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

• Section I – Estimated initial investment (franchise costs) for a Scooter’s Coffee franchise, based on Item 7 of the company’s 2022 FDD

• Section II – Initial franchise fee, royalty fee, and marketing fee for a Scooter’s Coffee franchise, based on Items 5 and 6 of the company’s 2022 FDD

• Section III – Number of franchised and company-owned Scooter’s Coffee outlets at the start of the year and the end of the year for 2019, 2020, and 2021, based on Item 20 of the company’s 2022 FDD

• Section IV – Background information on the Scooter’s Coffee franchise opportunity, including relevant news updates

• Section V – Presentation and analysis of Scooter’s Coffee’s financial performance representations (average revenues and/or profits), based on Item 19 of the company’s 2022 FDD, including information on the:

• 2021, 2020, 2019, 2018, 2017, 2016, 2015, and 2014 average, median, lowest, and highest gross sales for the franchised Scooter’s Coffee Kiosk Stores and Coffeehouse Stores that were open and operating during the entire 12-month period ending December 31 of the calendar year identified

• 2021, 2020, 2019, and 2018 average and median customer ticket for the franchised Scooter’s Coffee Kiosk Stores and Coffeehouse Stores that were open and operating during the entire 12-month period ending December 31, 2021 and that provided complete information

• 2021 average gross sales, discounts, net sales, cost of goods sold, gross margin, labor costs, rental expense, royalty, card processing, overhead, total expenses, and earnings before depreciation, interest, taxes, and debt service for the franchised Scooter’s Coffee Kiosk Stores and Coffeehouse Stores that were open and operating during the entire 12-month period ending December 31, 2021 and that provided complete information

• historic same-store sales growth for those franchised Scooter’s Coffee Stores that were open for at least 13 months during each of the 8 measured periods (2013-2014 to 2020-2021)

• 2021, 2020, 2019, 2018, and 2017 average, median, lowest, and highest gross sales during the first full month of operations for all franchised Kiosk Stores and Coffeehouse Stores that opened for operation in each of calendar years 2017 to 2021, and remained open and operating as of December 31, 2021

• Section VI – Key ratios, comparables, computations, and analyses for the Scooter’s Coffee franchise opportunity (exclusive content for Platinum subscribers)

Section I – Scooter’s Coffee Franchise Costs

• Scooter’s Coffee (coffeehouse store) franchise costs, based on Item 7 of the company’s 2022 FDD:

• Initial Franchise Fee:  $40,000
• Initial Opening Support Fee:  $15,000
• Site Concept Plan, Preliminary Due Diligence, and Site Work:  $44,000 to $477,000
• Free-Standing Building and Leasehold Improvements:  $264,000 to $796,000 (not including the purchase of land)
• Architectural and Engineering Fees:  $35,000 to $66,000
• Equipment, Fixtures, and Furniture:  $178,000 to $235,000
• Signs:  $45,000 to $71,000
• Point-of-Sale System and Software:  $12,000 to $19,000
• Deposits and Licenses:  $3,500 to $7,500
• Initial Training (travel and living expenses):  $5,000 to $8,000
• Opening Inventory, Supplies, and Smallwares:  $25,000 to $27,000
• Additional Funds (3 months):  $0 to $86,000
• Total Estimated Scooter’s Coffee Franchise Costs (Coffeehouse Store):  $666,500 to $1,847,500

• Scooter’s Coffee (kiosk store) franchise costs, based on Item 7 of the company’s 2022 FDD:

• Initial Franchise Fee:  $40,000
• Initial Opening Support Fee:  $15,000
• Site Concept Plan, Preliminary Due Diligence, and Site Work:  $176,000 to $397,000
• Free-Standing Building and Leasehold Improvements:  $272,000 to $362,000 (not including the purchase of land)
• Architectural and Engineering Fees:  $35,000 to $62,000
• Equipment, Fixtures, and Furniture:  $168,000 to $176,000
• Signs:  $43,000 to $65,000
• Point-of-Sale System and Software:  $12,000 to $19,000
• Deposits and Licenses:  $3,500 to $7,500
• Initial Training (travel and living expenses):  $5,000 to $8,000
• Opening Inventory, Supplies, and Smallwares:  $25,000 to $27,000
• Additional Funds (3 months):  $0 to $86,000
• Total Estimated Scooter’s Coffee Franchise Costs (Kiosk Store):  $794,500 to $1,264,500

Section II – Scooter’s Coffee’s Initial Franchise Fee, Royalty Fee, and Marketing Fee

• Scooter’s Coffee’s initial franchise fee, royalty fee, and marketing fee, based on Items 5 and 6 of the company’s 2022 FDD:

• Initial Franchise Fee:  $40,000
• Royalty:  6% of Net Sales
• Marketing Contribution:  2% of Net Sales
• Local Marketing and Advertising Commitment:  none currently, although Scooter’s Coffee may require you to spend up to 2% of Net Sales for local marketing and advertising in the future
• Regional Marketing and Advertising Cooperatives:  none currently. May vary, with recurring contributions up to 3% of Net Sales.

Section III – Number of Franchised and Company-Owned Scooter’s Coffee Outlets

Franchised

2019

• Outlets at the Start of the Year:  185
• Outlets at the End of the Year:  237
• Net Change:  +52

2020

• Outlets at the Start of the Year:  237
• Outlets at the End of the Year:  289
• Net Change:  +52

2021

• Outlets at the Start of the Year:  289
• Outlets at the End of the Year:  379
• Net Change:  +90

Company-Owned

2019

• Outlets at the Start of the Year:  17
• Outlets at the End of the Year:  27
• Net Change:  +10

2020

• Outlets at the Start of the Year:  27
• Outlets at the End of the Year:  19
• Net Change:  -8

2021

• Outlets at the Start of the Year:  19
• Outlets at the End of the Year:  21
• Net Change:  +2

Section IV – Background Information on the Scooter’s Coffee Franchise

18 Things You Need to Know About the Scooter’s Coffee Franchise

Appoints New Vice President of Development

1.  In mid-July 2021, Scooter’s Coffee announced that Ric Smith has joined the company as senior vice president of development. Smith will lead the franchise sales, real estate, and construction functions. Smith has held a wide array of development team leadership roles with Starbucks Coffee, opening 350 stores in six states; Potbelly Sandwich Works; and Qdoba Mexican Grill, spearheading development and implementation of national corporate and franchise restaurant growth strategies for the 650-location chain across 42 states.

2.  At C2 Education, a national chain of 200 specialized tutoring centers in 14 states, Smith’s department led all aspects of store development, including strategic planning, site selection, legal, lease management, construction, and facilities. As president and CEO of Credit Union Liquidity Services, Smith managed daily activities of a $250-million portfolio owned by a financial institution, including geographically diverse loans and U.S. real estate holdings.

3.  As the senior vice president of development, Smith’s experience and leadership will help underscore the company’s commitment to achieving growth goals while providing innovative ways for customers to get amazing drinks, amazingly fast. Scooter’s Coffee continues to grow rapidly while it strives to provide the best customer drive-thru interaction in the world and also elevates franchisee success through best-in-class franchise support systems. Speed, consistency, and an amazing customer experience is at the heart of Scooter’s Coffee’s sales growth.

4.  Smith earned a Bachelor of Arts degree in Political Science and Business from SMU in Dallas, Texas. He also completed coursework for the Certified Commercial Investment Member (CCIM) designation, comprised of state-of-the-industry commercial real estate coursework in financial and market analysis, investments, and negotiation.

Appoints New Chief Information Officer

5.  At the beginning of August 2021, Scooter’s Coffee appointed Richard Heyman as chief information officer. Heyman will transform Scooter’s Coffee’s technology capability, allowing the company and brand to differentiate itself when providing best-in-class franchise support systems and elevating an amazing experience for its loyal and new customers.

6.  With more than 35 years of experience in information technology, Heyman has successfully led digital transformation for entrepreneurial endeavors and large public enterprises. In working across the retail spectrum, he brought a business focus to IT, making it a value-driver that resulted in significant growth for organizations. Prior to joining Scooter’s Coffee, Heyman served in leadership roles at companies that included Retail Digital Strategy Consulting, Christopher & Banks, Gordmans, Pamida Stores, Distributed Intelligence Systems, Sirius Retail, and Baker’s Supermarkets.

7.  Heyman will advance Scooter’s Coffee’s technology-enabled processes to provide secure and scalable IT solutions that will fuel franchise support and growth. Scooter’s Coffee understands customers want to interact with brands digitally. Heyman’s expertise in digital transformation will result in data-driven, dynamic decision-making, allowing the company and franchise system to elevate overall customer experience while striving to deliver the best drive-thru interaction in the world.

8.  Heyman has a Bachelor of Science degree in Geology and Physics from Tufts University and a Master of Science degree in Geology from Brown University. He subsequently earned a Master of Business Administration and a Master of Information Systems from the University of Nebraska at Omaha.

Celebrates 400th Store Milestone

9.  In mid-April 2022, Scooter’s Coffee celebrated the grand opening of its 400th location in Katy, Texas. The festivities included support for the Houston Humane Society. Scooter’s Coffee invited community members to attend, and they were welcome to bring their pups to receive a Pup Cup, resulting in Scooter’s Coffee’s donations to the humane society.

10.  To help celebrate this amazing day in Scooter’s Coffee’s franchise history, the Katy location debuted Scooter’s Coffee’s latest technologies and processes. Showcasing what the future of Scooter’s Coffee will look like, the Katy site offers the first of many new features for the brand, including exterior digital menu boards, a dual-lane drive-thru, and much more.

11.  Nathan Lester, senior director of drive-thru innovation at Scooter’s Coffee, said, “At Scooter’s Coffee, we are constantly striving to create the best possible experience for our customers, and a part of that is through new technology and innovation. Katy is one of our first locations to offer a dual-lane drive-thru to really enhance the speed in which our customers are getting through the drive-thru from start to finish. In addition, utilizing digital menu boards at this location allows us ample flexibility. We are excited to continue this innovation across all locations nationwide.”

12.  To celebrate 400 stores and the grand opening of the Katy location on April 22, customers who paid or scanned for loyalty on the Scooter’s Coffee mobile app received half off any drink. With the app, customers earn three “Smiles” for every dollar spent to collect toward free drinks for their loyalty. The app is available for download on the App Store or Google Play.

13.  On grand opening day, the Katy location invited customers to bring their pups with them to enjoy a Pup Cup, a delicious mini cup of whipped cream. For every Pup Cup provided on April 22, the Katy location donated $2 to the Houston Humane Society. The Houston Humane Society also had its mobile adoption unit onsite and pets available for adoption from 9 a.m. to 11 a.m. As a bonus, Scooter’s Coffee gave away pet bandanas to the first 400 customers of the day.

14.  Exceeding 400 stores is significant and reflects an important moment for the brand as Scooter’s Coffee advances toward a goal of 1,000 stores by 2024. Scooter’s Coffee is a drive-thru franchise company that has been serving world-class coffee for more than 20 years and is approaching 450 locations in 23 states across the nation. With commitments to build new stores in 30 states, the company plans to open many additional locations in 2022.

15.  Its signature drink is the Caramelicious, and the menu features an array of specialty espresso beverages, single-origin coffee, fruit smoothies, Red Bull Infusions, Cold Brew, baked-from-scratch pastries, and savory breakfast options.

Company History

16.  Scooter’s Coffee was founded as Scooter’s Java Express in 1998 by Don and Linda Eckles in Bellevue, Nebraska. The Eckles were inspired to start their own little drive-thru coffee shop after coming across a similar concept in California. The first Scooter’s Coffee store was a success and by 2001, there were five shops in operation. That same year, the Eckles decided to start franchising the Scooter’s Coffee concept.

17.  Over the next few decades, Scooter’s continued to grow around the U.S. Today, there are Scooter’s Coffee shops across more than 23 states.

Entrepreneur’s Franchise 500

18.  Scooter’s Coffee ranked No. 66 on Entrepreneur’s 2022 Franchise 500 list.

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Scooter’s Coffee Franchise (Item 19, 2022 FDD)

• The following table summarizes the ownership of Stores in operation as of December 31, 2021:

Kiosk

• Franchised Stores:  275
• Affiliate-Owned Stores:  9
• Total Stores:  284

Coffeehouse

• Franchised Stores:  83
• Affiliate-Owned Stores:  7
• Total Stores:  90

Non-Traditional

• Franchised Stores:  21
• Affiliate-Owned Stores:  5
• Total Stores:  26

Total

• Franchised Stores:  379
• Affiliate-Owned Stores:  21
• Total Stores:  400

• This Item 19 does not include financial performance information for any of Scooter’s Coffee’s franchised nontraditional Stores as Scooter’s Coffee currently is not actively marketing non-traditional Stores, and they operate differently from Kiosk and Coffeehouse Stores.

• 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), or within other businesses such as large office buildings.

• As a result, non-traditional Stores operate differently from Kiosk and Coffeehouse Stores, as they generally do not have a drive-thru or significant customer seating available, may not have standard hours of operation, and typically are not located in freestanding locations that are visible to the public from outside.

• This Item 19 also does not include any financial performance information for any of Scooter’s Coffee’s affiliate-owned Stores.

• This Item 19 is separated into five sections. In each section, the franchised Stores that meet the criteria in this Item 19 are referred to as “Participating Stores” (for all such franchised Stores), or for a particular type of Store, “Participating Kiosk Stores” or “Participating Coffeehouse Stores.”

Part 1 – Statement of Average Gross Sales

• This statement includes average Gross Sales of Participating Stores (both Participating Kiosk Stores and Participating Coffeehouse Stores) for each of calendar years 2014 to 2021. For each year, Scooter’s Coffee only included Kiosk and Coffeehouse Stores that were open and operating during the entire 12-month period ending December 31 of the calendar year identified (each a “Measurement Period”).

• The information presented in this Part 1 is based on information Participating Stores provided to Scooter’s Coffee. Scooter’s Coffee has not verified or audited this information.

A.  Participating Kiosk Stores

2021

• Number of Participating Stores:  186
• Average Gross Sales:  $796,655
• Number and Percentage That Attained or Exceeded the Average:  90/48%
• Median Gross Sales:  $776,635
• Lowest Gross Sales:  $209,923
• Highest Gross Sales:  $1,569,308

2020

• Number of Participating Stores:  140
• Average Gross Sales:  $637,104
• Number and Percentage That Attained or Exceeded the Average:  59/42%
• Median Gross Sales:  $587,723
• Lowest Gross Sales:  $161,902
• Highest Gross Sales:  $1,299,039

2019

Part 5 – Average Gross Sales During First Full Calendar Month in Operation

• This statement includes average Gross Sales for the first full calendar month of operations for all franchised Kiosk Stores and Coffeehouse Stores that opened for operation in each of calendar years 2018 to 2021. For each year, Scooter’s only included franchised Kiosk and Coffeehouse Stores that remained open and operating as of December 31, 2021.

• If a Store first opened mid-month, that partial month of initial operations is not included in the data below.

• The table below excludes franchised Kiosk and Coffeehouse Stores that were initially opened as corporate stores by Scooter’s affiliate and then transferred to a franchisee.

2021

• Total Number of New Stores That Opened During the Calendar Year:  95
• Average Gross Sales During the First Full Month of Operations:  $85,852
• Number and Percentage That Attained or Exceeded the Average:  42/44.2%
• Median Gross Sales During the First Full Month of Operations:  $83,347
• Low Gross Sales During the First Full Month of Operations:  $35,521
• High Gross Sales During the First Full Month of Operations:  $162,422

2020

• Total Number of New Stores That Opened During the Calendar Year:  39
• Average Gross Sales During the First Full Month of Operations:  $66,775
• Number and Percentage That Attained or Exceeded the Average:  19/48.7%
• Median Gross Sales During the First Full Month of Operations:  $66,652
• Low Gross Sales During the First Full Month of Operations:  $27,221
• High Gross Sales During the First Full Month of Operations:  $102,739

2019

• Total Number of New Stores That Opened During the Calendar Year:  43
• Average Gross Sales During the First Full Month of Operations:  $44,686
• Number and Percentage That Attained or Exceeded the Average:  20/46.5%
• Median Gross Sales During the First Full Month of Operations:  $42,132
• Low Gross Sales During the First Full Month of Operations:  $13,063
• High Gross Sales During the First Full Month of Operations:  $111,917

2018

• Total Number of New Stores That Opened During the Calendar Year:  26
• Average Gross Sales During the First Full Month of Operations:  $36,742
• Number and Percentage That Attained or Exceeded the Average:  12/46.2%
• Median Gross Sales During the First Full Month of Operations:  $35,936
• Low Gross Sales During the First Full Month of Operations:  $13,336
• High Gross Sales During the First Full Month of Operations:  $66,643

• The table above excludes franchised Kiosk and Coffeehouse Stores that were initially opened as corporate stores by Scooter’s Coffee’s affiliate and then transferred to a franchisee.

• Some outlets have earned this amount. Your individual results may differ. There is no assurance you will earn as much.

• The financial performance figures do not reflect all of the costs of sales, operating expenses, or other costs or expenses that must be deducted from net revenue or net sales figures to obtain your net income or profit.

Section VI – Scooter’s Coffee Franchise Ratios, Comparables, Computations, and Analyses (Exclusive Content for Platinum Subscribers) ⬇️

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