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Espresso Americano Franchise Review (2024)
Written by: Patrick Findaro
Last Updated by
María Fernández Amato: January 30, 2024
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Espresso Americano is a coffee franchise that’s committed to serving only the best coffee, complying with the strictest quality standards. Espresso Americano is a vertically integrated company, ensuring the necessary controls during the complete coffee processing steps, from bean to cup.
Contents
Their served beverages are of the highest quality. They offer an extensive menu of hot and cold drinks, including our patented frozen Coffee Granita. They also offer a wide variety of pastries and gourmet snacks to satisfy everyone’s taste.
Espresso Americano provides an excellent customer service in a relaxed environment to make each visit a unique and enjoyable experience for their customers. All this contributes to make Espresso Americano one of the best cup of coffee served in the region, cup after cup, in any of their locations.
Management Team
Established in 1994, Espresso Americano is a family-owned company from Honduras. It opened its first store in the downtown historic district of Tegucigalpa, with a small roaster serving the best coffee in Honduras. This revolutionized the coffee retail business, selling personalized beverages in a specialty coffee shop. They entered the U.S. market in 2014 in the Denver, Colorado area, where the U.S. management team is located.
The Kafati family has large coffee and agricultural farms in Honduras, from which much of the coffee is supplied from, ensuring quality control
Today, they have in operation more than 195 stores in over 25 cities spanning four countries, including Honduras, Nicaragua, Panama, and the U.S. with plans to continue expanding in additional markets
Franchise Food Services Industry Analysis
Franchise Strengths
- Operating in the “specialty coffee” segment with a superior taste to Starbucks
- Coffee franchise with high brand recognition in Latin America that is leveraging its quality coffee position in the U.S.
- Offers a superior specialty coffee product that a large and broad range of consumers “need” on a daily basis
- Appeals to a large portion of the population
- Operationally simple and flexible to the desires of their franchisees
Franchise Weaknesses
- Location and site selection are quite important in dictating the success of the business
- Margins have the potential to be eroded due to changes in price of ingredients and / or increase in labor costs
- Establishing its brand in the U.S. as it adjusts to the American market
Franchise Opportunities
- Brand awareness still has room to grow as additional units open across the US
- Huge, growing market – in 2015 alone U.S. consumers spent over $74bn on coffee
- Specialty coffee is a segment within the industry that is expected to continue gaining share of the market. Demand is supposed to grow 16% by 2020, reaching $26.7bn in total industry revenue
Franchise Threats
- Operating in a large, competitive market where consumers could change where they get their coffee if they perceive a drop in value
- Profits can be negatively impacted due to the close proximity of a similar competitor
- Potential for consumers to make coffee at home
How much is an Espresso Americano Franchise?
Espresso Americano Franchise cost ranges from $234,525 to $410,400 according to the 2017 FDD.
Café with Drive-Thru Unit
| Item | Estimated Amount (in USD) | When Due | To Whom Payment is to Be Made | |
| Low | High | |||
| Initial Franchise Fee | $30.000 | $30.000 | When you sign the Franchise Agreement | Franchisor |
| Real Estate Lease (Rent and Security Deposit) | 625 | 19.500 | Before Beginning Operations | Landlord |
| Utility Deposits | 0 | 3.500 | Before Beginning Operations | Utilities |
| Leasehold Improvements | 30.000 | 40.000 | Before Beginning Operations | Outside Suppliers |
| Insurance | 1.500 | 4.000 | Before Beginning Operations | Insurance Company |
| Equipment, Furniture, and Fixtures | 112.000 | 190.000 | Before Beginning Operations | Approved Supplieris, Outside Suppliers |
| Training Expenses | 2.500 | 5.000 | During Training | Airlines, Hotels, and Restaurants |
| Initial Inventory | 5.000 | 10.000 | Before Beginning Operations | Franchisor, Affiliate, Approved Suppliers, Suppliers |
| Office Equipment and Supplies | 2.000 | 7.000 | Before Beginning Operations | Approved Suppliers, Suppliers |
| Computers & Software | 5.400 | 6.400 | Before Beginning Operations | Approved Suppliers, Suppliers |
| Signage | 10.000 | 12.000 | Before Beginning Operations | Approved Suppliers |
| Grand Opening Fee | 7.000 | 10.000 | First 3 months of operation | Advertising Suppliers |
| Licenses and Permits | 500 | 2.000 | Before Beginning Operations | Licensing Authorities |
| Legal and Accounting | 3.000 | 10.000 | Before Beginning Operations | Attorney, Accountant |
| Dues and Subscriptions | 0 | 1.000 | Before Beginning Operations | Approved Supplieris, Suppliers |
| Additional Funds- 3 months working capital | 25.000 | 60.000 | First 3 months of operation | Landlord, utilities, providors, suppliers, and other operating expenses |
| TOTAL | $234,525 | $410,400 | ||
Kiosk Unit
| Item | Estimated Amount (in USD) | When Due | To Whom Payment is to Be Made | |
| Low | High | |||
| Initial Franchise Fee | $30.000 | $30.000 | When you sign the Franchise Agreement | Franchisor |
| Real Estate Lease (Rent and Security Deposit) | 188 | 3.750 | Before Beginning Operations | Landlord |
| Utility Deposits | 0 | 3.500 | Before Beginning Operations | Utilities |
| Leasehold Improvements | 7.000 | 15.000 | Before Beginning Operations | Outside Suppliers |
| Insurance | 1.500 | 4.000 | Before Beginning Operations | Insurance Company |
| Equipment, Furniture, and Fixtures | 20.000 | 77.000 | Before Beginning Operations | Approved Supplieris, Outside Suppliers |
| Training Expenses | 2.500 | 5.000 | During Training | Airlines, Hotels, and Restaurants |
| Initial Inventory | 5.000 | 10.000 | Before Beginning Operations | Franchisor, Affiliate, Approved Suppliers, Suppliers |
| Office Equipment and Supplies | 2.000 | 7.000 | Before Beginning Operations | Approved Suppliers, Suppliers |
| Computers & Software | 4.700 | 6.000 | Before Beginning Operations | Approved Suppliers, Suppliers |
| Signage | 5.000 | 8.000 | Before Beginning Operations | Approved Suppliers |
| Grand Opening Fee | 7.000 | 10.000 | First 3 months of operation | Advertising Suppliers |
| Licenses and Permits | 500 | 2.000 | Before Beginning Operations | Licensing Authorities |
| Legal and Accounting | 3.000 | 10.000 | Before Beginning Operations | Attorney, Accountant |
| Dues and Subscriptions | 0 | 1.000 | Before Beginning Operations | Approved Supplieris, Suppliers |
| Additional Funds- 3 months working capital | 10.000 | 30.000 | First 3 months of operation | Landlord, utilities, providors, suppliers, and other operating expenses |
| TOTAL | $98.388 | $222.250 | ||
| Royalty | Ad-Fund |
| 5% | 3% |
How Much does an Espresso Americano Franchise make?
| # of Stores | Sales Range | Median | Average | # and % of Stores Above Average | |
| Full-Size Stores (Predominantly in Malls) | 44 | $53,918-$937,704 | $448.540 | $439.937 | 22 or 50% |
| Kiosks in Malls | 4 | $107,673-$564,236 | $533.194 | $400.025 | 3 or 50% |
| Non-Traditional Locations | 7 | $197,918-$669,065 | $295.597 | $387.664 | 3 or 43% |
Today, they have in operation more than 195 stores in over 25 cities spanning four countries, including Honduras, Nicaragua, Panama, and the U.S.
