You love coffee, you love the idea of making money and you know the perfect place to open a store. The general thought by any entrepreneur is to get out there an open that store as soon as possible. But with even a short amount of time dedicated to thinking through the nuts and bolts of the operation, it doesn’t take long to realize that there is an incredible amount of behind the scenes work that goes into pouring that first $4.00 cup. There lies the challenge: to build from scratch (potential high reward, definite high risk) or to use a plan that’s already proven (potential high reward, reduced risk).

One out of every eight jobs in the United States is derived from the person who decided to use an already proven plan. Franchising coffee houses is a relatively new industry (in the scope of the business history in this country), and they reason for their success is generally related not to the art of making coffee, but of the systems and procedures learned by the company that simply takes the headache away. Franchising is not a good option for everyone, but certainly should be a consideration for the risk averse investor.

Here are a few rationales that should be considered.

1. Reduced Risk of Failure. When a person decides to buy a franchise, they are buying not only a brand, but the processes and systems that help the brand function. Someone once said that they only real value a business has are its systems. Building systems is expensive, risky and requires a very specific kind of skill set. A new coffee house owner can avoid the need to test systems and procedures by utilizing methods that have already had a litmus test.
2. Brand Awareness Longevity. An area where most new stores fail is in not budgeting enough energy or time for marketing. If people don’t know about you, they will have no way to know they should be drinking your coffee. When you buy into a franchise, there is already a footprint established that you can build upon. Its much easier to start off in fourth gear than it is to climb a hill starting in 1st gear.
3. Tested Operations. A solid franchise will offer a complete, off the shelf, package that includes a robust operations manual. This will help you know exactly how to run the business, what the schedule of events are from franchise agreement signing to opening day, and every detail necessary for success. A good franchisor will tell the new owner, “If you do exactly what we tell you, you will have the greatest chance of success.” In addition, every coffee house needs to have a complete procedures manual, not only as a reference, but that provides step by step training in how to provide the best products for their customers.
4. Exclusive vendor relationships. Franchisors carry a lot of leverage with vendors who will be supplying refrigeration, decor, kitchen equipment, signage, menu boards, espresso machines, grinders … and on and on. Because of that leverage they are able to secure discounts for franchisees that would be nearly impossible to secure without that relationship.

Franchises simplify the entrepreneurial process for those looking at opening an independent coffee shop.

What concerns would you have about becoming a franchisee?