Starbucks Franchise in 2024 – Is Starbucks a franchise?

Starbucks doesn’t offer traditional franchises but operates through licensing agreements. This model allows partners to run Starbucks locations while maintaining strict brand standards. Opening a licensed store requires a significant investment, often over $300,000, and strong business experience.

Starbucks supports licensees with comprehensive training and marketing. This strategy has helped Starbucks expand globally, with over 50% of its international stores being licensed.

Licensing vs. Franchising: What’s the Difference?

Starbucks uses a licensing model, not franchising. Licensed stores are operated by others but owned by Starbucks, ensuring strict control over the brand and customer experience. Licensees get support like store design and product offerings but lack full ownership.

About 49% of Starbucks locations are licensed, typically in high-traffic places like airports, hotels, and universities. However, Starbucks usually partners with established businesses, not individuals.

Read More about Starbucks’s Drinks menu:

• Starbucks Iced Chai Latte
• Starbucks Pumpkin Spice Latte
• Starbucks White Chocolate Mocha
• Starbucks Iced Pumpkin Cream Chai
• Starbucks Pumpkin Cream Cold Brew

How to Become a Starbucks Franchisee: A Step-by-Step Guide

Step 1: Research & Plan

• Market Research: Assess demand and competition in your location. Star Brands Consulting can help build your business case.
• Financial Planning: Estimate investment from $500,000 to $1.5 million.
• Compliance: Meet local regulations and permits (Cost: $2,000 – $5,000).

Step 2: How to Apply

• Contact Starbucks: Express interest with help from Star Brands Consulting.
• Franchise Proposal: Submit a business plan and financial projections.

Step 3: Finalize Agreement

• Negotiate Terms: Discuss fees and terms (Franchise fee: $50,000 – $100,000).
• Legal Review: Consult a lawyer for clarity on obligations.

Step 4: Setup

• Location & Design: Choose a location and align store design (Cost: $50,000 – $200,000).
• Inventory: Stock your store (Cost: $200,000 – $500,000).

Step 5: Training & Support

• Training: Participate in Starbucks’ training for management and service.
• Operational Support: Utilize Starbucks’ ongoing marketing and support.

Step 6: Launch & Market

• Grand Opening: Plan an event to attract customers (Cost: $10,000 – $30,000).
• Marketing: Promote with local ads and social media (Cost: $10,000 – $30,000).

Step 7: Manage & Grow

• Monitor Performance: Track sales and customer satisfaction.
• Improve Operations: Continuously enhance profitability.

How much does a Starbucks franchise cost?

Starbucks doesn’t offer traditional franchises but operates through licensing agreements. The cost to open a licensed Starbucks ranges from $315,000 to $1 million, depending on location and store size. You’ll need at least $700,000 in liquid assets to cover startup costs and maintain operations.

Ongoing fees include royalty payments (6-8% of sales) and marketing contributions. Despite the high investment, licensed Starbucks stores can generate over $1.2 million in annual sales, making it a lucrative opportunity.

Starbucks Revenue & Gross Sales

In 2024, the average gross sales for U.S. Starbucks locations were estimated at $1,350,000, slightly down from the previous year. Despite strong overall sales, this decline suggests a broader trend of reduced consumer spending across the U.S.

Starbucks Franchise Annual Report 2024

Here’s an estimated investment breakdown for opening a Starbucks, based on typical franchise costs (Note: Starbucks doesn’t franchise in the U.S., so these are hypothetical estimates):

Type of Expenditure	Minimum Investment	Maximum Investment
License Fee (estimate)	$315,000	$315,000
Real Estate & Leasehold Improvements	$200,000	$1,200,000
Furniture, Fixtures, & Equipment	$100,000	$400,000
Initial Inventory	$20,000	$40,000
Signage	$10,000	$25,000
Training Expenses	$20,000	$30,000
Point-of-Sale System	$10,000	$20,000
Licenses and Permits	$5,000	$15,000
Insurance	$5,000	$15,000
Initial Marketing	$10,000	$20,000
Miscellaneous Opening Costs	$5,000	$15,000
Working Capital (3 months)	$50,000	$150,000
Additional Funds	$10,000	$30,000
Total	$760,000	$2,275,000

Financial Requirements

Financial Requirement	Amount
Required Capital	$485,000 – $2,050,000
Liquid Assets	At least $500,000
Net Worth	Minimum $1,000,000

Pros & Cons

Pros	Cons
Strong Brand: Starbucks’ global brand draws in a loyal, high-traffic customer base.	High Costs: Requires significant capital, with $700,000+ in liquid assets and $315,000 fee.
Proven Model: Starbucks offers a tested business model with comprehensive support and training.	Limited Control: Starbucks retains strict oversight, limiting franchisee autonomy.
High Revenue Potential: Licensed stores can earn up to $200,000 annually in profits.	No Financial Aid: Starbucks doesn’t offer financial assistance for new licensees.
Continuous Innovation: Frequent product updates and support from Starbucks keep offerings fresh.	No Exclusive Territory: Franchisees may face competition from nearby Starbucks locations.

Frequently Asked Questions