With over 35,000 stores globally, Starbucks is one of the biggest coffee chains in the world and is a business opportunity that a lot of people eye. But how much does a Starbucks franchise owner make?
According to the company, Starbucks plans to approach 45,000 stores by the end of 2025, and this could be the perfect time for you to take the plunge and apply for owning a Starbucks.
But how much does it cost to open a Starbucks franchise? What are the needed requirements? How much can you make from it? Keep on reading to find out!
Starbucks was first opened in 1971 along the cobblestone streets of Seattle’s historic Pike Place Market, where they sold fresh-roasted coffee beans, spices, and teas from around the world.
Ten years later, a young New Yorker, Howard Schultz, walked into Starbucks and got captivated by it; he then decided to join it in 1982.
A trip to Milan in the following year inspired him to turn the coffee store into a coffee house, and that is how Starbucks started selling coffee.
In no time, Starbucks expanded to Vancouver, Chicago, Washington, D.C., etc., and by 1996, it expanded internationally to Japan and then to Europe, & China consequently.
Today, Starbucks is one of the most renowned Coffee Houses in the world, and it continues to grow and expand every single day.
Is Starbucks a Franchise?
Even though Starbucks is one of the most popular brands in the world, you will be surprised to know that it does not operate a traditional franchise model.
So if Starbucks does not offer a franchise, then how can entrepreneurs own and operate Starbucks in their city?
Instead of franchising, the company chooses to own and operate all Starbucks stores directly rather than franchising them out to interested candidates.
Can You Still Own a Starbucks?
If your dream of owning a Starbucks franchise got shattered after reading that they do not offer franchising, then do not fret. You can still own a Starbucks!
Even though Starbucks does not offer direct franchising, they do, however, give the rights to its trademarks, allowing a person to run a Starbucks-licensed store.
This gives the Starbucks store owner a sense of autonomy while Starbucks still maintains and holds full control over the store’s operation.
In spite of such popularity and the large number of Starbucks locations in the world, Starbucks does not franchise, and you might be wondering why?
All the Starbucks stores that you see in the United States and Canada are directly managed by Starbucks Coffee. This allows the company to have total control and maintain the quality of its products and service.
If you are living in the United States or Canada, it is highly unlikely that you will ever get approved for franchising. Starbucks franchises are more common in other countries.
In fact, in the USA, Starbucks directly owns 55% of the stores and rest of them are licensed stores.
How Can You Own a Starbucks Store?
You can own a Starbucks by licensing.
By licensing, you can open and run a Starbucks store and receive the right to handle the company’s trademarked items upto a certain extent. However, the company still retains full control.
Think of this as a limited way of franchising where the company gets to have a firm hand over the operations while still allowing you to enjoy the brand’s ownership right.
Licensing a Starbucks
People who want to license a Starbucks are usually those who already own a store in a desirable location where Starbucks would want to open.
For example: if a person owns a mall that is in good running and they wish to open a Starbucks outlet inside the mall. They can then simply contact Starbucks, and if the company sees this opportunity as profitable, they might allow the mall owner to license a Starbucks store.
Note that Starbucks would have full control over the menu, store design, equipment, food, training, promotion, etc. The licensed Starbucks investor would profit from the store but will have very little control over the operations.
Who Can License a Starbucks?
Licensing a Starbucks is not cheap because it requires hefty investment and costs. Opening a Starbucks is not a good decision for someone who has little capital and is looking for a more accessible option.
Ideally, Starbucks license its business to someone who owns a good location and can provide their business with good retail space.
How Much Does It Cost To Open a Starbucks?
You can open a Starbucks by building it from scratch or by buying an existing store.
Whichever option you choose, opening a Starbucks will cost you approximately $350,000 to $1 million on average.
The cost ranges between $350,000 and $500,000 if you open an urban-style Starbucks store and $300,000 and $400,000 for a typical suburban-style store. For airport locations, the investment could come down to $550,000 or more.
The price is inclusive of equipment and the purchase price of the business.
Opening a Starbucks store can be quite lucrative, but it also demands hefty investment, so you must eye for it only if you have the required capital available.
Licensing Fee & Other Costs of Opening a Starbucks
Apart from the initial investment, you must pay $315,000 as a licensing fee to open a Starbucks. Additionally, you must also have a net worth of at least $700,000 to be eligible.
How Much Does A Starbucks Franchise Owner Make?
The money you make as a Starbucks store owner depends on how large your outlet is, how good the location is, and the number of stores you have, among other things.
Although Starbucks is a profitable business opportunity, it is difficult to pinpoint exactly how much Starbucks owners earn.
However, according to a study, on average, a Starbucks store owner earns $250,000 to $300,000 in annual revenue.
Another study reveals that the average Starbucks franchisee makes between $200,000 and $300,000 in pretax income annually.
The profit margin of a Coffee store also varies greatly. For Starbucks, the profit margin is usually an estimated average of $250,000 per year.
Is Starbucks Profitable?
Should you open a Starbucks? Is Starbucks profitable?
Starbucks is leading the coffee chain beating competitors like Tim Hortons, Dunkin’, etc., and is a very profitable company.
In fact, in 2022, Starbucks reported $32.3 billion in global revenue, an increase of 13% compared to the previous year, and also reported a gross profit of $22.313 billion, an increase of 5.52% year-over-year. The stats make it very clear that Starbucks is a profitable company.
How Can I Apply For Starbucks Licensed Store?
In order to apply for Starbucks Licensed store, you simply need to visit their website and fill out a formal application form indicating your formal education, experience, assets, liabilities, etc.
Once you submit the form, you will be contacted by their licensing team to discuss further details.
Opening a Starbucks can be quite lucrative, but owning it is not that simple.
Apart from a solid net worth requirement of $700,000, licensing fees of $315,000, and a hefty initial investment, you also need business experience and meet other criteria.
Even after this, you will only get to enjoy the profits and will have little to no control over the daily operations, especially if you want to open Starbucks in America.
So consider all the options before you make a choice.
We hope you found this article on “How much does a Starbucks franchise owner make” helpful.
Is a Starbucks Franchise or License Worth It?
For an American, opening a Starbucks license store might be worth it only if you own a profitable business location and have the necessary capital. First-time or smaller investors might struggle with approval for a license.
Does Starbucks Offer Franchise?
Starbucks offers franchising only outside of North America and entails opening more than one outlet. The company does not offer franchises in North America and instead allows interested candidates to own a Starbucks via a licensed store.