Spilling the Beans on a Coffee Franchise Business

October 11, 2008

Demand is the name of the game! Coffee consumption as a whole has increased dramatically within the last 10 years. Specialty coffee is now common almost everywhere, whereas a few decades ago it was only found in the most chic of places.

About five years ago, many savvy investors stood up and started taking notice of the opportunities presented by coffee franchise businesses. A lot of them got into an opportunity and made a lot of money. Think about it - half of the adults in the United States currently consume, on average, 4 cups of coffee each day.

The fact is, those who consume that coffee have a variety of different requirements that need to be met before they will purchase coffee from you. Some only prefer to brew the coffee themselves at home, but they will purchase coffee beans from you. Others want a quick fix that they can grab on their way to work. For them, convenience is preferred over quality.

Others still want the experience that comes with getting coffee. Think of Starbucks in this instance. That is why Starbucks can charge three or four times as much for what basically is the same coffee as another competitor and get away with it.

The point is that there are a lot of different reasons why people will consume coffee. And of course there are a lot of different coffee franchise businesses that go after these different market segments. So its important when looking at these franchise businesses to find one that will give you a competitive advantage in your marketplace.

Whats a competitive advantage? Basically, its what can you offer to the coffee drinker that they want and cant get anywhere else?

The answer to this will depend upon the area in which you plan on putting the coffee franchise business in. For example, if youre in an area that is already saturated with specialty coffee stores then another one probably wont work. See how it fails the question asked above?

However, in a place where there are only specialty coffee shops, a drive-through coffee shop that stresses speed first may just have what it takes to make it - even directly across from four other slow environment rich coffee shops.

Its important when evaluating different businesses to keep an eye on the target audience that they go after. When you have determined what markets are hot and exploitable in your area then look for a coffee franchise business that target those people. That is your best bet when investing in any franchise.

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