For you Coffee Shop Owners...a Question???

[JavaJoe]

Can any of you Coffee Shop owners please help me out with some info? I am about to sign on the dotted line for a Barnie's Coffee & Tea Franchise, and I am trying to figure out how much my monthly expenses will be so that I can see what kind of revenue I have to generate to earn a profit. I need your help to fill in the gaps. The figures below represent known amounts for items such as Rent, CAM, etc, and for the other items such as Salaries, Electricity, I am guesstimating. Can you provide me with figures of any expenses you feel I am leaving out? Also, here is the BIG question, how can I guesstimate the Cost of Goods Sold (coffee, cups, napkins, etc)? If I sell $500,000 worth of revenue in one year, what will that revenue cost me in terms of buying the goods that I sold...10%, 20%, 50%???

Thanks so much for the help!


Rent $3,619

Property Tax $235 (6.5%)

CAM $630 ($4/sqft)

Loan Service $2,453 (Based on a $200,000 loan amount)

Insurance (Liability, Worker’s Comp) $600

Electricity $1,000

Water $1,000

Phone $100

Cable TV & WIFI $100

Payroll $6,690 (1 full time Manager at 7-9% of gross sales salary, plus 420 monthly hours of Part Time help at $7/hr)
Manager is paid on a sliding scale based on annual revenue...<$400,000 @ 7%, $400,000-$500,000 @ 8%, >$500,000 @ 9%

Franchise Royalties, adv fees, misc. Franchise fees, etc. $4,167 (based on 10% of $500,000 annual revenue)

So far, my monthly expenses are $20,594.

PLUS the following that I need to determine...

Cost of Supplies based on revenues of $300,000, $400,000, and $500,000
ANY OTHER COSTS/EXPENSES I AM LEAVING OUT

 

[jpscoffee]

Javajoe,
I sent you a private message.

 

[NW JAVA]

I sure hope you have consulting......or some other expert on location ect...I don't mean to discourage you, but. A reality check is never a bad thig....500k/yr on a startup location, well...I really don't have anything positve to say so I'll shut up.

 

[Polo]

Dear Java Joe,

Why are you doing a franchise? Why not do it yourself and save the $.
If nobody in your area recognizes the franchise name then it may not be worth as much as one thinks. Big names like Pepsi, McDonalds, Budweiser are worth a lot when purchasing a franchise but here where I live nobody knows Java Joint from Java Man. I looked at a number of franchises. Not worth it to give up 10%+ of my gross. I guess my take is to be very careful and do your research.

Your CAM sounds a bit high. Here it's around $1.50-$2.50 per square foot.

 

[Coffee Guy]

Hey JavaJoe:

I guess my first question is, why would you sign on the dotted line if you don't have those answers already? You don't buy first and ask questions later. I agree with Polo and NW Java and their points. If no one has heard of these places, what is the benefit to you? You're basically giving someone money to advertise for them and you are the one that has to build all of the business. Send me a pm and let's see if I might be able to help you. There is nothing wrong with a franchise, but given from what you have described here, I don't feel it's worth that kind of investment.

 

[everydaygourmet]

Can any of you Coffee Shop owners please help me out with some info? I am about to sign on the dotted line for a Barnie's Coffee & Tea Franchise, and I am trying to figure out how much my monthly expenses will be so that I can see what kind of revenue I have to generate to earn a profit. I need your help to fill in the gaps. The figures below represent known amounts for items such as Rent, CAM, etc, and for the other items such as Salaries, Electricity, I am guesstimating. Can you provide me with figures of any expenses you feel I am leaving out? Also, here is the BIG question, how can I guesstimate the Cost of Goods Sold (coffee, cups, napkins, etc)? If I sell $500,000 worth of revenue in one year, what will that revenue cost me in terms of buying the goods that I sold...10%, 20%, 50%???

Thanks so much for the help!


Rent $3,619

Property Tax $235 (6.5%)

CAM $630 ($4/sqft)

Loan Service $2,453 (Based on a $200,000 loan amount)

Insurance (Liability, Worker’s Comp) $600

Electricity $1,000

Water $1,000

Phone $100

Cable TV & WIFI $100

Payroll $6,690 (1 full time Manager at 7-9% of gross sales salary, plus 420 monthly hours of Part Time help at $7/hr)
Manager is paid on a sliding scale based on annual revenue...<$400,000 @ 7%, $400,000-$500,000 @ 8%, >$500,000 @ 9%

Franchise Royalties, adv fees, misc. Franchise fees, etc. $4,167 (based on 10% of $500,000 annual revenue)

So far, my monthly expenses are $20,594.

PLUS the following that I need to determine...

Cost of Supplies based on revenues of $300,000, $400,000, and $500,000
ANY OTHER COSTS/EXPENSES I AM LEAVING OUT

Franchise reps make comissions on selling you their franchises...they will tell you anything to sign, and sign quick.

Don't do it....if you do not have these answers get the answers.

This is the age of the internet...you found this website, now you start digging, and finding real info.

I got roped into a franchise, who told me that Subway was a scam, and would never make it. My franchise was out of business in 3 years, and I went under 6 years later when Subway (the guy who bought the franchise after I told them to get lost) opened this 3rd store.

He is a millionaire....and I'm still working (hard I might add) to make a living, and no retirement in sight. :-D good thing I found Double Americano's to help me in my old age.

Take a night (or a week or a month) and keep digging.


Good luck