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  1. #1
    Junior Member
    Join Date
    Feb 2006
    Posts
    2

    Looking to open franchised shops in Florida

    A friend of mine is looking to open about 5 small upscale strip malls in Florida. He had been in contact with Starbucks, but when he heard I was looking at getting in the business, he asked me instead of them. We are looking at end caps with drive thru's on all of them. We have talked to a small franchise in Michigan that we are quite impressed with.

    We have a couple of concerns. We are from the midwest and used to the cold. Coffee shops up here crank in the winter. How does the warmer weather effect sales? My sister in law lives in Los Angeles and she says the Starbucks are busy year round there. Any one have any insight on this?

    Also we have figured we want to be at 16-20% net profit margin on $750,000 annual sales. After paying royalty fees and debt service, we think we can achieve this. Are we living a pipe dream?

    Thanks

  2. #2
    Senior Member
    Join Date
    Dec 2005
    Location
    New York
    Posts
    201
    wow , alot to consider, are these shops that you are going to open your self? first of all I would consider creating your own brand, name and style, coffee franchises are not worth the money. better to pay someone upfront to help you get started. The only coffee house that has that much name reconition is starbucks and they do not franchise.

    Once you have your spaces ready to go, a consultant and along with your coffee roaster will help you get started and up and running. You don't want to pay a monthly franchise fee for local marketing that you can do your self.

    We have 4 stores and are building two more this year, that what we did is build our own brand.

  3. #3
    Junior Member
    Join Date
    Feb 2006
    Location
    Over the Rainbow
    Posts
    16
    Pipe dream? Might be. But not due to the heat. As a Texan very familiar with hot weather I can honestly say that the shops in this neck of the woods do a great business year round.

    It's the $750k figure that maybe a bit high. That works out to over $2k a day - and that's everyday. Divide that by your average sale to see how many customers you'll need. My guess is that you'll need a line out the door from open to close to hit those numbers. For instance, to hit $750k with a $5 average you'll need 28.28 customers per hour assuming a 14.5 hour day. That's not impossible, but it may not be substainable.

    If you were able to hit those numbers I'd expect a profit of $175k. But that's my take. And it's all based on average sales that I can't seem to get anyone to comment on. Let me know if you'd like a copy of the spreadsheet I created. Does all the math for you. Caution though - you might not like the numbers it gins. It's brutally honest.
    Keith
    Opening Sooner or Later Down Texas Way

  4. #4
    Junior Member
    Join Date
    Feb 2006
    Posts
    2

    Franchise

    There is a franchise that we have researched fairly well. I have also spoke with 3 of the franchise owners. Very honest people. There are 12 of them within our city of about 250-275,000 people. The top one does over $1 mil a year, with 3 others that do $750+.

    I spoke to one of the $750+ owners today and he said to hit my numbers I would need 600 cups a day sold. He said this can be done in the right location. He does between $1800-2300 a day. We are meeting with the owner later this week to get more info.

    We toured the roasting plant and we're blown away by the knowledge of the founder. He had traveled all over the world researching the coffee industry before he opened his original location.

    We are willing to pay more in rent for a primo location and think we have this locked in with the strip mall thing. We figure $275-310,000 to open each location. We are looking to open the second within 12-14 months after the first and the other 4 within 6 months of each other.

    This will be our first coffee shop although I grew up in the restaurant business and worked in sales for a food distributor. My partner will manage the first business to start and then I will join in after the 3rd location is opened. What do you guys think?

  5. #5
    Senior Member
    Join Date
    Dec 2005
    Location
    New York
    Posts
    201
    I have given you my opinion, $275,000-$350,000 for startup, geez hope your not paying most of that to the franchise operater.

  6. #6
    Senior Member
    Join Date
    Oct 2003
    Location
    Seattle,Washington USA
    Posts
    874
    WOW! Holy Cow Batman That's a whole lotta money man I have to agree with MC's assesment. Why would you employ a franchise with that kind of money, especially if they already have about a dozen locations in your area. Sounds more like you plan to buy into a job instead of building your business. How long have these franchise owners been in business, and what is their annual NET take home? As for your friend that's considering building these strip malls, what kind of interest does he/she have (if any) in partnering up with you? For the numbers you've given us here it appears that you have been bitten by the (Tully's Bug) i.e., doing major build outs to compete with Starbucks. I might also add, don't use Starbucks as your model. Remember they have many shareholders as back up to their spending, not to mention they have been doing this for many moons Here is a good rule of thumb...Open one first and learn the business before you think too far ahead. If I had a nickel for everyone that I've spoken with that had plans to open multiple locations...Well that's another story You might want to pm Topher and get his thoughts, he's somewhere down in your neck of the woods, Florida that is
    "A Word of Difference"TM

  7. #7
    Super Moderator
    Join Date
    Aug 2003
    Location
    Boca Raton
    Posts
    3,291
    Where in Florida? There a couple of drive thrus here in FL and they do well...over $2,000 a day is a lot of loot....the only place I saw that did over that was the casino..$3000-$4000 a day...record day being just under $15,000..
    "Wine is for aging, not coffee."
    Ken Hutchinson, Starsky and Hutch

  8. #8
    Junior Member
    Join Date
    Jun 2014
    Posts
    9
    Quote Originally Posted by Mocha Psyc View Post
    Pipe dream? Might be. But not due to the heat. As a Texan very familiar with hot weather I can honestly say that the shops in this neck of the woods do a great business year round.

    It's the $750k figure that maybe a bit high. That works out to over $2k a day - and that's everyday. Divide that by your average sale to see how many customers you'll need. My guess is that you'll need a line out the door from open to close to hit those numbers. For instance, to hit $750k with a $5 average you'll need 28.28 customers per hour assuming a 14.5 hour day. That's not impossible, but it may not be substainable.

    If you were able to hit those numbers I'd expect a profit of $175k. But that's my take. And it's all based on average sales that I can't seem to get anyone to comment on. Let me know if you'd like a copy of the spreadsheet I created. Does all the math for you. Caution though - you might not like the numbers it gins. It's brutally honest.
    could you send me that spread sheet?? I am in need of honesty.
    cautillig at g mail

  9. #9
    Junior Member
    Join Date
    Apr 2018
    Posts
    1
    If you can send me this spread sheet as well....

  10. #10
    Super Moderator
    Join Date
    Aug 2003
    Location
    Boca Raton
    Posts
    3,291
    alang...I pretty sure you are not going to get a reply from them. The post is from over 12 years ago.
    "Wine is for aging, not coffee."
    Ken Hutchinson, Starsky and Hutch

 

 
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