What You Should Know Before Buying a Coffee Franchise

Many shrewd investors have been considering buying a coffee franchise as of late. The fact of the matter is that coffee consumption, especially specialty coffee, is on the rise. Consider this fact -- 49% of United States citizens drink over 4 cups of coffee each day. With that in mind, purchasing a coffee franchise can be a great way for you to cash in on this coffee drinking craze.

However, just because there is a demand doesn't mean you can purchase any old coffee franchise and start making a profit. For example, how are you planning to compete with the other coffee businesses in the area you plan on opening a franchise in? What competitive advantage due you offer to the marketplace? These things and more should be considered first, before making any investment.

Let's look a Starbucks as an example. If you were thinking about buying a coffee franchise that was similar Starbucks, and placing it next to Starbucks, you would probably end up losing a lot of money. The fact is a business similar to Starburst cannot compete with Starbucks. But let's look at another example.

Say the Starbucks you're going to locate next to didn't have a drive-through. Your business, is only a drive-through. In fact, most people are in and out under a minute, and they pay half as much for a cup of coffee. Now, you and Starbucks can coexist and still both make a lot of money. That is because you offer different advantages to different crowds.

Before buying a coffee franchise, it's a must to consider location, competition, marketing, and the business plan of the franchise. However, there is more to it.

A franchise is only as good as the franchisor you're purchasing it from. A good business plan can go sour under a poor franchise agreement. You have to deal with a reputable franchisor who offers you training and support, as well as not bleed you drive in the negotiation process.

It is important you only purchase a coffee franchise from a franchisor you trust and believe to be credible. The best test you can do in this regard, is not to ask the coffee franchise itself, but some of his customers. Go to business owners who purchase franchises from the franchisor and asked their opinion. This is the closest you're going to get to the truth.

Finally, you have to familiarize yourself with the different options that are available, when buying a coffee franchise. Besides the walk-in coffee shops, there are also coffee kiosks and coffee drive thru businesses. Make sure you are aware of the different specialty coffee shops that are available to purchase through franchises.

There you have it -- some simple facts you must consider first before buying a coffee franchise. If you do the necessary research, you should find yourself making a sound investment in one of the hottest and growing industries on the planet!