Detailed Estimates of Scooter’s Coffee Franchise Costs Based on Item 7 (Estimated Initial Investment) of Scooter’s Coffee’s 2017 Franchise Disclosure Document
Drive-Thru Coffee House
- Drive-Thru Coffee Houses are generally located in a strip center “end cap” space, or are freestanding buildings with inside seating. Drive-Thru Coffee Houses offer drive-up window service to mobile customers, plus some inside seating to accommodate walk-in customers.
1. Initial Franchise Fee: $40,000
- If you sign an MSD Agreement and this is your second or subsequent Store, Scooter’s Coffee applies the nonrefundable $5,000 Development Fee paid for the second and each subsequent Store to the Initial Franchise Fee.
2. Initial Grand Opening Support and Marketing Fee: $10,000
3. Leasehold Improvements: $158,000 to $262,000 (not including the purchase of a building or land)
- Typically, a Drive-Thru Coffee House Store will range from approximately 1,600 to 1,800 square feet of retail space and have inside seating for up to 25-50 customers.
- Your costs for leasehold improvements for the Store will depend in large part on the square footage of your Store, the extent of the remodeling required, and the location and overall costs in the market in which you are developing the Store.
- The estimates in the above chart assume that the premises of the Drive-Thru Coffee House Store exist and the estimated leasehold improvements reflect the build-out of 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 preparing 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 investment obligation will be significantly higher, and will depend on the location and size of the land and building.
- Scooter’s Coffee does not recommend that you purchase the land or building for a Drive-Thru Coffee House Store. Scooter’s Coffee is unable to estimate these costs due to the significant variances based on location and market conditions.
- The estimates above relate to a Store located in a strip center. Construction costs for a freestanding Store are not included and may be materially different than the estimates set forth above.
4. Equipment, Fixtures, and Furniture: $90,000 to $110,000
- This item includes the estimated costs to obtain and install the merchandising systems, espresso machine, coffee brewers, coffee grinders, smoothie machines, cooling units, oven, refrigerators, ice makers, sinks, furniture and shelving, etc.
- Fixtures include counters for order taking, counters for order pickup, and display cases.
- This estimate includes furniture, including tables, chairs, and a menu board.
- This estimate also includes office equipment, including a telephone system and access to satellite radio.
5. Signs: $12,000 to $20,000
6. Point-of-Sale System and Software: $2,500 to $4,000
- 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 $7,000
- 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 $4,000
- Your travel and living expenses when you attend Scooter’s Coffee’s 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 Scooter’s Coffee’s four-week training session in Nebraska.
9. Opening Inventory and Supplies: $7,000 to $9,000
- 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 Coffee’s Preferred Suppliers. Scooter’s Coffee anticipates that all of your initial purchases will be from Harvest Roasting or a vendor recommended by Harvest Roasting.
10. Additional Funds for 3 Months: $10,000 to $30,000
- This estimates other pre-operational expenses, which Scooter’s Coffee has not separately listed above, as well as additional funds necessary for the first three months of your business operations.
- These figures are estimates and Scooter’s Coffee cannot guarantee that you will not have additional expenses starting the business.
- Your costs depend on factors such as: the extent to which you follow Scooter’s Coffee’s methods and procedures; your management skill, experience, and business acumen; local economic conditions; the local market for Scooter’s Coffee’s products and services; the prevailing wage rate; competition; and the sales level reached during this initial period.
- This item includes a variety of expenses and working capital items during your startup 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.
11. Total: $334,000 to $496,000
- Scooter’s Coffee relied on its affiliate’s and predecessor’s experience in coffee service businesses of the past 19 years when preparing these figures. These figures are estimates only and Scooter’s Coffee cannot guarantee that you will not have additional expenses in starting or operating your Store.
- The total estimated initial investment necessary to begin operation of a Scooter’s Coffee Drive-Thru Kiosk ranges from $354,500 to $514,000.
- There is no seating in Drive-Thru Kiosks and sales are primarily of drinks served through drive-up windows.
- The total estimated initial investment necessary to begin operation of a Scooter’s Coffee Non-Traditional Store ranges from $98,000 to $261,000.
- Non-Traditional Stores are carts or small spaces located in specialty locations (e.g. airports, hospitals, stadiums, train stations, malls, military bases, amusement parks, and business atriums).