Scooter's Coffee Franchise: Average Sales ($876K) vs. Cost ($797K-$1.34M)

In this exclusive Franchise Chatter 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 2023 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 2023 FDD

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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 2020, 2021, and 2022, based on Item 20 of the company’s 2023 FDD

Section IV – News updates on the Scooter’s Coffee franchise opportunity

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 2023 FDD, including information on the:

2022, 2021, 2020, 2019, 2018, 2017, 2016, 2015, and 2014 average, median, lowest, and highest gross sales for the franchised Scooter’s Coffee Kiosk Stores that were open and operating during the entire 12-month period ending December 31 of the calendar year identified

2022, 2021, 2020, 2019, and 2018 average and median customer ticket for the franchised Scooter’s Coffee Kiosk Stores that were open and operating during the entire 12-month period ending December 31, 2022 and that provided complete information

2022 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 that were open and operating during the entire 12-month period ending December 31, 2022 and that provided complete information

historic same-store sales growth for those franchised Scooter’s Coffee Kiosk Stores that were open for at least 13 months during each of the 7 measured periods (2015-2016 to 2021-2022)

2022, 2021, 2020, 2019, and 2018 average, median, lowest, and highest gross sales during the first full month of operations for all franchised Scooter’s Coffee Kiosk Stores that opened for operation in each of calendar years 2018 to 2022, and remained open and operating as of December 31, 2022

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 (Kiosk Store) franchise costs, based on Item 7 of the company’s 2023 FDD:

Initial Franchise Fee: $40,000
Initial Opening Support Fee: $15,000
Site Concept Plan, Preliminary Due Diligence, and Site Work: $176,000 to $475,000
Freestanding Building and Leasehold Improvements: $267,000 to $427,000 (not including the purchase of land)
Architectural and Engineering Fees: $40,000 to $54,000
Equipment, Fixtures, and Furniture: $168,000 to $179,000
Signs: $43,000 to $63,000
Point-of-Sale System and Software: $14,500
Deposits and Licenses: $3,500 to $6,000
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 $33,000
Total Estimated Scooter’s Coffee Franchise Costs: $797,000 to $1,341,500

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 2023 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

2020

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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

2022

Outlets at the Start of the Year: 379
Outlets at the End of the Year: 525
Net Change: +146

Company-Owned

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

2022

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Outlets at the Start of the Year: 21
Outlets at the End of the Year: 30
Net Change: +9

Section IV – News Updates on the Scooter’s Coffee Franchise

Scooter’s Coffee Reaches 500 Stores Across the US

Former Starbucks Executive Brings Learnings to Scooter’s Coffee

Scooter’s Coffee Hires Tim Arpin as Chief Sales Officer

Scooter’s Coffee Chief Sales Officer Tim Arpin Will Help Elevate and Expand the Brand Across the U.S.

Scooter’s Coffee Announces Franchise for Northeast Florida

Scooters Brewing Up Growth in Illinois

Scooter’s Coffee Ranked No. 59 on Entrepreneur’s 2023 Franchise 500 List

Section V – Financial Performance Representations (Average Revenues and/or Profits) for the Scooter’s Coffee Franchise (Item 19, 2023 FDD)

The following table summarizes the ownership of Stores in operation as of December 31, 2022:

Kiosk

Franchised Stores: 421
Affiliate-Owned Stores: 19
Total Stores: 440

Coffeehouse

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

Non-Traditional

Franchised Stores: 21
Affiliate-Owned Stores: 4
Total Stores: 25

Total

Franchised Stores: 525
Affiliate-Owned Stores: 30
Total Stores: 555

This Item 19 does not include financial performance information for any of Scooter’s Coffee’s franchised non-traditional Stores as Scooter’s Coffee currently is not actively marketing non-traditional Stores, and they operate differently from Kiosk 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 Stores, as they generally do not have a drive-thru, may not have standard hours of operation, and typically are not located in freestanding locations that are visible to the public from outside.

In addition, this Item 19 does not include financial performance information for any of Scooter’s Coffee’s “Coffeehouse Stores” (as defined below) as Scooter’s Coffee currently is not actively marketing Coffeehouse Stores. A “Coffeehouse Store” generally is located in a strip center as “end cap space,” although these Stores occasionally may be a freestanding building. As a result, financial performance information for Coffeehouse Stores likely differs from Kiosk Stores, as they offer inside seating to accommodate walk-in customers.

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 Kiosk Stores that meet the criteria in this Item 19 are referred to as “Participating Kiosk Stores.”

Part 1 – Statement of Average Gross Sales

This statement includes average Gross Sales of Participating Kiosk Stores only for each of calendar years 2014 to 2022. For each year, Scooter’s Coffee only included Kiosk 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 Kiosk Stores provided to Scooter’s Coffee. Scooter’s Coffee has not verified or audited this information.

2022

Number of Participating Kiosk Stores: 275
Average Gross Sales: $876,519
Number and Percentage That Attained or Exceeded the Average: 131/48%
Median Gross Sales: $855,908
Lowest Gross Sales: $193,807
Highest Gross Sales: $1,763,134

2021

Number of Participating Kiosk 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 Kiosk 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

Number of Participating Kiosk Stores: 101
Average Gross Sales: $473,012
Number and Percentage That Attained or Exceeded the Average: 44/44%
Median Gross Sales: $453,470
Lowest Gross Sales: $129,969
Highest Gross Sales: $1,045,297

2018

Number of Participating Kiosk Stores: 84
Average Gross Sales: $429,289
Number and Percentage That Attained or Exceeded the Average: 42/50%
Median Gross Sales: $428,577
Lowest Gross Sales: $92,100
Highest Gross Sales: $989,614

2017

Number of Participating Kiosk Stores: 70
Average Gross Sales: $404,761
Number and Percentage That Attained or Exceeded the Average: 39/56%
Median Gross Sales: $426,610
Lowest Gross Sales: $73,217
Highest Gross Sales: $878,061

2016

Number of Participating Kiosk Stores: 51
Average Gross Sales: $397,895
Number and Percentage That Attained or Exceeded the Average: 28/55%
Median Gross Sales: $404,480
Lowest Gross Sales: $72,563
Highest Gross Sales: $881,732

2015

Number of Participating Kiosk Stores: 41
Average Gross Sales: $384,208
Number and Percentage That Attained or Exceeded the Average: 23/56%
Median Gross Sales: $396,639
Lowest Gross Sales: $79,793
Highest Gross Sales: $807,320

2014

Number of Participating Kiosk Stores: 37
Average Gross Sales: $327,341
Number and Percentage That Attained or Exceeded the Average: 18/49%
Median Gross Sales: $325,004
Lowest Gross Sales: $111,635
Highest Gross Sales: $626,438

Part 2 – Statement of Average Customer Ticket

This statement includes the average customer ticket for franchised Kiosk Stores that were open during the entire 12-month period ending December 31, 2022 (the “Measurement Period”) and that provided complete information Scooter’s Coffee requested respecting such costs.

There were 421 franchised Kiosk Stores open and operating as of December 31, 2022. The following charts are based on information for only 275 franchised Kiosk Stores that were open and operating during the entire Measurement Period for 2022 and that provided complete information (the Participating Kiosk Stores).

The information presented in this Part 2 is based on information for Participating Kiosk Stores. Scooter’s Coffee has not verified or audited this information.

2022

Average Customer Ticket: $9.11
Number and Percentage That Attained or Exceeded (or Did Better Than) the Average: 127/52%
Median: $9.07

2021

Average Customer Ticket: $8.56
Number and Percentage That Attained or Exceeded (or Did Better Than) the Average: 96/52%
Median: $8.56

2020

Average Customer Ticket: $7.98
Number and Percentage That Attained or Exceeded (or Did Better Than) the Average: 66/47%
Median: $7.95

2019

Average Customer Ticket: $7.19
Number and Percentage That Attained or Exceeded (or Did Better Than) the Average: 50/50%
Median: $7.18

2018

Average Customer Ticket: $6.56
Number and Percentage That Attained or Exceeded (or Did Better Than) the Average: 43/51%
Median: $6.56

Part 3 – Statement of Sales, Expenses, and Earnings

The following are statements of Sales, Expenses, and Earnings for Participating Kiosk Stores based upon reported results and actual and estimated expenses.

There were 421 franchised Kiosk Stores open and operating as of December 31, 2022. Of the franchised Kiosk Stores, 264 Kiosk Stores were open and operating during the entire 12-month period ending December 31, 2022 (the “Measurement Period”).

The following statement is based on information for the franchised Kiosk Stores that were open and operating during the entire Measurement Period and that provided complete information (the Participating Kiosk Stores). The remaining franchised Kiosk Stores open as of December 31, 2022 are not included in the statement below because they were not open during the entire Measurement Period or did not provide complete information requested.

The Gross Sales, Discounts, Cost of Goods Sold, Labor Costs, and Rental Expenses are based upon the reported results for the Participating Kiosk Stores during the Measurement Period. Scooter’s Coffee has not verified or audited this information.

Number of Stores: 264

Gross Sales: $885,335 (100.0%)

Less Discounts: $61,320 (6.9%)

Net Sales: $824,015 (93.1%)

Cost of Goods Sold: $269,910 (30.5%)

Gross Margin: $554,105 (62.6%)

Operating Expenses

Labor Costs: $224,761 (25.4%)
Rental Expense: $32,974 (3.7%)
Royalty: $65,921 (7.4%)
Card Processing: $23,019 (2.6%)
Overhead: $48,000 (5.4%)
Total Expenses: $394,675 (44.6%)

Earnings Before Depreciation, Interest, Taxes, and Debt Service: $159,430 (18.0%)

Gross Sales

Median: $862,935
High: $1,763,134
Low: $193,807
Number and Percentage That Attained or Exceeded the Average: 124/47%

Gross Margin

Median: $540,832
High: $1,096,257
Low: $121,137
Number and Percentage That Attained or Exceeded the Average: 125/47%

EBITDA

Median: $138,570
High: $551,757
Low: ($121,336)
Number and Percentage That Attained or Exceeded the Average: 116/44%

The term “Discounts” includes the face value of coupons, free or reduced drink promotions, gift card promotions, mobile app promotions, waste, and employee free drinks.

The term “Cost of Goods Sold” includes amounts for coffee beans, dairy, food items, syrups, tea, smoothies, cups, lids, paper products, and other direct products associated with serving food and beverage products.

The term “Net Sales” means sales of all services or products from or through your Store, including any sale of services or products made for cash and/or on credit, regardless of: (i) collection of charges for which credit is given, (ii) whether such sale is conducted in compliance with the Franchise Agreement, and (iii) whether such sale is at the Franchised Location or off-site, but exclusive of discounts. “Net Sales” also includes the fair market value of any services or products you receive in barter or exchange for your services and products.

The term “Gross Margin” means the Net Sales minus the Cost of Goods Sold.

The term “Labor Costs” includes wages for in-store employees including the manager and payroll taxes, but does not include employee benefits. Overhead employees are not included in the labor calculations above.

The term “Rental Expense” includes the total amount of payments to the franchisee’s landlord, including base rent, common area maintenance, real estate taxes, and insurance. During 2022, the range of monthly rent paid for Kiosks was $3,500 to $10,000.

“Royalty” also includes the 2% Marketing Contribution. The amount included in the table assumes that each Participating Kiosk Store will comply with the requirements in the Franchise Agreement.

The term “Card Processing” is the estimated cost of processing debit card, credit card, and gift card payments on Store sales. In Scooter’s Coffee’s experience, Card Processing costs an average of 2.6% of Gross Sales, and Scooter’s Coffee has used this figure in calculating the estimated Card Processing expenses in the above chart.

The term “Overhead” is the estimated costs of other expenses including business insurance, licenses, accounting fees, franchisor technology fees, banking fees, store supplies, service contracts, repairs, maintenance, uniforms, and other miscellaneous costs. In Scooter’s Coffee’s experience, Overhead expense is an average of $48,000 for Kiosk Stores, and it has used these figures in calculating the estimated Overhead expenses in the above chart.

The term “EBITDA” is the estimated earnings before deductions for payments and costs of borrowing to finance the Initial Fees in Item 5, Initial Investment in Item 7, and ongoing investments in the Store and before deductions for depreciation on the Initial Fees in Item 5, Initial Investment in Item 7, and ongoing investments in the Store.

Part 4 – Historic Same-Store Net Sales Growth

The same-store sales growth figures below compare the “Net Sales” (as defined below) earned by Participating Kiosk Stores over the course of a calendar year with the Net Sales earned by the same Stores during the prior calendar year.

“Net Sales” are measured by taking Gross Sales and subtracting customer discounts and refunds to customers.

Scooter’s Coffee used information from sales reports submitted by the Participating Kiosk Stores in calculating royalties, and data obtained from approved point-of-sale register systems.

Same-store sales for locations open for at least 13 months is measured each year. Over the last 7 years, Participating Kiosk Stores in the Scooter’s Coffee System has experienced same-store sales growth that breaks down as follows:

2021-2022

Franchised Same-Store Sales Growth Over Prior Year: +5.92%
Total Number of Open Franchised Kiosk Stores Whose Data Were Used: 185
Number and Percentage of Participating Kiosk Stores That Attained or Exceeded Average: 110/59.46%

2020-2021

Franchised Same-Store Sales Growth Over Prior Year: +23.83%
Total Number of Open Franchised Kiosk Stores Whose Data Were Used: 145
Number and Percentage of Participating Kiosk Stores That Attained or Exceeded Average: 75/51.72%

2019-2020

Franchised Same-Store Sales Growth Over Prior Year: +31.70%
Total Number of Open Franchised Kiosk Stores Whose Data Were Used: 102
Number and Percentage of Participating Kiosk Stores That Attained or Exceeded Average: 46/45.10%

2018-2019

Franchised Same-Store Sales Growth Over Prior Year: +11.87%
Total Number of Open Franchised Kiosk Stores Whose Data Were Used: 94
Number and Percentage of Participating Kiosk Stores That Attained or Exceeded Average: 50/53.19%

2017-2018

Franchised Same-Store Sales Growth Over Prior Year: +8.99%
Total Number of Open Franchised Kiosk Stores Whose Data Were Used: 81
Number and Percentage of Participating Kiosk Stores That Attained or Exceeded Average: 37/45.68%

2016-2017

Franchised Same-Store Sales Growth Over Prior Year: +4.69%
Total Number of Open Franchised Kiosk Stores Whose Data Were Used: 71
Number and Percentage of Participating Kiosk Stores That Attained or Exceeded Average: 32/45.07%

2015-2016

Franchised Same-Store Sales Growth Over Prior Year: +10.44%
Total Number of Open Franchised Kiosk Stores Whose Data Were Used: 52
Number and Percentage of Participating Kiosk Stores That Attained or Exceeded Average: 22/42.31%

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 that opened for operation in each of calendar years 2018 to 2022. For each year, Scooter’s only included franchised Kiosk Stores that remained open and operating as of December 31, 2022.

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

The information presented in this Part 5 is based on information franchised Kiosk Stores provided to Scooter’s Coffee. Scooter’s Coffee has not verified or audited this information.

2022

Total Number of New Kiosk Stores That Opened During the Calendar Year: 146
Average Gross Sales During the First Full Month of Operations: $88,240
Number and Percentage That Attained or Exceeded the Average: 73/50.0%
Median Gross Sales During the First Full Month of Operations: $87,760
Low Gross Sales During the First Full Month of Operations: $34,915
High Gross Sales During the First Full Month of Operations: $170,286

2021

Total Number of New Kiosk Stores That Opened During the Calendar Year: 90
Average Gross Sales During the First Full Month of Operations: $85,680
Number and Percentage That Attained or Exceeded the Average: 42/46.7%
Median Gross Sales During the First Full Month of Operations: $83,110
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 Kiosk Stores That Opened During the Calendar Year: 35
Average Gross Sales During the First Full Month of Operations: $65,880
Number and Percentage That Attained or Exceeded the Average: 20/57.1%
Median Gross Sales During the First Full Month of Operations: $65,536
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 Kiosk Stores That Opened During the Calendar Year: 33
Average Gross Sales During the First Full Month of Operations: $46,323
Number and Percentage That Attained or Exceeded the Average: 14/42.4%
Median Gross Sales During the First Full Month of Operations: $42,443
Low Gross Sales During the First Full Month of Operations: $18,462
High Gross Sales During the First Full Month of Operations: $111,917

2018

Total Number of New Kiosk Stores That Opened During the Calendar Year: 18
Average Gross Sales During the First Full Month of Operations: $35,331
Number and Percentage That Attained or Exceeded the Average: 13/72.2%
Median Gross Sales During the First Full Month of Operations: $34,962
Low Gross Sales During the First Full Month of Operations: $13,336
High Gross Sales During the First Full Month of Operations: $51,457

The table above excludes franchised Kiosk 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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Scooter’s Coffee Franchise: Average Sales ($876K) vs. Cost ($797K-$1.34M)

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Section I – Scooter’s Coffee Franchise Costs

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