Scooter’s Coffee is an American chain of coffee stores specializing in quick service of espresso drinks, smoothies, and baked goods founded in 1998 and has grown to about 250 stores in the United States. Boundless Enterprises, a Nebraska-based LLC, serves as the parent company for Scooter’s. The parent company also owns two affiliate companies – Harvest Roasting and Boundless Operations.
Scooter’s Coffee offers two types of franchises: a Drive-Thru Kiosk ( the “Kiosk”) and a Drive-Thru Coffeehouse (the “Coffeehouse”). Kiosk stores are smaller and sales originate from drive-thru customers; these stores have no carry-out or in-store seating options. On the other hand, Coffeehouses offer inside seating as well as drive-thru options for customers.
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00:35 Quick Service Restaurant Industry
01:28 Scooter´s Coffee Franchises
01:47 Franchise Midpoint Investment
02:21 Franchise Fees
02:31 How much does a Scooter´s Coffee Franchise Owner make?
03:04 Time to Recoup Initial Capital Investment
04:09 Average Sales
Donald Eckles co-founded the Scooters business and has served in senior leadership ever since. He currently serves as Chairman.
Stepping into the beverage industry – and more specifically the quick service coffee industry – can be a daunting task, considering the significant start-up costs and the increasingly competitive nature of the industry. This article will break down the Financial Disclosure Document for Scooter’s Coffee and provide all the information that prospective franchisees should know before making an investment decision.
The quick-service coffee industry is well-established and highly competitive in America. Scooter’s expects its franchises to compete with nationally established chain stores, such as Starbucks, Peet’s Coffee, and Dunkin Donuts, as well as local stores and independent restaurants.
The estimated total initial investment for a Scooter’s Franchise depends on the store type. A kiosk may cost anywhere in the range of $512,400 to $890,600 while a coffeehouse may set you back anywhere from $375,300 to $1,046,000. Potential franchisees who intend to open multiple Scooter’s stores will be charged a nonrefundable $5,000 Development Fee for each additional store opened.
A full breakdown of the costs is shown below. Note that regardless of the type of store, an initial franchise fee and opening support fee totaling $50,000 is due at signing. Much of the variation in costs comes from Free Standing Building and Leasehold Improvements, which are costs associated with remodeling an existing retail space to meet the square footage and location requirements of Scooter’s Franchises.
Certain requirements must be met in order to own a Scooter’s Franchise.
The Scooter’s Franchise must be operated in compliance with the Franchise Agreement. Scooter’s will provide an Operations Manual that will contain standards that must be followed. These standards include what proprietary items may be sold and restrictions on store build-out, computer software, and supplier and product approval.
Additionally, Scooter’s requires new franchisees to participate in two training sessions, both based in Omaha, Nebraska. The 3-day Immersion Training workshop occurs between 90 and 120 days of signing the Franchise Agreement and discusses the business management principles of owning a franchise. The 4-week Operations Training workshop must be completed 6 to 8 weeks before store opening and details the day-to-day practice of running a store. A full breakdown of the training programs, broken down by hours of training, is shown below.
The main fees associated with owning a Scooter’s franchise are as follows:
A 6% royalty fee for all gross sales accrued per reporting period, and
A 2% marketing fee.
While the royalty fee is higher than the food and beverage industry average of 5.3%, Scooter’s 2% marketing fee is slightly lower than the industry average of 2.3%.
Additional minor fees, such as Local and Regional Marketing Cooperatives, Technology Fees, and Insurance Premiums, vary depending on location and circumstances.
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