Caribou Coffee is establishing a new domestic franchise program that will allow franchisees to open a coffeehouse outside of airports, college campuses, grocery stores, and corporate headquarters.
Continue reading for more information.
About The Caribou Coffee
Caribou Coffee is the 2nd biggest company-owned gourmet coffeehouse operator in the United States.
It is a chain of coffee shops that sells coffee, teas, baked goods, sandwiches, and other beverages and foods.
Caribou Cabin, a new variant with a substantially smaller size and drive-thru, was released in 2019.
The brand was well-positioned for the shift in consumer behavior. Caribou Coffee’s success is due to more than just their delectable menu.
But also in their tried-and-true business model, which includes their well-known benefits for frequent visitors and gift cards.
The Caribou Cabin design, combined with the concept’s traditional coffeehouse prototype, which has a larger footprint for sit-down meals, gives franchisees various options to respond to their market’s specific needs and help them develop faster.
They provide franchise opportunities around the United States to qualified individuals who share their mission and wish to provide their community with amazing interactions and artisan beverages.
Caribou Coffee Franchise Model
| Cost or Fee | Amount or Percentage |
|---|---|
| Initial Franchise Fee | $15,000- $30,000 |
| Total Investment | $446,100 to $732,300 |
| Royalty Fee | 6.0% |
| Area Requirement | N/A |
| Total Outlets | 718 |
Caribou Coffee Essential Qualifications
They’re looking for highly qualified, enthusiastic Caribou Coffee Sub-franchisees to assist you in bringing Caribou Coffee to Middle Eastern markets.
If you meet the criteria, you can be an outstanding candidate:
- Have a track record of effectively introducing new restaurant brands to your community.
- You must live, work, and have strong business ties in the area you want to franchise.
- Have experience in retail real estate development in the area where you want to franchise.
- Have the infrastructure and resources in place to keep up with our development timeline
- Commit to a multi-unit development strategy to open at least five stores in the next five years.
- Have the financial means to build the Caribou Coffee brand further.
Caribou Coffee Franchise Revenue & Profit
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.
Caribou Coffee Obligations And Restrictions
Franchisees must devote their time and best efforts to the administration and operation of the Franchised Business and must complete the initial training program.
Franchisees or a manager who has completed the first training program to the franchisor’s satisfaction must manage the franchised business at all times.
Caribou Coffee Failure Rate
System-Wide Summary From 2020 to 2022
Franchised Outlets:
| Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|
| 2020 | 130 | 132 | +2 |
| 2021 | 132 | 139 | +7 |
| 2022 | 139 | 145 | +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:
| Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|
| 2020 | 317 | 316 | -1 |
| 2021 | 316 | 321 | +5 |
| 2022 | 321 | 339 | +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:
| Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|
| 2019 | 448 | 446 | -2 |
| 2020 | 446 | 460 | +12 |
| 2021 | 460 | 484 | +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
2021 Average Kiosk Franchise Sales: $633,227
| Initial Investment (midpoint) | %Profit margin of average franchise sales | Estimated profits | Time to recoup investment |
|---|---|---|---|
| $427,700 | 12.5% | $79,153 | 7 years |
| $427,700 | 17.5% | $110,814 | 5.5 years |
| $427,700 | 22.5% | $142,476 | 4.5 years |
Based on the average franchise sales of Caribou Coffee, at an average of 17.5% profit margin, it will take 5.5 years to recoup the amount of investment.
Term And Renewal Of Agreement
The initial franchise term of Caribou Coffee franchises is ten years, and it is five years for kiosk franchises.
Renewal of the term is for two further terms, subject to contractual limitations, by signing the then-current franchise agreement.
Caribou Coffee Training
Individual franchisees who are sent to training must complete the program (including passing operations and competence tests) to the franchisor’s satisfaction and will be designated as a “Certified Manager” once they have done so.
The Certified Manager program is a 14-day program. The training will be held in the franchisor’s training center in Minneapolis, Minnesota, or at a certified training store designated by the franchisor.
Caribou Coffee Comparison
| Company | Caribou Coffee | Dutch Bros |
|---|---|---|
| Founded In | 2019 | 2019 |
| Initial Investment | $446,100 to $732,300 | $120,000 – $1,000,000 |
| Franchise-Fee | $15,000- $30,000 | $30,000 |
| Total Outlet | 718 | 292 |
| Annual Revenue | $262 Million | $186.4 Million |
Frequently Asked Questions
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.
What is the mission statement of Caribou Coffee?
“An experience that makes the day better” is Caribou’s mission statement.
Is Caribou Coffee a franchise?
Caribou Coffee offers franchise opportunities throughout the United States to eligible candidates who believe in their mission and want to bring day-making moments.
How much does a Caribou Coffee franchise cost?
The franchise fee for a Caribou Coffee franchise is $15,000- $30,000, and the cost of investment ranges from $446,100 to $732,300.
Who founded Caribou Coffee?
Caribou Coffee was founded by John and Kim Puckett with a vision to build personal connection into the coffeehouse experience.
How Many Caribou Coffee Locations Are There?
There are 472 Caribou Coffee locations in the United States.
Amit Gupta is an experienced expert in digital marketing and co-founder of DrFranchises. With more than 11 years of knowledge in franchise digital marketing, SEO, email marketing, and social media marketing, Amit has helped many brands achieve incredible success online. As a passionate entrepreneur and owner of 7 franchises, he continues to study franchise models, looking at costs, revenue, and profitability to guide brands toward profitable growth. When he’s not working on digital marketing, Amit enjoys spending time playing with his beloved dog.