Scooter's Coffee

Patrick Fondaro, co-founder at Vedadbiz. This video's for you if you're interested in opening up a coffee franchise, and in particular if you're exploring the Scooters coffee franchise, or if you'd So they serve specialty coffee, espresso drinks, smoothies, baked goods, and they were founded about 25 years ago, and they've, again, grown to about 250 stores. We're gonna go through the franchise costs, franchise payback, and just how much a Scooters coffee franchise makes. So they're in a very competitive industry, and the ticket is not that high. If someone's buying coffee, maybe they throw in a muffin with it, so it's $7, $10, $12, very different to some other food concepts where the average ticket might be 15, 20, 25, in the quick service restaurant space. So that's one of the issues of very highly competitive, some national brands And with Google reviews, Yelp reviews, it's a little easier if you're out of town and you wanna visit a coffee shop. You don't need to necessarily rely so much on the brand name. You can go on Google reviews and see what independent coffee shop might have a good rating and check out that coffee shop. Getting back to Scooters coffee. So they offer two types of franchises, a drive-thru kiosk, as well as a drive-thru coffee house. Now, I would have thought the kiosk would be significantly less than the drive-thru coffee house. However, it's a pretty wide range on the coffee house where the kiosk is a tighter range. The franchise midpoint for both models is about $700,000. Now, that does include the franchise fee. The kiosk model is gonna set you back anywhere from $500,000 to $900,000, and then the coffee house, slightly lower entry point, potentially at $375,000, but it can go all the way up to a million dollars. And then more and more Scooters coffee franchises are opening up multiple locations and they charge a non-refundable development fee of $5,000 for each additional store open. Ongoing fees, royalty 6%, marketing fees 2%, pretty standard for food and beverage. The average royalty is 5. 3%, but not so much of a difference. Now, big question, how much do Scooters coffee franchise owners make? So, good news, over the past five, six, seven years, since they've been reporting their average and median store sales, they've been going up at a pretty good percentage rate, year over year. Based on a midpoint investment at $710,000, if you're operating at a 10% profit margin, you could expect to yield about 71,000 a year. If it's a 20% profit margin, $142,000 a year. Even if you're operating at a 20%, 25% profit margin, it's gonna take you six, seven years at least to recoup your initial capital investment for a Scooters coffee, including time it takes to find the location, sign the lease, do the build out, break even and start making initial income. So anywhere from six, seven, up to 12, 13 years, you recoup your initial capital investment. Now, there are better franchise opportunities that you can get your money back faster. The key is, are you comfortable using leverage to maybe have a higher cash on cash return with a Scooters coffee, where you get your money, your cash back in three years, four years, are you gonna own and develop the property? And maybe you're making your money back more when you sell the building to a read or some wealthy investor. Or you really So average sales are at the, around the 700K range, so if they're able to add up to 800, 900, a million dollars, then there's definitely a good potential. And I noticed the Kiosk definitely has median sales that are less, and that's at 587,000. So you might wanna reconsider doing the Kiosk model because you're just gonna take, could take 10 plus years to get your money back. So it has to make sense for you. There are quite a few Scooter franchise multi-unit operators. Definitely recommend you speak to some of those franchisees that have decided not to just open one Scooters franchise, but open up multiple locations, and obviously talk to the franchise or reach out to them directly if you're thinking about opening up a Scooters coffee. Hope you If you did, give us a like, We produce daily analysis on franchises and different tools for prospective franchisees to buy the right franchise. Thanks.