Review of the Biggby Coffee Franchise Opp and Startup Costs

If you’re from the midwestern United States, you might just think of the Biggby Coffee when you first think of coffee. Founded in 1995 as “Beaners,” Bob Fish and Mary Roszel opened up their first coffee shop in East Lansing, Michigan. Just 5 years later, they teamed up with one of their first baristas hired, Michael McFall, and began franchising the brand. Beaners was changed to Biggby Coffee in 2007, all of the existing franchisees were given the new name, and the company has continued to grow.

As of 2013, there are 151 franchises operating, all in the midwest and southeast portions of the United States. It is an incredible investment opportunity if you have the capital on hand and are in the expansion locations that Biggby Coffee has targeted. Let’s take a look at this amazing opportunity.

Biggby Coffee Has Recently Cut Their Franchise Fees

Some of the initial franchisees of Biggby Coffee had to pay $30,000 to get the rights to use the name for their own business. Recently, however, the fee has been cut in half to pave the way for more expansion opportunities. That’s right – just $15,000 is required to license the name. In return, you get a 10 year renewable franchise agreement. There’s also a 5% royalty that is paid on all sales under the franchise agreement.

The total cost of starting up a new Biggby Coffee franchise depends on the costs of your local community. The lowest reported investment amount for a startup was just under $160,000 and that included all employees, buildings, and other assets needed to make the business operational. On the other hand, the highest reported startup amount for a franchise is over $315,000.

90% of Franchisees Are Owner/Operators

Biggby Coffee has a requirement that 15 employees are required to properly run a franchise once it has been established. Absentee ownership of the franchise is allowed, which means you don’t actually have to live in the community or work within the operation itself to be granted a franchise. 90% of the franchises, however, have owner/operators that are actively involved in the business. To become an owner, you must have at least $400,000 of net worth backing your investment and have a minimum of $70,000 in cash fluidity available.

Although the initial investment seems affordable, it is the net worth stipulation that trips up a lot of potential franchisees. What Biggby Coffee is doing by putting in these mandatory minimums is insuring that you’ve either got investment capital right now that can keep the franchise afloat or that you’ve got proven business experience that can help them grow the Biggby Coffee brand through your desire to franchise.

What Kind of Training Is Involved With a Franchise?

Because Biggby Coffee wants to make sure that each franchise is operating in a similar fashion, all new franchisees are required to undergo training at the company’s headquarters regarding the best practices found for operations. After 3 weeks of training there, you’ll also receive 2 weeks of training at your franchise location. There’s also 3 weeks of on-the-job training that occurs to make sure all new franchises understand the concepts behind this opportunity.

That’s what sets Biggby Coffee apart from other franchise opportunities in this field. Many just assume that you can figure out on your own how to properly serve coffee, but there’s more to a good coffee shop than that. Getting coffee is an experience, even if you’re just driving through to get a quick cup on your way to work, and it is that atmosphere that will attract new customers to your franchise. That’s ultimately what Biggby Coffee helps you establish should you choose to invest.

What Do You Get In Return For Your Investment?

Again, this is a place where Biggby Coffee stands out from amongst the competition. You won’t just be left out to fester in your chosen community with your franchise and expected to run it as a fully independent business. You’ll be supported with regional advertising dollars, co-op advertising opportunities, and assistance in other ways, such as through lease negotiation. A company newsletter, field operation evaluations, and other forms of support are available as well.

Biggby Coffee doesn’t expect you to just jump right in with an investment either. Every year they hold periodic Discovery Days where you can spend a day within the organization, see its operations, and determine if what they do matches up well with what you want to do. From there, you can begin the franchising process, gather your initial investment together if you wish, and proceed from there.

Why Choose Biggby Coffee As a Franchise?

Coffee is a highly competitive market, but it is also a highly lucrative market. You could start your own coffee stand as Biggby Coffee did two decades ago, but that’s only if there is a lack of coffee shops in your local community right now. Unfortunately, many franchises are in just about every community and that makes starting a brand new business in this field rather difficult.

When you add up the costs of creating and then marketing your new brand, establishing your new location, and hiring your own staff, they are extremely comparable to what starting a Biggby Coffee franchise would cost. That’s why if you’re in the midwestern or southeastern part of the United States, the investment is a good one if you’re looking to diversify your business portfolio into this market. You won’t have to be on your own. You’ll have plenty of regional support!

Starting a Biggby Coffee franchise isn’t going to be right for everyone and, as with any investment, there are risks involved in starting a business. On the other hand, for a relatively small investment upfront and for a small ongoing royalty, you get the chance to operate under an established name, have immediate impact in your community, and potentially be profitable in the first year. That’s ultimately why a Biggby Coffee franchise opportunity is such a tempting prospect and why more owners, operators, and investors are considering it every year.

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