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The Coffee Bean & Tea Leaf Franchise ProfileCoffee Franchises > Specialty Coffee Retailers |
What Are the Initial Investment Requirements for The Coffee Bean & Tea Leaf Franchise?
To start a franchise with The Coffee Bean & Tea Leaf, you should be prepared for a total initial investment ranging from $173,250 to $615,500. This includes a franchise fee of $25,000. Additionally, you’ll need to demonstrate a cash requirement of $294,000 to $615,500 and a net worth between $50,000 and $75,000. Understanding these financial commitments is crucial before diving into the franchise world.
What Are the Ongoing Fees and Financial Performance Metrics for The Coffee Bean & Tea Leaf Franchise?
The Coffee Bean & Tea Leaf franchise requires a royalty fee of 5.5% on gross sales and a marketing fee of 2%. The average annual revenue per unit is approximately $926,248, with a median of $862,644. Franchisees can expect a breakeven time of about 12 months and an investment payback period of around 14 months, making it essential to plan for these ongoing financial obligations and performance expectations.
What Are the Average Expenses Incurred by The Coffee Bean & Tea Leaf Franchisees?
Franchisees can anticipate various operating expenses, including a lease for the store averaging $36,000 annually, utilities at $12,000, and employee salaries around $90,000. Other costs include insurance, professional fees, training expenses, and marketing, bringing the total annual running expenses to approximately $173,250. Being aware of these expenses will help you manage your finances effectively.
How Has The Coffee Bean & Tea Leaf Franchise Grown Over Recent Years?
The Coffee Bean & Tea Leaf has seen fluctuations in its franchise and corporate unit counts over the years. In 2019, there were 47 franchised units, decreasing to 41 in 2020 and further to 36 in 2021. Conversely, corporate units dropped from 183 in 2019 to 114 in 2021. This trend indicates a need for potential franchisees to evaluate the brand's market presence and growth strategy as they consider their investment.
The Coffee Bean & Tea Leaf Franchise Financial Requirements
Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.
The minimum total assets (minus liabilities) you must possess.
Net Worth Required:
The estimated period to recoup your total investment.
Investment Payback:
The initial fee paid to join the franchise system.
Franchise Fee:
Ongoing percentage of revenue paid to the franchisor.
Royalty Fee:
Regular contribution toward the franchise’s advertising fund.
Marketing Fee:
The estimated timeframe to recover your initial costs.
Breakeven Time:
The total amount required to launch the franchise.
Initial Investment:
The minimum liquid capital you must have on hand.
Cash Required:
The typical yearly revenue generated per franchise location.
Average Revenue:
The middle value of yearly revenue among franchise locations.
Median Revenue:
The largest reported annual revenue among franchisees.
Highest Revenue:
The smallest reported annual revenue among franchisees.
Lowest Revenue:
A broad sector defining similar types of franchise businesses.
Industry:
A more specific division within the broader industry.
Category:
The key individuals guiding the franchise’s strategy and growth.
Leadership:
The official business address of the franchisor’s headquarters.
Corporate Address:
Available financing options to help start the franchise.
Funding Year:
The main organization that owns the franchise brand.
Parent Company:
The Coffee Bean & Tea Leaf Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2019 | 2020 | 2021 |
|---|---|---|---|
| Total Units | 230 | 217 | 150 |
| Net Change YoY | -13 | -67 | |
| Franchised Units | 47 | 41 | 36 |
| Net Change YoY | -6 | -5 | |
| Corporate Units | 183 | 176 | 114 |
| Net Change YoY | -7 | -62 |
Initial Investment
The Coffee Bean & Tea Leaf franchise requires an initial investment ranging from $173,250 to $615,500. This investment covers the franchise fee, equipment, inventory, and other startup costs. A cash reserve of $294,000 to $615,500 is recommended to ensure adequate funding during the initial phase of operation.
Franchise Fee
The initial franchise fee for The Coffee Bean & Tea Leaf is set at $25,000. This fee grants franchisees the right to operate under the brand's name and access its established business model, training programs, and ongoing support.
Ongoing Fees
Franchisees are required to pay a royalty fee of 5.5% of gross sales, alongside a marketing fee of 2%. These fees contribute to the brand’s overall marketing strategy and support franchisee operations, ensuring continuous brand visibility and growth.
Revenue Potential
Franchisees can expect an average annual revenue of approximately $926,248 per unit, with a median of $862,644. The revenue can vary significantly, with the lowest reported annual revenue at $91,109 and the highest reaching $2,690,253, indicating strong potential for profitability.
Breakeven and Payback
The Coffee Bean & Tea Leaf franchise has a breakeven time of around 12 months, allowing franchisees to recover their initial investment relatively quickly. The investment payback period is estimated at 14 months, making it an appealing option for aspiring entrepreneurs.
Franchise Growth
The franchise has experienced fluctuations in growth, with 47 franchised units in 2019, decreasing to 36 by 2021. In contrast, corporate units have also declined from 183 in 2019 to 114 in 2021. This trend highlights the challenges and opportunities within the franchise landscape, necessitating strategic planning for potential franchisees.
Frequently Asked Questions
The initial investment for a Coffee Bean & Tea Leaf franchise ranges from $173,250 to $615,500, which includes the franchise fee and other startup costs.