In this FDD Talk post, you’ll learn the following:

• Section I – Background information on The Human Bean franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for The Human Bean franchise, based on Item 7 of the company’s 2019 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for The Human Bean franchise, based on Items 5 and 6 of the company’s 2019 FDD

• Section IV – Number of franchised and company-owned The Human Bean outlets at the start of the year and the end of the year for 2016, 2017, and 2018, based on Item 20 of the company’s 2019 FDD

• Section V – Presentation and analysis of The Human Bean’s financial performance representations, based on Item 19 of the company’s 2019 FDD, including information on the:

• 2018 average sales, cost of goods sold, gross profit, advertising, amortization expense, automobile expense, bank service charges, computer expense, contributions, depreciation expense, dues and subscriptions, employee benefits, insurance, interest expense, landscape maintenance, linens, licenses and permits, maintenance, office supplies, operating supplies, payroll expenses, payroll taxes, postage and delivery, printing and reproduction, professional fees, rent, repairs, security, taxes, telephone, travel and entertainment, utilities, total expenses, and net income for the 13 affiliate-owned The Human Bean drive-thru stores that were in operation for the entire 12-month period ending December 31, 2018

Section I – Background Information

16 Things You Need to Know About The Human Bean Franchise

Appoints New Chief Operating Officer

1.  In late January 2020, The Human Bean announced the appointment of Scott Anderson as chief operating officer. Dan Hawkins, president, CEO and co-founder of The Human Bean, said, “Scott joins The Human Bean during a pivotal time in the company’s maturity and with his vast leadership experience and proven track record in rapid growth and brand building, he’s exactly what we need to take The Human Bean into the future.”

2.  Anderson has 30+ years in retail and franchising, with experience in product innovation, brand expansion, and building strong teams. Anderson is stepping into his new role after serving as senior vice president of U.S. business with The Learning Experience, a leading franchise academy of early education.

3.  Before The Learning Experience, Anderson was the CEO of a fast-casual chain where he led strategy and planning for a large private equity group’s exit. Prior to that, Anderson held a variety of leadership and executive roles with The Wendy’s Company and as a multi-state Wendy’s franchisee with his family.

4.  According to Anderson, “I love helping franchisees grow and enhance their business, and I am thrilled to be a part of a strong team and growing brand. The Human Bean has a strong base of successful franchisees, a compelling value proposition for new franchisees, and a significant brand following with consumers asking for growth and expansion. With a passion for creating authentic human connections, The Human Bean and I are both excited for this next phase of growth.”

Holds Annual ‘Coffee for a Cure’ Fundraising Event

5.  In mid-October 2019, during Breast Cancer Awareness month, The Human Bean held its annual breast cancer fundraising event, Coffee for a Cure. All proceeds on October 18 from all The Human Bean locations in 11 states were set to be donated to local breast cancer agencies.

6.  This has become a hugely successful and effective event for the brand. In Oregon alone, between Providence Foundation and Asante Rogue Regional Medical Center, The Human Bean has helped fund over 1,600 mammograms or about 145 per year. This is along with follow-up care and ongoing patient support.

7.  According to The Human Bean, the company got the idea for this annual fundraising event back when hurricane Katrina hit and The Human Bean had a donation day to help support the Red Cross. The following year, the company decided that it wanted to make its donation day an annual event. The Human Bean wanted to help each of its own communities by doing so. Therefore each location donates to their local community.

8.  After talking to people, The Human Bean found out that Oregon and Washington had the highest rates of breast cancer in the country (at the time). Everyone at The Human Bean said they had someone in their lives that had been affected by breast cancer. So the company thought it was a cause that could really help people in the stores’ communities.

9.  The Human Bean works directly with local foundations. They allocate the funds to help the patients that need help the most: uninsured or under-insured.

10.  Since starting Coffee for a Cure 13 years ago, The Human Bean has lost a barista, a franchise owner, family, and friends to breast cancer.

11.  The brand is happy to report that since starting the donation day, how its funds are used is beginning to change. More people are insured, getting early detection, and surviving the disease. The Human Bean now support patients with expenses while going through treatment. The donations also help with a lot more preventive scans for early detection and education.

12.  At the end of The Human Bean’s 14th annual Coffee for a Cure event in 2019, the brand announced that it had raised $306,618.98. This brings the brand’s current total up to $1,854,269.38.

Company History

13.  The Human Bean was founded in 1998 by Dan Hawkins, his wife Rhonda, his best friend Tom Casey, and Tom’s wife Tami in Ashland, Oregon. The Hawkinses and Caseys recognized a demand for convenient, quality coffee and espresso, and started The Human Bean as a drive-thru coffee stand. The Human Bean quickly established a reputation for having friendly and experienced baristas and offering the highest quality ingredients.

14.  After expanding to other areas in Southern Oregon, the Hawkinses and Caseys decided to start franchising The Human Bean concept in 2002. Over the past couple decades, The Human Bean has taken its growth slow and steady. There are now corporate-owned and franchised locations in 11 U.S. states, including Arizona, California, Colorado, Idaho, Missouri, Nevada, Ohio, Oregon, Texas, Kentucky, and Washington.

15.  The Human Bean has their own coffee sourcing program called Farm Friendly Direct. This program works directly with farmers around the world to form long-term relationships and support the farming community. This ensures a good supply of coffee beans from the farmers and helps the farming community have a better life.

Entrepreneur’s Franchise 500

16.  The Human Bean ranked No. 185 on Entrepreneur’s 2020 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of The Human Bean franchise costs, based on Item 7 of the company’s 2019 FDD.

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

• Please click here for detailed information on The Human Bean’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2019 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2016

• Outlets at the Start of the Year:  44
• Outlets at the End of the Year:  53
• Net Change:  +9

2017

• Outlets at the Start of the Year:  53
• Outlets at the End of the Year:  58
• Net Change:  +5

2018

• Outlets at the Start of the Year:  58
• Outlets at the End of the Year:  68
• Net Change:  +10

Company-Owned

2016

• Outlets at the Start of the Year:  14
• Outlets at the End of the Year:  13
• Net Change:  -1

2017

• Outlets at the Start of the Year:  13
• Outlets at the End of the Year:  13
• Net Change:  0

2018

• Outlets at the Start of the Year:  13
• Outlets at the End of the Year:  13
• Net Change:  0

Section V – Financial Performance Representations (Item 19, 2019 FDD) and Analysis

• The following table provides historical financial performance data based on the unaudited financial statements of 13 affiliate-owned stores for the 12-month period ending December 31, 2018.

• The data The Human Bean used in calculating the table below is only from its affiliate-owned stores, and does not include data from franchised outlets not owned by affiliates.

• During the fiscal year ending December 31, 2018, a total of 81 The Human Bean drive-thrus were in operation. Of those, 13 were affiliate-owned outlets and 71 were franchised outlets.

• The Human Bean presents total costs and average net profits exclusive of owner income and owner expenses, meaning owner travel expenses and owner use of a company car. The Human Bean does not treat these as expenses a franchisee should expect to incur for purposes of this Item 19.

• Expenses for bookkeeping, payroll, and accounting are likewise excluded. As a franchisee, you will choose how you treat owner expenses (if any) and how to account for and pay any tax on owner income from your outlet.

• Some affiliate-owned outlets have sold or earned as much as in the table. Your individual results may differ. There is no assurance you’ll sell or earn as much.