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Franchise Costs: Detailed Estimates of Scooter’s Coffee Franchise Costs (2014 FDD)

by Franchise Chatter on June 24, 2014

in Coffee Franchise, Franchise Costs

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Scooter's Coffee 2

Detailed Estimates of Scooter’s Coffee Franchise Costs Based on Item 7 (Estimated Initial Investment) of Scooter’s Coffee’s 2014 Franchise Disclosure Document

For Drive-Up Kiosk (Type 1 Store)

  • The total estimated initial investment necessary to begin operation of a Scooter’s Coffee Drive-Up Kiosk ranges from $252,500 to $523,500.

For Coffee Shop With Drive-Thru (Type 2 Store)

1.  Initial Franchise Fee:  $40,000

  • Scooter’s Coffee offers a Multiple Store Development (MSD) Agreement to prospective franchisees seeking to open multiple stores. If you sign an MSD Agreement to open multiple Stores, you must pay an Initial Franchise Fee of $40,000 for the first Scooter’s Coffee Store, plus the Marketing Escrow Fund Contribution, plus a non-refundable $5,000 development fee for each additional Store to be developed.
  • Scooter’s Coffee applies the non-refundable $5,000 development fee paid for the second and each subsequent Store to be developed toward the Initial Franchise Fee for each Store, the remainder of which is paid at a later date. The Initial Franchise Fee is discounted by $5,000 for the second and subsequent Stores.

2.  Marketing Escrow Fund Contribution:  up to $10,000

3.  Leasehold Improvements:  $115,000 to $150,000

  • Typically, this type of Scooter’s Coffee Store will range from approximately 1,300 to 1,800 square feet of retail space and seat up to 25-50 customers inside. Your costs for tenant finish for the Store will depend in large part on the square footage of your Store, whether your space must be completely constructed or is the remodel of an existing space, and the location and overall costs in the market in which you are developing the Store.
  • The estimates in this chart reflect the build-out space that is “ready to occupy” based on the recommended size of Store, although your actual costs may vary under or over the estimates. The leasehold improvements that you will typically make to a built but unimproved location include:  interior remodeling, floor covering, painting, HVAC, millwork, artwork, lighting, electrical, plumbing, design, and other improvements.
  • Although Scooter’s Coffee may supply you with standardized blueprints for a Store, you are responsible for having prepared all required blueprints to suit the shape and dimensions of the Franchised Location.
  • You may receive an allowance from the landlord to finish the interior or build the building, or you may receive a rent credit to cover a portion of the same. You will need to factor this into your cost analysis.
  • If you purchase property or a building, or both, for the Store, your additional costs will depend on the location and size of the land and building. Scooter’s does not typically invest in the land and building for a Scooter’s Coffee Store. It is unable to estimate these costs due to the significant variances based on location and market conditions.

4.  Equipment, Fixtures, and Furniture:  $47,500 to $70,000

  • This item includes the estimated costs to obtain and install the merchandising systems, espresso machine, coffee brewers, coffee grinders, smoothie machines, cooling units, refrigerators, ice makers, sinks, furniture, and shelving, etc.
  • Fixtures include counters for order taking, counters for order pick-up, and display cases.
  • This estimate includes furniture, including tables, chairs, and menu board. This estimate also includes office equipment, including a facsimile machine and a telephone system.

5.  Signs:  $10,000 to $20,000

6.  Point-of-Sale System and Software:  $5,000 to $15,000

  • This item includes the estimated costs to purchase and license a computerized POS System and Internet access. None of these payments are refundable once paid. All of these costs are paid to third party suppliers.

7.  Deposits and Licenses:  $2,500 to $7,500

  • Security deposits, if applicable to your Store, range from one to two months’ rent; utility deposits range from a nominal amount to approximately $500; and business licenses range from approximately $200 to $500 a year. Each or any of these items may exceed the stated range, depending on your location.

8.  Initial Training (travel and living expenses):  $2,000 to $3,000

  • Your travel and living expenses when you attend the initial training program in Nebraska vary depending on the length of your instruction, the distance you must travel, and the standard of living you desire while you attend the program. The high range estimate covers expenses for four people attending the two-week training session in Nebraska.

9.  Opening Inventory and Supplies:  $3,000 to $7,000

  • You must open with and maintain an adequate inventory of menu items, ingredients, paper goods, uniforms, and branded products and merchandise for retail sale. You will be required to purchase several of these items from Scooter’s Preferred Suppliers. Scooter’s anticipates that all of your initial purchases will be from Harvest Roasting.

10.  Additional Funds (3 months):  $15,000 to $35,000

  • This estimates other pre-operational expenses, which have not been separately listed above, as well as additional funds necessary for the first three months of your business operations.
  • This item includes a variety of expenses and working capital items during your start-up phase such as:  debt service, legal costs (for lease review and other costs), accounting fees, rent, insurance premiums, employee salaries, and other miscellaneous costs. However, this item excludes your salary.
  • These figures are estimates and the franchisor cannot guarantee that you will not have additional expenses starting the business.

11.  Total:  $250,000 to $357,500

  • Scooter’s Coffee relied on its principals’ experience in coffee service businesses of the past 23 years when preparing these figures.

For Specialty Outlets (Type 3 Store)

  • The total estimated initial investment necessary to begin operation of a Scooter’s Coffee Specialty Outlet ranges from $99,500 to $263,000.

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