StacyColeDesigns/Starbucks

For quite some time, my heart has been focused and set on opening a Starbucks in my neighborhood Springfield Gardens, located in Queens, New York. The area is being revamp beautifully. And with the heavy amount traffic, due to multiple small and large businesses, (i.e. schools, grocery stores, pharmacies, post offices, precincts, strip malls, medical facilities, gas stations, day care centers, law offices, mechanic shops, fast food restaurants and parks (including "Roy Wilkins Park") and etc...) located on Merrick Boulevard, a Starbucks being placed in the center of the on going traffic will generate a great amount of capital.

With the rise fo coffee lovers and coffee shop attendees, Starbucks will definitely be a staple in my community. It will bring happiness to those who don't have to travel 30 minutes away to enjoy a great cup of coffee from Starbucks. It will bring togetherness amongst those that has never spoken to each other before. And having a Starbucks in Spingfield Gardens location will finally give coffee lovers a place to relax, read a book, get work done, enjoy the company of others or just give people a chance to get out of the house and enjoy the day. 

In my neighborhood, Springfield Gardens Queens, located in New York, there are 2 coffee/convenient stores (Dunkin Donuts and 7 Eleven), which are 5 minutes aways from each other. They are both great for grabbing a quick cup of coffee, a snack, a lottery ticket and then leaving to conquer daily tasks. They both do not capture the great and memorable experiences that a Starbucks would. 

When entering the doors of Starbucks, a feeling of warmth embraces you and all troubles and worries are left outside. With the mesmerizing scenery and taste of a fresh brewed cup of coffee and great hospitality, first time customers will become repeat customers and repeat customers will be "forever" customers. The atmosphere is welcoming to all. It is a family friendly establishment with products for everyone of all ages to enjoy. 

More than 50% of U.S. citizens aged 18 and above take coffee on a daily basis. Enjoying a cup of coffee in the comfort of your home always feels great. However, there is something that makes visiting Starbucks coffee shops a memorable experience.

This sounds rather obvious, but what some coffee shops have to offer can leave a bitter taste in your mouth. The type of coffee beans a shop uses goes a long way in determining the end result. Production of good coffee calls for fresh roasting and grinding. All these should go hand in hand with proper brewing knowledge. It’s possible to get a remarkable latte or espresso from a generic coffee machine. But serious coffee shops like Starbucks know the importance of investing in state of the art equipment. Quality equipment grinds coffee beans consistently to give you an exquisite cup of coffee. Being that Starbucks is such a great coffee shops, their coffee equipment has the capacity to handle big volumes.

Most people have a favorite snack or pastry that blends perfectly with their coffee. If washing down a slice of banana nut bread  with a cup of coffee is your preference, then Starbuck food menu is the best. Successful coffee shops don’t mind sourcing artisanal sandwiches and baked goods from local bakeries.  For the sake of their clients, Starbucks has a great food menu, which is consistently growing.

The number of clients that visit a given coffee shop can help tell if it is successful or not. Save for off-hours such as closing time, there needs to be a stream of people walking in and out. Whether professionals or students, such kind of traffic tells you that the coffee is so great that clients keep coming back. Starbucks is one coffee shop that people do not avoid.

In an effort to make a great impression, Starbucks always offer a comfortable and welcoming setting. It is extremely rare to see witness a dirty and messy establishment. When a coffee shops do not take cleanliness seriously, clients will go elsewhere. And it is very rare that guests have walked out of a Starbucks, due to the shop and bathroom not being clean. Cleanliness is a must for guests. If the shop lacks cleanliness, then some guests will prefer leaving immediately after purchasing their coffee. But on the other hand... If the shop is in impeccable shape, then those coffee lovers will stick around and enjoy their coffee. Especially if the coffee shop has spacious tables, comfortable chairs and plenty of natural lighting. The area must not seem crowded. Guests enjoy having their personal space.

This location will always be busy, not only because of the perfect location , but because of the staff. The guests will always want to stop by for a warm greeting and tasty drink.

The staff will always offer friendly and welcoming service with a smile, while creating the guests signature cup of coffee or specialty drink. The guests will always feel welcomed to stay and enjoy their drink and sandwich or snack in the clean and comfortable establishment. 

A barista’s work is not solely making coffee. Questions about coffee tend to cross the mind in the course of preparation. Instead of leaving the coffee shop with more questions than answers, a good barista will address all your queries. Should you have no idea about coffee beans, for example, the barista should enlighten the guests about them. The barista can even help pinpoint the best coffee for the guest, especially if it’s your first time at a Starbuck's coffee shop.

There are times when we might crave coffee but lack the time to visit a Starbucks. Starbucks will allow you to order coffee online  and via the Starbucks App, which is super convenient for your "Grab and Go Cup of Joe". Now that we are in the digital age, Wi-Fi at Starbucks adds a tad more convenience for guests as well. Having a steady and strong internet connection goes hand in hand with electrical outlets should your device run low on charge.

Queuing for a couple of minutes is a small price to pay when buying tasty coffee. However, waiting in line for extended periods of time is annoying. A coffee shop that serves you quality coffee in the shortest time possible is simply the best. And Starbucks has perfected created a great cup of coffee, without the long wait.

Starbucks will allow us to offer customers more than the great coffee and handcrafted beverages they love. Starbucks will provide a custom store design to choose from, as well as robust ongoing support. Starbucks Licensed Stores will allow us to immerse every customer in the full coffeehouse experience they cherish and seek out.

Customers will be delighted with the original store design, popular seasonal promotions and handcrafted beverages.

The advantage of licensing a Starbucks include:  

We cannot be totally creative on the design. We would still need to have our outlet based on one of the 18 design studios that Starbucks will provide. Which is still better than the uniformed look that we would have received from other business franchises.

We will also get an exclusive food menu and whole beans, which is apart of Starbuck's exclusive bakery program. Not only do we get the signature drinks from Starbucks, but we will also have access to their menu. All those croissants, cheesecakes, buns, cookies, and tarts, will be in our coffee shop. We will also get the Starbucks beans, so we don’t have to worry about where to get our supply of coffee to sell.

The great thing is that Starbucks won’t  leave us right after we’ve put up an outlet. All the concerns that we will have, will be answered with consultations and support. 

We may wonder how will we know which coffee machine is the best one to use or what other equipment we’ll need when we license a Starbucks store. Great thing is, we don't have to worry about that because Starbucks will be providing us with the equipment they’ve already approved for use. This will help maintain consistency of our store, which will be the same as the other coffee shops operated under this umbrella.

Starbucks is known for giving customers the ultimate coffeehouse experience. Starbucks is one of the most popular and recognized brands in the coffee industry. The coffee shop chain has 10,000 stores worldwide with approximately 4,400 of them as licensed shops. Starbucks franchises are available overseas in countries excluding the United States and Canada. If we would like to open a Starbucks in the US or Canada, we may do so as a licensee only. As a licensee, we would pay a license fee to use the Starbucks brand. Starbucks does this so the company can have more control over stores and quality of the product. A license arrangement is generally easier and cheaper to set up than a franchise concept. Ongoing management is also less demanding. Company-operated stores generally have a higher gross margin and lower operating margin than licensed stores. Under the licensed model, Starbucks receives a certain margin on branded products and supplies sold along with royalty on retail sales in the store.

The gross profit margin for a cup of coffee is around 70 to 80%. This is a great profit margin. However, the price for a cup of coffee is usually not high which makes it necessary to sell a large volume of cups in order to have a profitable business overall. "On average, anywhere between $3.43 and $4.43." If you're ordering a tall drink it's costing you, on average, $3.34 daily, $1,221 annually and $6,105 over 5 years! A grande drink? $4.10 daily, $1,459 annually and $7,295 over 5 years.

Franchises and licenses are both business agreements in which certain brand aspects are shared in exchange for a fee. However, a franchising agreement pertains to a business's entire brand and operations, while a licensing agreement only applies to registered trademarks.

However, Starbucks is not a franchise so therefore we may not outright own one. But we can open a Starbucks as a licensor. Starbucks prefers licensing to keep control over the stores and the product's quality. As a licensee, you would rent the Starbucks brand for a licensing fee and would not own the store as a franchise owner would. A licensed Starbucks is roughly around $315,000. You’ll also need $700,000 in liquid assets to be considered for this opportunity.

Keep in mind even though we will not be a franchisee, the investment is at a similar level to comparable concepts like McDonald’s as an example that requires $1 – $2.2. million on average to join the franchise.

A great question to ask is... "Why do entrepreneurs still decide to invest in a Starbuck licensed store if they aren’t even the owner?" The answer is... "You can still make money leveraging the likeness, menu, and 70 million strong customer base of the global brand." "If we’re able to find a location in or near an airport or shopping mall, then we can leverage the brand recognition to sell a lot of cups of coffee."

Starbucks’ average sales for the past five years is $23.69 billion annually. This is why they’re the king of all coffee shops. Although they had a dip in sales in the year 2020 due to the pandemic, their stats for the past five years show how their sales were continually growing. Starbuck's expect this growth trend to continue as the company expands deeper into large international markets like China.

One catalyst for their growth is the mobile app that now accounts for a staggering 24% of sales in the United States. This percentage of company increased from only 3% in 2016. The mobile app allows customers to get rewards when  drinks and/or food are ordered through the app. These rewards, or stars as they are called inside the app, can be exchanged for free menu items similar to a loyalty punch-card program.

 

Looking for investors that are ready to making great things happen!


Regards,