Opening a franchise store has many advantages since it provides a recognizable brand with popular products. This is why the idea of opening a Starbucks franchise is appealing to many retailers.
If so, you may wonder if Starbucks is a franchise and how you can tap into its phenomenal success. Here is what I discovered!
Is Starbucks A Franchise?
Unlike many other retail giants in the food and drinks industry, Starbucks does not offer franchising opportunities for its stores in the US. However, Starbucks does license kiosks and stalls in locations like airports, bookstores, hospitals, and college campuses. Additionally, Starbucks also allows people to invest in its shares via the stock market.
To learn more about why Starbucks doesn’t have a franchise, how you can get involved, and more, keep on reading!
Does Starbucks Offer Any Alternatives To Franchising?
While Starbucks does not offer franchising opportunities in the US, it does license small kiosks and stalls in locations like airports, hospitals, bookstores, and college campuses.
The best chance for opening a licensed Starbucks stall is if the location gives the company access to a new demographic. However, opening a licensed Starbucks location isn’t cheap.
To become a Starbucks licensee, you will need an initial investment of around $315,000. Starbucks is also very picky about the locations of its licensee locations, which must be in a high-traffic areas with plenty of walk-in customers.
Starbucks will support the licensee through store design, equipment, menus, training, and promotions.
Additionally, Starbucks does offer franchising opportunities for its standalone stores outside the US, in Europe, the Americas, Asia, and Africa.
Why Doesn’t Starbucks Have Franchises?
The company itself owns all standalone Starbucks stores in the US. Unlike other giant chains in the food and drink industry, Starbucks has not used franchising to expand its operations.
This is because Howard Schultz, the former Starbucks CEO who oversaw the company’s expansion, did not want to lose its unique character.
The Seattle-based chain began in 1971 with stores that sold coffee beans, spices, and tea. Schultz joined in 1982 and developed the idea of a coffeehouse based on his travels in Italy.
He wanted a coffee house that focused on the quality of the coffee sold as well as the ambiance and customer experience in the stores.
In 1984, following this idea, Starbucks served its first cup of latte in a downtown Seattle location, which became the first store. The company has been opening new locations ever since and shows no signs of slowing down.
Howard Schultz wrote in his book titled Pour Your Heart Into It that it was the unique culture and value of the company that set it apart. He wanted customers to value the Starbucks experience.
This unique experience has been the secret of Starbucks’ business success. Since this experience would be difficult to maintain in franchise stores, Starbucks has retained ownership of all of its standalone stores in the US.
Further, Starbucks provides its employees with specialized training and special perks and benefits like stock options. Starbucks employees have a unique relationship with the company, which would be difficult to maintain in a franchising model.
How Else Can You Get Involved In Starbucks?
If you love Starbucks and its products, there are a few other options you can explore to get involved. You can invest in Starbucks stocks to share in the profitability.
You could also consider working for Starbucks. Employees get various perks and benefits, including medical insurance, stock options, and college tuition.
What Other Companies Offer Franchises?
If you have your heart set on setting up a franchise store of a popular brand, there are several other options besides Starbucks.
Additionally, chains like 7-Eleven, Dunkin’ Donuts, KFC, and McDonald’s all offer franchising opportunities.
The Secrets Of Starbucks’ Success
Most giant retail chains in the food and drink industry, like McDonald’s, Dunkin’ Donuts, 7-Eleven, KFC, and others, rely on franchises to help expand their locations and outlets across different markets.
Franchises offer them the opportunity to expand with fewer costs and little investment of resources. However, Starbucks has successfully managed to expand its locations without franchising.
The company has over 32,000 stores in 83 locations around the world. It has a 57% share of the total cafe market in the US, which makes it the largest coffee chain nationwide.
The Starbucks coffee name and logo are well-known and recognized around the world. Incidentally, the name is taken from the coffee-loving first mate in Herman Melville’s classic novel Moby Dick.
Most people mistakenly identify the long-haired woman in the Starbucks logo as a mermaid. She is, in fact, a two-tailed siren, another figure from Greek mythology.
Who Owns Starbucks?
In 1987 Howard Schulz bought the Starbucks stores and created the Starbucks Corporation.
Since the launch of its IPO in 1992, Starbucks has been a publicly traded company. The company’s symbol on the NASDAQ exchange is SBUX.
All Starbucks coffeehouses in the US are owned and operated by the company. Outside the US, standalone Starbucks stores do operate as franchises.
What Is The Starbucks Experience?
The Starbucks success story is based on the model of a neighborhood coffee house that Howard Schultz developed based on his travels in Italy.
With comfortable living-room-style seating, a selection of quality gourmet coffees and drinks, pastries and sandwiches, and well-trained baristas, Starbucks offers a mixture of neighborliness and sophistication.
Schultz’s original idea was to make the Starbucks experience part of people’s daily lives. All Starbucks locations have free wireless internet service for customers.
Starbucks stores have become favorite places for people to meet friends, catch up on work, or grab a coffee on the way to work in the morning.
The popularity of this model has led many people to want to open a Starbucks franchise. While this is not possible, since the company owns all its stores in the US, there are some possible alternatives.
Unfortunately, for retailers interested in opening a coffeehouse, Starbucks is not a franchise. However, you can open a Starbucks-licensed kiosk at select locations or explore franchise options with other companies.