requirement is $3 million in cash or liquid assets. You need to possess either of those.


Caribou Coffee Profit & Revenue

For the fiscal year ending in December 2022, the company had a net revenue of $969 million. This includes all kinds of store sales, royalty, and advertising revenue. Operating income was $77 million, and the net profit for the brand was $50 million.


How Much Does A Caribou Coffee Franchise Owner Earns?

The profit and revenue of Caribou Coffee franchise owner can vary depending on their outlet’s location, size, etc.

However, according to sources, Caribou Coffee franchise owners make $633,227 in yearly sales on average.

And as per an estimated profit margin of 17.5%, they make $110,814 in profit each year on average.

This is how we calculated the net profit for the Caribou Coffee franchise:

Financial OverviewPercentage of RevenueAmount ($)
Individual Franchise Annual Revenue100%633227.00
Rent10.31%(65301.53)
Insurance5.16%(32650.77)
Salaries20.63%(130603.07)
Franchise Royalty Fees5.16%(32650.77)
Utilities2.06%(13060.31)
Cost of Goods Sold (COGS)25.78%(163253.84)
Labor (Variable)13.41%(84891.99)
Total (Expenses)82.50%(522412.27)
Net Profit17.50%110814.72

Note: The displayed expenses are estimates based on industry averages and standard costs. Actual expenses may vary due to factors like location, business size, and market conditions. We recommend conducting detailed research or consulting with a financial advisor for a tailored financial analysis.


Caribou Coffee Failure Rate

System-Wide Summary From 2020 To 2022

Franchised Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
2020130132+2
2021132139+7
2022139145+6

For the Franchised outlets:

  • In 2020, the growth rate was (2)/130×100≈1.53%
  • In 2021, the growth rate was (7)/132×100≈5.30%
  • In 2022, the growth rate was (6)/139×100≈4.31%

Company-Owned Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
2020317316-1
2021316321+5
2022321339+18

For the Company-Owned outlets:

  • In 2020, the failure rate was (1)/317×100≈0.32%
  • In 2021, the growth rate was (5)/316×100≈1.58%
  • In 2022, the growth rate was (18)/321×100≈5.60%

Total Outlets:

YearOutlets at the Start of the YearOutlets at the End of the YearNet Change
2020448446-2
2021446460+12
2022460484+24

For Total outlets:

  • In 2020, the failure rate was (2)/448×100≈0.45%
  • In 2021, the growth rate was (12)/446×100≈2.69%
  • In 2022, the growth rate was (24)/460×100≈5.21%

According to the above-mentioned data, there is no failure rate for franchised outlets as the outlets at the end of the year increased during the span of 3 years.

We can see that the franchised outlets for Caribou Coffee grew from 2020 to 2022, showing a growth rate between 1.53% and 4.31%.

On the other hand, for company-owned outlets, the growth rate of Caribou Coffee was lying in the range between 1.58% and 5.60% for 2021-2022. The company also experienced a decline in 2020, showing a failure rate of 0.32%.

Overall, when we combine the data of franchise and company-owned outlets, we can see that the Caribou Coffee franchise has expanded in the years 2021-2022, showing a total growth rate between 2.69% and 5.21%. In the year 2020, the number of outlets declined, showing a failure rate of 0.45%.


Payback Period Of Caribou Coffee

The midpoint investment of Caribou Coffee is $589,200, and the yearly profit is $110,814. So, to find out how long it will take to earn back the initial investment:

Payback Period = Midpoint Investment / Yearly Profit = $589,200 / $110,814= 5.3 years

Based on these figures, it will take approximately 5-6 years to pay back the initial investment for the Caribou Coffee franchise. This time period could be longer or shorter depending on your sales, revenue, and profit figures.


Overall Sales

The sales also differ between the types of franchised outlets. The overall annual sales per store average is between $400,000 to $700,000. The highest earners are airport locations, with $1.3 million in average annual sales. The lowest is grocery franchises, with $264,729 in annual sales.


Training and Support Of Caribou Coffee

The initial training program, which is for general managers, is for six weeks. It takes place at a certified training center in Minnesota or another designated coffeehouse.

This program focuses on teaching the general manager or managers operations of the store and has steady growth.

As part of their support program, Caribou Coffee might ask the general managers or additional staff for extra seminars and training programs as they require.

They also help with regional marketing and management of the store by providing you with the necessary software, equipment, and other necessary things.


Terms of Agreement and Renewal

The initial term of the agreement is 10 years for chalet and cabin type and five years for kiosks. If the kiosk is located at an airport, then it will be for 10 years.

The renewal periods and requirements are the same for all types of franchises. It’s for two additional five-year terms. The renewal needs to be approved by the franchisor, and both sides need to agree to it.


Obligations and Restrictions

The franchisee is obligated to designate one person. This could be the franchisee themselves, who will train as a general manager for the franchised location.

This individual will complete the training and will be responsible for the daily operations of the store and oversee everything about the franchised location. This person must also be present in the store full-time.

The franchised location is obligated to sell all the goods and services that the franchisor approved. There might be price restrictions on certain products set by the franchisor.


Financial Assistance

Caribou Coffee does not offer direct or indirect financial assistance. They do not guarantee any kind of financial obligation, lease, or note. The franchisee is responsible for finding every financial need by themselves.


Caribou Coffee Comparison

NameFranchise FeeRoyalty FeeInitial Investment
Gloria Jean’s Coffee$7,500-$15,0006%$178,700-$496,000
Dunkin’ Donuts$65,0005.9%$210,900-$1.8 million
Caribou Coffee$15,000-$35,0004-6%$268,100-$1.2 million

Conclusion

There is no doubt that Caribou Coffee is a profitable business with high brand awareness guaranteed to bring in customers. From what we can see in their franchising system, it also proves that it is a good investment thanks to their extensive training and support and the potential revenue per store.

If you meet the requirements for the franchise and have the cash, it might be a profitable venture to start a Caribou Coffee franchise. You can expect that the brand will be with you from day one to help you achieve growth.


FAQs

What is the franchise fee for Caribou Coffee?

The franchise fee varies between $15,000 and $35,000 depending on the type of outlet you choose.

Is Caribou Coffee profitable?

There is no net information about the franchised stores’ profitability from the company. However, we do know that the company made $50 million in net profits, and the stores make about $500,000 in revenue on average, which is a huge indication that the stores will likely profit, as well.

Who Owns The Caribou Herd?

JAB Holdings, Inc. owns the Caribou Coffee.

What Is The Location Of Caribou Coffee's Headquarters?

The headquarters of Caribou Coffee is located in Minneapolis, Minnesota, in the United States.

Who Founded Caribou Coffee?

Caribou Coffee was founded by John and Kim Puckett with a vision to build personal connections into the coffeehouse experience.

How Many Caribou Coffee Locations Are There?

There are 472 Caribou Coffee locations in the United States.

Sources

https://www.cariboucoffee.com/franchising/

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