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What is a Coffee Franchise?

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  • Written By: Mary McMahon
  • Edited By: O. Wallace
  • Last Modified Date: 19 November 2016
  • Copyright Protected:
    2003-2016
    Conjecture Corporation
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A coffee franchise is a coffee business which utilizes business practices, products, and trademarks which are licensed by their original owner. Franchises are usually locally owned, funded, and staffed, but they use the proven business techniques of a larger parent company. There are scores of coffee franchises which can be found all over the world in locations ranging from airport lounges to rural communities.

There are a number of reasons why people may opt to open a franchise instead of starting a new business. Franchises have a recognized name, which can build an instant customer base, especially if members of a community have been agitating for a particular franchise. A coffee franchise also comes with access to the complete line of the company's products, eliminating the need to work out deals with suppliers, and the company which grants the franchise also provides training for employees, uniforms, signage, and so forth. The franchise is literally a business in a box.

For the company which authorizes a coffee franchise, giving out franchises allows the company to expand and capture a larger market share with decreased personal risk. The coffee franchise operator runs the financial risks including the initial outlay of cash needed to get the business going, while the parent company stands to take a much smaller potential loss. The franchise also agrees to give up a percentage of its profits, generating a steady flow of income for the company which provides the license.

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The market for coffee and related products is very large in many areas. In cities, it is not uncommon to see multiple coffee franchises thriving on the same block to meet the needs of busy residents. Franchise operators are generally allowed some leeway, as for example when the parent company decides to make special offers to customers; the franchise can decide which offers it wants to honor and advertise on the basis of the demographics of the community where it operates.

People who are interested in opening a coffee franchise can contact companies which offer franchises to determine whether or not they are interested. An application usually needs to demonstrate that the business has a chance to succeed in the community, and that the franchise operator has funds and backing to get the business going. Sometimes people may go in on a coffee franchise together, with the potential to buy individual partners out once the business is well established.

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