There are many factors to consider when thinking about opening a coffee house or coffee franchise.  Here are some things to consider when stepping into the world of coffee:

• What’s the difference between a CrimsonCup coffee house, a coffee house franchise, and an independent coffee house?
• A CrimsonCup coffee house is a business opportunity, similar to a partnership that combines the benefits of a franchise and the freedom of an independent coffee house.  This program allows coffee house owners to design the look and feel of their coffee house, while receiving the support that a coffee franchise provides without charging the fees associated with owning a coffee franchise.  Through CrimsonCup, owners receive a coffee house business plan template, professional site evaluation, coffee bar layout, an equipment package, store opening inventory, and a comprehensive training program.   Once the business owner is up and running, CrimsonCup continues to support the coffee shop owner by providing coffee shop menu boards, pricing guides, a complete drink recipe book, promotional signage, merchandising tools and marketing signs, operating manuals and checklists, continuing marketing support, and the world’s best coffee and tea products.  Since the coffee shop owner purchases CrimsonCup’s coffee and tea products, the arrangement is truly like a partnership.  When the coffee house succeeds, CrimsonCup succeeds.
• A coffee house franchise is a business opportunity in which a business buyer (franchisee) has a relationship with a larger organization (franchisor) that controls the standardization of their business practices.  A franchisor collects a fee up front from the business buyer and also collects an on-going percentage of sales, usually around 6%, from the franchisee.  In this type of relationship the franchisor also controls the look of the coffee house, the marketing for the coffee house and numerous other things to ensure the franchise brand is protected and consistent from store to store.  This often means the franchisee adhere to numerous strict guidelines in order to be a part of the franchise.  Examples of coffee house franchise opportunities are:
• Biggby Coffee www.biggby.com
• Cuppy’s Coffee www.cuppys.com
• The Coffee Beanery www.coffeebeanery.com
• An independent coffee house is a business run by an independent owner without the use of a consultant, partner, or advisor.  This type of coffee house arrangement is often chosen because it allows the owner to have control of the look, feel, and layout of their coffee house.  The danger in owning this type of coffee shop is that the owner often has little training in the coffee business.  Having a lack of knowledge and no support system makes running a viable coffee shop exceptionally difficult.

• Should I hire a coffee consultant?
• Although anyone can open up a coffee shop, when making a large investment of time and money it’s wise to seek out experts in the coffee field to assist along the way.  Any credible coffee shop business consultant, or coffee shop franchise should have many years of solid experience in the coffee shop business with plenty of success stories.  A competent and experienced consultant knows how to avoid common mistakes, and will save you time and money by educating you on best practices. They will combine successful past experience with current coffee shop expertise and the world’s best products to meet ever-changing consumer demands. 

• Understand all the fees:
• Make sure you fully understand what fees are involved.  Typically franchises require an initial fee, plus cost to build your coffee shop, and a percent of your on-going monthly sales (royalty fees).  Typically the franchise fee does not include equipment, coffee shop build out, marketing, or an inventory of coffee shop products.
• Biggby coffee requests a $30,000 franchise fee up front, plus on-going royalties
• Cuppy’s coffee requests a $25,000 franchise fee up front, plus on-going royalties
• The Coffee Beanery requests a $27,500 franchise fee up front plus 6% of gross sales
• CrimsonCup does not require an up front franchise fees or on-going royalties

• Work with a Reputable Vendor:
• Research potential coffee consultants prior to choosing a partnership.  Talk to several companies to get an idea of the type of business plan that will work for you.  As you are researching, look for companies with experienced roast masters, quality coffee products, including top of the line beans, syrups, teas, etc.  Make sure they are working with other coffee shops, and that they have a list of references.  Check their website for customer testimonials.  A reputable coffee consultant or coffee franchise will be able to share with you proof of their success and should be excited to educate you on how they can help you become successful in the coffee field. 

• Brand Recognition
• There are many companies that claim brand recognition.  Dunkin Donuts has recently attempted to step into the specialty coffee arena and has been actively recruiting franchise owners.  Although Dunkin Donuts is a recognizable brand, this franchise is focused primarily on donuts.  As a coffee shop the focus should be on the coffee products that are being sold to the consumer.  Many coffee shop franchises will claim strong brand recognition in the specialty coffee market as a major selling point for their product.  This can be misleading because in the coffee business, Starbucks is truly the only company that can claim strong brand recognition and consumer awareness in the US, and they do not offer franchise opportunities.  http://www.starbucks.com/customer/faq_qanda.asp?name=common

• Training Program:
• Anyone can claim a great training program, but the things to measure it by include: the experience of the trainers, the long term success of those who have been through the training program, where the training takes place, and what is covered.  Look for training not only on how to pull the perfect espresso shot, but also on store operations, customer service, up selling, and efficiencies.  The training program should be comprehensive and teach you how to run a successful coffee shop.  Make sure the company provides you with training materials, as well as hands on training.  Most importantly, a highly regarded coffee house-training program doesn’t end when the coffee shop doors open.  Training should be an on-going means of support.  A trustworthy coffee house consultant or coffee house franchise should be willing to update you on best practices and market research as the coffee industry continues to grown and change. 
• While almost all coffee consultants or coffee franchises will offer some type of training support, when it comes to on-going support it can be a little hazy.  Some coffee franchises will say they offer on-going support from their staff, but are their staff in the field day in and day out making sure their techniques work? Are there other coffee shop owners you can talk to about best practices? How in depth is their support? It’s important to make sure these questions are answered before going into business with a company. 
• Here is some additional information on the type of training and support some coffee consultants or coffee franchises offer:
  • CrimsonCup:  Offers a community of owners to share best practices with and provides on-going support to owners in addition to their standard training program.They are not a franchise and they do not charge on-going fees.  When their customers win they win, so they make every effort to ensure their customers are successful.  They do provide marketing support in addition to their on-going training efforts.
• These companies offer standard training programs and on-going support from their staff.  They do not offer a community to bounce ideas off of or to share best practices with.  Much of their support comes from their marketing team, not field experts.

Biggby Coffee http://www.biggby.com/franchise/training.php

Cuppy’s Coffee http://cuppys.com/training.php

The Coffee Beanery http://www.coffeebeanery.com/franchising/dom_process5.htm

For more information on franchise pros and cons, check out these websites:

http://www.ftc.gov/bcp/franchise/faq1.shtm
http://www.quintcareers.com/franchising_pros_cons.html
http://sbinformation.about.com/cs/bestpractices/a/aa011203a.htm
http://en.wikipedia.org/wiki/Franchise_fee
http://en.wikipedia.org/wiki/Franchising
http://en.wikipedia.org/wiki/Royalties

At CrimsonCup, you receive all the benefits of a franchise: site analysis & location assistance, comprehensive & expert training, store design & layout, brand recognition, and the on-going support of other coffee house owners WITHOUT THE FRANCHISE FEES or ROYALTIES and you can personalize your store the way you want it.  With all these benefits, why would anyone choose a coffee franchise?