The world is obsessed with coffee – that is a fact.
Globally, coffee is one of the most consumed beverages among the population: in 2020/2021 an estimated 166.63 million 60kg bags of coffee were consumed worldwide according to data release from Statista. According to the Statista report, this number was an increase from the 164 million bags of coffee that were consumed the previous year. Not only that, findings from the British Coffee Association show that nearly two billion cups of coffee are consumed worldwide on a daily basis.
With figures like that, it is no surprise that many entrepreneurs and investors have sunken their teeth into the ever-prosperous coffee industry.
Due to the sheer size of the region, Europe is a prime location for coffee franchise opportunities.
Based on data from CBI, Europe accounted for one-third of the world’s coffee consumption in 2019, making it the largest market for coffee. Although Covid-19 had an immediate effect on where people consumed coffee e.g., lockdowns meant that cafes were shut in many countries so people consumed coffee made from their homes, the global demand for coffee continues to grow in a post-lockdown economy. In a Mordor Intelligence Coffee Industry report, it was predicted that the global market is still expected to grow at a yearly rate of 5.5% until 2025.
Interesting coffee facts & figures:
The thought of becoming an independent business owner is an exciting prospect for many potential investors but there is an inherent risk in running your own independent company.
More than 50% of independent businesses go under within two years of opening due to unstable markets and poor financial returns. However, when it comes to franchising, there is significantly less risk to opening a franchised unit than running your own independent outlet.
Even during tough economic climates, the majority of franchises are more likely to withstand the hardship as they are already part of an established market brand. Throughout 2020 and early 2021, many franchises reported that they experienced record numbers of enquiries about franchising, even in the face of the Covid-19 pandemic and extended lockdowns across different countries.
Of the main benefits of franchising is the knowledge that you are stepping into an already successful business model. The hard work has been done by the parent company: the market research, securing funding, testing the product/s, opening the first store, building a loyal customer base and making a profit. As a franchisee, your job is to build on the thriving roadmap that was set out for you by the original franchise.
The fears about ‘going it alone’ do not exist when you invest in a franchise as the franchisee has a wealth of resources at their fingertips when they open their new unit. The parent company is on hand to offer advice and support whenever needed, and the franchisee has the option to dip into a well of knowledge and guidance throughout their franchise journey. Additionally, the vast majority of franchises provide full training to all new franchisees to help them prepare for business ownership.
On the financial side of franchising, banks tend to look favorably on entrepreneurs who are seeking a franchise loan as they know there is less risk in a franchise investment compared to a small business investment. A large number of franchises will also offer financial support to new franchisees, either directly themselves or through a third-party.
Some of the most recognisable global franchises are coffee franchises: Starbucks, Costa Coffee, Dunkin Donuts, Tim Hortons, and McCafé to name a few. Starbucks is the largest coffee chain and has than more than 300,000 stores worldwide. Within Europe, Costa Coffee is the most popular coffee franchise, with more than 3,000 units spread out across the region.
Coffee franchises are an attractive investment option for budding entrepreneurs as they are a solid and safe business bet. With a guaranteed customer base regardless of where the franchise is set up, the business is already on track for high return on investment in the form of profitability.
Due to the flexible nature of a coffee business, there are countless franchise models that an investor can choose from. All across Europe and the world, business owners have opened up traditional coffee stores and cafes to the delight of customers who can appreciate a tried-and-tested late or flat white or the novelty of a festive Frappuccino. Along with the appeal of the beverage, franchisors also get the chance to pair the drink with delicious treats such baked goods and snack food which means that not only can you draw customers with the coffee menu, you can also increase revenue by expanding your menu.
In recent years, there has also been in an increase in mobile coffee franchises. Not wanting to constrain themselves to just one store, many franchisors have expanded in coffee delivery van franchises and coffee kiosks to serve a diverse range of customers.
Franchises such as Coffee-Bike have jumped on the mobile franchise train and are reaping the rewards of that choice.
With so many business models available on the market, a coffee franchise is not an opportunity to be missed.
Starting a coffee franchise may seem like a daunting prospect but at Franchise Direct Europe, we are here every step of the way to help you on your franchise journey.