Starbucks is one of the largest global coffee chains on the market, with nearly 34,000 global stores. Most of those are licensed businesses. These are owned and operated by entrepreneurs wanting to benefit from Starbucks’ established brand. Unfortunately for U.S. entrepreneurs, Starbucks largely does not accept U.S.-based franchise requests anymore. And, having pushed the start of the second coffee wave, Starbucks has earned that reputation and millions of loyal customers. Globally, Starbucks stores earn more than 925 billion in revenue yearly. This makes it one of the most profitable organizations on earth.
While Starbucks does not offer a franchising program as of 2022, you can License Starbucks. The difference is that with a license, you’re expected to have your own business and an existing audience. In most cases, a Starbucks license should cost you about $315,000. You’ll also be expected to have at least $700,000 in liquid assets. However, the cost of opening a Starbucks franchise style licensed business is not a flat rate. Instead, you should expect to pay a different rate based on country and Starbucks’ established presence in the country.
How Much Does Starbucks Franchise Cost?
Starbucks is not a franchise. In fact, the company has consistently opposed franchising. Its stance against franchising gives Starbucks more control over quality, process, and products. However, the licensing fee normally costs $315,000. On the other hand, that will change depending on factors like which Starbucks licensing you want, your business, and what you want.
For example, you can choose to license Starbucks branded points of sale with self-serve and brewed solutions. These are primarily intended for installation in existing businesses. E.g., a Starbucks branded shop in a train station or a mall. Here, Starbucks prefers to own its own full-service coffee houses.
You can learn more about licensing or franchising Starbucks via their website.
The cost to open a Starbucks branded location heavily depends on whether you opt for a self-service or a brewed location. Here, you can choose the size and implementation of the venue following a discussion with the brand.
- Customizable store design
- Training and Support
- Seasonal promotion
- Proprietary equipment and fixture packages
- Starbucks food and bakery program
- Coffee and merchandise assortment
- Ongoing consulting and brand visits
However, you will have to pay for that, including the location. Some estimates suggest you’ll need at least $700,000 in liquid assets to get started. However, that won’t be the case if you’re installing a tiny one-man brew-station in an existing restaurant. So, startup costs can vary considerably.
Costs to consider include:
- Employee costs (minimum wage at minimum x number of employees needed for your location)
- Base costs for coffee/food/drinks sold
- Electric and gas for the location
- Starbucks Commission Fees – Usually set at 11%
Indeed calculates that you can expect to pay an average of $12.39 per hour per barista and $14.67 per hour for managers. That will, of course, increase and decrease depending on where in the U.S. you are. You can use that to calculate expected total costs based on how many employees your intended setup needs. For example, if you have a full-size Starbucks, you’ll normally expect to have 18-25 full-time employees at any given time.
How Much Profit Does Starbucks Make?
Globally, Starbucks drives considerable revenue. In fact, in 2020, Starbucks saw $20.5 billion in revenue – for $928 million in income. The company has also seen consistent growth, even throughout the pandemic. For example, 2021 saw a 9% increase in transactions and a 10% increase in average ticket size. That’s important, because Starbucks has consistently shown the ability to drive revenue, even on a small scale.
Notably, Starbucks is estimated to make about $808,000 per store, per day in revenue. That does not equate to profit. Instead, you’ll have to subtract costs and expenses out, which results in a global average of $505 in profit per day. However, that will change dramatically depending on factors. For example, location, foot traffic, exposure, competition, and local adoption of the brand. A Starbucks placed in a busy train station is obviously going to make much more than a Starbucks in a bookstore. Therefore, there’s no real way to calculate the average franchise owner salary. That’s simply because the size of the Starbucks can vary considerably.
Business Insurance Required
Starbucks operates on a global scale so they do not have specific requirements for business insurance. However, you will have to take on risks yourself. In addition, Starbucks requires its license operators to comply with local regulation and law. Often, that means choosing business and liability insurance as required by local state or even city regulations.
Starbucks Franchise Facts
Starbucks doesn’t have franchises, but it does have thousands of licensed locations across the U.S. and the globe. Here are some quick facts about those licensed locations.
- Starbucks operates 33,800 stores on a global scale.
- 15,444 of those stores are located in the United States, with over 8,900 owned by Starbucks itself. The remainder is licensed.
- The brand intends to launch 22,000 new locations, mostly micro and small licenses, before 2030.
- Starbucks operates at least 3 unbranded stores in Seattle.
- California has the most Starbucks locations of any state, with 2,974 stores for 19% of the U.S. count. This is followed by Texas with 1,250 and Florida with 804. With a location per 13,285 people, California has almost twice the number of Starbucks per person as Texas.
Starbucks has dominated the fast-food coffee industry since its founding in 1971. The company’s first location was the infamous Pike Place Market. This worked well to launch a brand built around higher quality of beans and higher quality of coffee brew than was currently on the market. The company grew but didn’t start to expand until Howard Schulz bought the company – rolling his existing coffee brand under the name. Within 4 years, the coffeehouse grew from 20 stores to over 100.
In 1992, the company went public for the first time. Stocks went live for $17 per share on the NASDAC: SBUX. And, by 2000, the brand had expanded to over 2,500 locations globally, making it the largest coffeehouse chain in the world.
Starbucks in the News
- In January 2022 Starbucks opened its first Drive-Thru location, to be followed by more across the U.S. and other parts of the world.
- Starbucks launched a proprietary energy drink Baya Energy in January 2022.
- Starbucks is expanding in China with new partnerships and acquisitions.
- Starbucks introduced Greener Stores to test and pilot low-impact stores across the globe.
Owning a Starbucks isn’t possible in the traditional sense. However, you can license Starbucks branding for use in your existing business. Plus, with diverse opportunities and options to set up nearly any size of Starbucks, that licensing offers freedom to business owners. For example, you can add Starbucks to your brand, rather than relying on it. Therefore, costs will always vary. However, the historical licensing fee has been $315,000. Unfortunately, you will have to contact Starbucks for a custom quote to get a more concrete fee.