Exploring the Cost of a Starbucks Franchise in Crypto

• Understanding Starbucks' Unique Licensing Model
• The Licensing Approach
• Franchise vs. License
• Securing a Starbucks License
• Costs and Rewards
• The Prospect of Owning a Starbucks

Understanding Starbucks' Unique Licensing Model

Starbucks stands as the premier coffeehouse chain globally, boasting close to 35,000 stores in different corners of the world. Although the green and white logo is a common sight in many towns and cities, the company does not conform to the standard franchising model. Instead, Starbucks has crafted a unique licensing model that significantly influences its operations.

The Licensing Approach

Rather than opting for the conventional franchising route, Starbucks licenses a substantial number of its stores. As of 2023, approximately 49%, translating to over 17,000, of Starbucks locations around the world were licensed. This innovative model was introduced by the company's founder and ex-CEO, Howard Schultz, who held the conviction that retaining company control over the entire Starbucks experience, from product descriptions to store aesthetics, would yield the best customer experience.

Starbucks, therefore, enters into partnerships with successful business entrepreneurs capable of hosting a licensed Starbucks store. The company prioritizes situating its licensed stores in strategic locations that can boost sales. By positioning a Starbucks store in a well-trafficked area with an established customer base, the model seeks to drive additional revenue through licensing.

Franchise vs. License

In exchange for an initial fee and ongoing expenses, Starbucks equips its licensees with training, support, and brand standards that mirror those of a franchise. This approach empowers the company to uphold quality control while still growing via licensing. Licensees, therefore, enjoy the advantages conferred by the Starbucks brand and systems without the freedom often associated with owning a franchise.

Securing a Starbucks License

The procedure for acquiring a Starbucks license entails a thorough vetting of applicants, scrutinizing their financial standing, business acumen, and location. Site visits and paperwork are part and parcel of the process. Considered applicants must have suitable high-traffic business locations and abundant assets.

Costs and Rewards

The average licensing cost stands at roughly $315,000, and Starbucks necessitates proof of $700,000 in liquid assets. Approved licensees gain the Starbucks name and access to corporate support. A single licensee can generate over $120,000 annually, while owners with multiple licenses can earn over $2 million.

The Prospect of Owning a Starbucks

Starbucks does grant a few franchises in certain foreign markets, like the UK. However, traditional franchising is highly restricted. Prospective owners have realized success by licensing Starbucks operations within their existing businesses. Backed by the globally celebrated brand power, a Starbucks license can be incredibly lucrative in the right location.

Edited by Jonathan Stoker