Starting a Starbucks franchise can be a great way to get into the coffee business. With over 20,000 stores in more than 65 countries, Starbucks is one of the most popular and well-known coffee chains in the world.
But before you can open your own store, there are a few things you need to know.
In this article, we will give you an overview of what it takes to start a Starbucks franchise in Canada.
What is a Starbucks Franchise?
A Starbucks franchise is a coffee shop that is owned and operated by an independent business person, rather than by Starbucks Coffee Company itself.
As with any other franchise, the owner pays a fee to use the Starbucks name and logo and agrees to follow the company’s guidelines for running the business.
Related: Starbucks Menu Prices in Canada
Benefits of Starting a Starbucks Franchise in Canada
The Starbucks franchise provides a number of benefits to franchisees including:
Starbucks Has an Established Brand with Loyal Customers
Starbucks has a very strong and established brand. The company has built up a huge customer base over the years that is extremely loyal to the Starbucks brand.
This means that when you open a Starbucks franchise in Canada, you will instantly have access to a large number of potential customers.
Comprehensive Training and Support from Starbucks
As a Starbucks franchisee, you will receive six weeks of comprehensive training at our Seattle Support Center. The first two weeks are spent in the classroom, learning everything from in-store operations to managing finances.
The remaining four weeks are spent in an assigned store, where you will put your knowledge into practice. You will also receive ongoing support from your district manager and field consultants.
The Cost of Opening a Starbucks Franchise Is Relatively Low
In order to open a Starbucks franchise in Canada, the total investment required is between $315,000 and $613,000.
The cost of opening a Starbucks franchise is relatively low when compared to other coffee franchises, making it a more accessible option for potential franchisees.
Additionally, Starbucks has a proven business model and track record of success, which provides a certain level of security for franchisees.
Proven Business Model
Starbucks has a proven business model that has been successful for over 40 years.
When you join the Starbucks family, you will have access to all of the company’s knowledge and expertise, which can help you to quickly get your business up and running.
Be Your Own Boss
When you open a Starbucks franchise, you’ll be able to call the shots and be your own boss.
You’ll have the freedom to make decisions about your store’s operations, including its hours, menu, and décor.
And, you’ll be able to tap into their comprehensive support system to help you run your business.
Access to Strong Marketing Support
As a Starbucks franchisee in Canada, you will have access to the company’s strong marketing support.
This includes national advertising campaigns as well as local store marketing initiatives.
You will also receive help with store design and layout so that your franchise location is welcoming and inviting to customers.
How Much Does Starbucks Franchise Cost In Canada?
The cost of starting a Starbucks franchise varies depending on a number of factors, such as the location of the store and the size of the franchise territory.
However, according to Entrepreneur magazine, the average cost of a Starbucks franchise is around $349,000.
This includes the initial franchise fee of $25,000, as well as the cost of rent, equipment, and other start-up costs.
Starbucks Franchise Cost Breakdown
Starbucks Franchise Licensing Fee – $315,000
For those looking to become a Starbucks Franchisee, you’ll need to pay a licensing fee of $315,000.
This fee gives you the right to use the Starbucks name and logo, as well as access to their coffee, tea, and other beverage products.
In addition to the initial fee, you’ll also need to pay ongoing royalties to Starbucks, which are currently set at 6.5% of your gross sales.
Required Liquid Assets – $700,000
A Starbucks franchise requires a minimum of $700,000 in liquid assets.
This money is necessary to cover the costs of starting up and running the franchise, including rent, equipment, inventory, and payroll.
Starbucks also requires that franchisees have a net worth of at least $3 million.
Royalty Fee – 7%
A royalty fee is a charge assessed by a franchisor to its franchisees. The royalty fee is a percentage of the franchisee’s gross sales and is paid on a regular basis (usually monthly or quarterly).
The franchisor uses the royalty fee to cover the costs of providing ongoing support and assistance to the franchisee, as well as to fund advertising and other promotional activities.
How To Set Up A Starbucks Franchise In Canada
Starting a Starbucks franchise in Canada is not as difficult as it may seem.
There are a few simple steps that you need to take in order to get started. Below is a brief outline of the process:
Read The Starbucks Franchise Disclosure Document
The first step to take if you’re serious about learning how to set up a Starbucks franchise in Canada is to obtain and read the Starbucks Franchise Disclosure Document (FDD).
This document contains important information about the Starbucks franchise opportunity, including details on the franchisor’s business model, the costs and fees associated with franchising, and the company’s track record.
Fill Out The Starbucks Franchise Application
In order to become a Starbucks franchisee, you will first need to fill out an application.
The application will ask for basic information about your experience in the coffee industry, as well as your financial history.
Once you have submitted your application, a Starbucks representative will contact you to discuss the next steps.
If your application is approved, you will be invited to attend a franchise discovery day.
Hiring a Franchise Consultant
Choosing a good franchise consultant is critical to your success as a potential Starbucks franchisee.
A good consultant will have an in-depth understanding of the Canadian market and will be able to provide you with customized advice and support throughout the process of setting up your franchise.
Your consultant should also be able to help you negotiate the best possible terms with Starbucks Canada, and should be able to offer you a comprehensive package of services that includes everything from market research to site selection to lease negotiation.
When choosing a franchise consultant, be sure to ask for references from other Canadian franchisees and make sure to do your own research as well.
Choose a Location
Assuming you have already chosen Canada as the country you wish to open your Starbucks franchise in, it is now time to select a location.
Try to choose a location that will be visible and easily accessible to potential customers.
The location should also have enough space to accommodate a drive-thru if you plan to offer this service.
Obtain the Necessary Licenses and Permits
In order to open a Starbucks franchise in Canada, you will need to obtain a few licenses and permits.
These include a business license, a food service license, and a liquor license (if you plan to sell alcohol).
The process of obtaining these licenses and permits can vary depending on the province or territory you are planning to open your franchise in.
Get Your Finances in Order
Another important step to setting up your Starbucks franchise in Canada is to get your finances in order.
You’ll need to have a solid business plan and access to capital in order to get your franchise up and running.
Make sure you do your research and understand the costs associated with setting up and running a Starbucks franchise.
The Training Process
The next step in setting up a Starbucks franchise in Canada is to complete the mandatory training program.
This program will provide you with the necessary skills and knowledge to operate a Starbucks store successfully.
The training program typically takes 4-6 weeks to complete and is conducted at the company’s headquarters in Seattle, Washington.
Once you have completed the training program, you will be required to complete a written examination and an interview with the franchise selection committee.
If you are successful in both the written examination and the interview, you will be invited to attend a final meeting with the franchise selection committee.
Get Insurance for your Business
You will need to get general liability insurance for your business.
This will protect you in case someone gets injured on your property or if you cause damage to someone else’s property. You can get this insurance through a commercial insurance broker.
You will also need to get workers’ compensation insurance if you have employees.
This is mandatory in most provinces and territories. Workers’ compensation insurance will cover your employees if they are injured on the job.
The next step to opening a Starbucks in Canada is hiring employees. You will need to find individuals who are passionate about coffee and customer service.
In order to find the best employees, you may want to consider holding open interviews.
Once you have found a few individuals that you would like to hire, you will need to train them on how to make Starbucks coffee and provide excellent customer service.
Another important aspect of hiring employees is creating a work schedule.
You will need to determine when your store will be open and when employees will be working.
It is important to create a schedule that works for both you and your employees.