Foxtail Coffee Franchise in 2024: Costs, Fee & FDD
Discover why Foxtail Coffee is a standout choice for franchise investors. Explore its rapid growth, community-focused model, and strong market presence to see if this specialty coffee brand aligns with your investment goals.
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Foxtail Coffee is a rapidly growing specialty coffee franchise that was founded in 2016 by Alex Tchekmeian and Iain Yeakle. The brand was born out of a passion for exceptional coffee and a desire to bring a unique, community-focused experience to the coffee industry. With roots in Orlando, Florida, Foxtail Coffee quickly made a name for itself with its commitment to quality, ethically sourced beans, and a welcoming atmosphere that invites customers to stay a while. The founders envisioned a space where people could connect over a great cup of coffee, and that vision has resonated strongly in the market.
At the heart of Foxtail Coffee’s offerings is its high-quality coffee, meticulously roasted to bring out the best flavors from each bean. The brand offers a range of classic coffee drinks, from espresso-based beverages to cold brews, as well as a variety of teas, pastries, and light bites. Their core customers are coffee enthusiasts who appreciate a well-crafted cup, but the welcoming vibe also attracts a broader audience, including students, professionals, and families looking for a cozy spot to relax or work. The brand’s emphasis on quality and community makes it a standout in a crowded market.
Since its inception, Foxtail Coffee has expanded significantly, now boasting over 40 locations primarily across the Southeastern United States. The franchise has established itself as a key player in the specialty coffee segment, with a strong presence in Florida and plans for further expansion into other regions. Each location is designed to be a neighborhood hub, with a focus on customer experience and high foot traffic. The franchise’s ability to maintain consistent quality and service across all its locations has helped it build a loyal customer base that frequents its shops daily.
Foxtail Coffee offers a comprehensive support system for its franchisees, which includes initial training programs that cover everything from coffee preparation to customer service, as well as ongoing support in operations, marketing, and supply chain management. The brand’s commitment to its franchisees’ success is evident in its thorough training programs, which ensure that every cup served meets the high standards that Foxtail Coffee is known for. Additionally, the franchise provides robust marketing support to help franchisees build and maintain a strong local presence, ensuring that each location thrives within its community.
Foxtail Coffee Franchise Insights
- Foxtail Coffee has experienced an impressive year-over-year unit growth of 139%, far outpacing the industry average of just 1%. This rapid expansion highlights the brand’s strong market demand and successful business model.
- With a 3-year failure rate of only 4% compared to the industry average of 11%, Foxtail Coffee demonstrates a robust and sustainable franchise system that offers a higher likelihood of long-term success for franchisees.
- Each Foxtail Coffee location is designed to be a community hub, attracting a loyal customer base that appreciates the brand’s commitment to quality and local engagement.
- The franchise prides itself on using ethically sourced beans, ensuring that every cup not only tastes great but also supports sustainable farming practices globally.
Foxtail Coffee Franchise Key indicators
Unit Growth YOY (%)
139%
vs industry 1%
Total U.S. Franchised Units
31
3-Year Failure Rate
4%
vs industry 11%
Total Investment
$357K-$806K
How much does it cost to open a Foxtail Coffee franchise?
Understanding the potential investment size and capital requirements is crucial when considering opening a Foxtail Coffee franchise. These financial commitments, including initial franchise fees, equipment costs, and ongoing operational expenses, impact the feasibility and profitability of the venture. Thoroughly evaluating these factors ensures that potential franchisees are prepared for the financial responsibilities and can make informed decisions about their ability to sustain and grow the business, ultimately contributing to long-term success.
Min & Max Investment
Opening a Foxtail Coffee franchise involves several key costs, which are outlined in Item 7 of the Franchise Disclosure Document (FDD). You can see a breakdown of the costs to open a Foxtail Coffee below from the most recent Item 7 below:
| Type of Expenditure | Minimum Investment | Maximum Investment |
|---|---|---|
| Initial Franchise Fee | $40,000 | $40,000 |
| Rent and Lease Security Deposit | $5,000 | $10,000 |
| Utilities | $1,000 | $4,000 |
| Leasehold Improvements | $175,000 | $390,000 |
| Market Introduction Program | $2,000 | $7,500 |
| Furniture, Fixtures, and Equipment | $80,000 | $126,500 |
| Point of Sale Hardware | $2,500 | $5,000 |
| Insurance | $1,500 | $3,000 |
| Signage | $8,000 | $16,000 |
| Office Expenses | $1,000 | $2,000 |
| Inventory | $10,000 | $14,000 |
| Operational Licenses and Permits | $1,000 | $3,000 |
| Professional Fees (lawyer, accountant, etc.) | $2,000 | $4,000 |
| Travel, lodging and meals for initial training | $3,000 | $6,000 |
| Additional Funds (for first 3 months) | $25,000 | $40,000 |
| Total Investment | $357,000 | $805,500 |
Item 7 in the Franchise Disclosure Document (FDD) is the “Estimated Initial Investment” section. It outlines the total costs a franchisee can expect to incur when starting a franchise, including the initial franchise fee, equipment, inventory, real estate, and other startup expenses. This section is crucial because it provides potential franchisees with a detailed understanding of the financial commitment required, helping them assess affordability and plan their investment strategy effectively.
Required Capital
For opening a Foxtail Coffee franchise or a similar specialty coffee franchise, the required financials typically fall within the following ranges:
- Initial Investment The total initial investment for a Foxtail Coffee franchise could range from approximately $357,000 to $806,000. This estimate includes costs like build-out, equipment, initial inventory, and franchise fees, though actual numbers can vary based on location and other factors. Assuming that you will finance your franchise investment, you should plan to have 20% of the total investment amount in the form of equity (cash) for the investment.
- Liquid Assets Franchisees typically need to have liquid assets of at least $100,000 to $150,000. This ensures that they have enough liquidity to cover initial and ongoing operating costs.
- Net Worth A minimum net worth of around $300,000 to $500,000 is often required. This ensures the franchisee has the financial stability to support the business, particularly during the startup phase.
These figures are estimates based on industry standards and can vary depending on the specific franchise and location. It’s always best to consult directly with the franchise for the most accurate financial requirements.
How much does a Foxtail Coffee franchise owner make?
Calculating the salary of a Foxtail Coffee franchise owner involves analyzing gross sales to determine total revenue, assessing operational efficiency to understand profit margins, and accounting for franchisor fees and additional expenses such as rent, utilities, and payroll. Effective management of these factors can significantly impact the profitability and financial success of a Foxtail Coffee franchise owner. This comprehensive financial analysis helps estimate net profits, from which the owner’s salary can be derived. A clear understanding of these factors ensures accurate salary projections and financial planning for sustainable business operations.
Foxtail Coffee Revenue & Gross Sales
Based on the latest insights, Foxtail Coffee franchises have shown consistent growth in sales, reflecting the brand’s strong market presence and customer loyalty. This impressive performance highlights the franchise’s potential for generating significant revenue, making it a promising investment in the competitive coffee industry.
Which key factors impact the average revenue performance of Foxtail Coffee franchisees?
Several factors likely contributed to the strong performance of Foxtail Coffee’s U.S. franchisee median gross sales this past year compared to the prior year. One key factor is the brand’s focus on delivering high-quality, ethically sourced coffee, which continues to attract a loyal customer base. Additionally, the ongoing expansion of new locations has increased brand visibility and market reach, driving more foot traffic to existing stores. The franchise’s commitment to creating a welcoming, community-focused environment has also helped retain customers and encourage repeat visits. Furthermore, effective marketing strategies and robust franchisee support systems have likely played a significant role in optimizing operations and enhancing overall sales performance across the network.
Foxtail Coffee Franchise Operational Costs
Operational costs for a franchise like Foxtail Coffee are the ongoing expenses necessary to keep the daily operations running smoothly and ensure the business meets the brand’s high standards. These costs are vital for maintaining the shop’s functionality and overall customer experience. For a Foxtail Coffee franchise, operational costs include:
- Coffee and Beverage Costs The expenses incurred from purchasing high-quality coffee beans, teas, and other ingredients required to prepare the menu items. This also includes costs for pastries and light food offerings.
- Labor Costs Wages, salaries, and benefits for baristas, managers, and any other staff involved in the day-to-day operations. Training and retaining skilled staff is essential for delivering the customer experience Foxtail Coffee is known for.
- Lease or Rent Payments The cost of leasing the property where the coffee shop is located. This includes monthly rent, property taxes, and insurance, which are significant factors, especially in prime locations.
- Utilities Expenses for electricity, water, gas, and internet, all of which are crucial for the operation of coffee-making equipment and maintaining a comfortable environment for customers.
- Maintenance and Repairs Costs associated with the upkeep of the shop’s equipment, such as espresso machines, grinders, and refrigeration units, as well as general maintenance of the building to keep it in top condition.
- Supplies and Inventory Includes everything from coffee cups, napkins, and cleaning supplies to managing inventory levels to ensure the shop is always well-stocked without overordering.
- Technology and Equipment Expenses related to maintaining and upgrading point-of-sale systems, customer Wi-Fi, and any other technological tools that enhance the customer experience and streamline operations.
- Miscellaneous Costs Other operational expenses such as local licenses, permits, professional fees (e.g., accounting services), and any other costs that arise from running the business.
Careful planning and budgeting for these operational costs are crucial for the financial health and success of your Foxtail Coffee franchise.
Foxtail Coffee Franchise Fees
When considering a Foxtail Coffee franchise, it’s important to be aware of the ongoing fees that will be part of your operational expenses. These fees are designed to support the franchise system and contribute to the overall success of your business. Key ongoing fees include:
- Royalty Fee 6% of your gross sales, due monthly. This fee is for the ongoing support and the right to use the Foxtail Coffee brand and operating system.
- Marketing Fund Contribution 1% of your gross sales, due monthly. This contribution supports system-wide marketing efforts aimed at promoting and building the Foxtail Coffee Co. brand.
- Additional Fees There may be other fees, such as technology, training, or other services, that could arise depending on the specific needs of your franchise and the support provided by the franchisor.
Understanding and budgeting for these fees is crucial for managing the financial health of your Foxtail Coffee franchise.
Foxtail Coffee Franchise Earnings
The earnings of a Foxtail Coffee franchise owner can vary depending on several factors, including the location, customer traffic, operational efficiency, and how well the business is managed. While specific figures aren’t available, it’s reasonable to assume that a well-run Foxtail Coffee franchise could generate substantial income, especially if the franchisee is actively involved in daily operations.
As an owner-operator, you might see higher earnings due to reduced management costs and a more hands-on approach to maintaining the quality and efficiency of the business. However, if you choose a semi-absentee model, where a manager handles the day-to-day operations, your earnings could be lower due to the additional costs of hiring and compensating management staff.
Ultimately, the financial success of your Foxtail Coffee franchise will depend on how effectively you manage the various aspects of the business, from customer service to cost control.
How to Open a Foxtail Coffee Franchise
Becoming a Foxtail Coffee franchisee involves several key steps, starting from the initial inquiry and leading up to the grand opening of your franchise location. Here’s an overview of the process:
- Initial Inquiry You or your franchise specialist submits an initial inquiry basic information about your interest and background. You should also conduct thorough research on the franchise, including seeing all of the information available on the Vetted Biz franchise intelligence platform, including access to the most recent Franchise Disclosure Document (FDD).
- Franchise Application After your initial inquiry, you’ll be invited to complete a formal franchise application. This application provides a more detailed look at your qualifications, financial situation, and reasons for wanting to join the Foxtail Coffee franchise network.
- Review and Approval The franchise development team will review your application to assess your suitability as a franchisee. If you meet the necessary criteria, you’ll be invited to a discovery day or an interview where you’ll learn more about the brand and the franchisor will evaluate your fit with the company.
- Franchise Agreement Upon approval, you’ll be presented with a Franchise Disclosure Document (FDD) and a Franchise Agreement. These documents outline the terms and conditions of your franchise relationship. You’ll need to review these carefully, possibly with the help of a legal advisor, before signing.
- Site Selection and Lease Negotiation Once the agreement is signed, you’ll work with the franchisor to identify a suitable location for your coffee shop. This step involves market research, site visits, and lease negotiations to secure a prime location that aligns with the brand’s standards.
- Training Program Before opening, you’ll participate in a comprehensive training program provided by Foxtail Coffee. This training covers everything from coffee preparation and customer service to marketing and business management, ensuring you’re fully equipped to run the franchise.
- Build-Out and Setup With your location secured, the next step is to build out and set up your coffee shop according to Foxtail Coffee’s design and operational standards. This includes everything from interior design and equipment installation to inventory stocking.
- Pre-Opening Marketing In the weeks leading up to your grand opening, you’ll collaborate with the franchisor on a pre-opening marketing plan. This is designed to generate buzz and attract customers to your new location.
- Grand Opening Once everything is in place, you’ll officially open your Foxtail Coffee franchise. The franchisor typically provides support during the grand opening to help ensure a smooth launch.
- Ongoing Support After the grand opening, the franchisor will continue to provide ongoing support in areas like marketing, operations, and supply chain management, helping you to grow and sustain your business.
Pros & Cons
Pros
Strong Brand Identity: Foxtail Coffee has established a well-respected brand with a loyal customer base, particularly in the Southeastern U.S. Their focus on quality and community creates a solid foundation for franchisees.
Rapid Growth and Expansion: The franchise has seen significant growth, indicating strong market demand and the potential for future expansion opportunities.
Ethical Sourcing: The brand’s commitment to ethically sourced coffee appeals to a growing segment of consumers who value sustainability and responsible business practices.
Community-Focused Model: Each location is designed to be a community hub, which can lead to strong local customer loyalty and repeat business.
Cons
Competitive Market: The specialty coffee market is highly competitive, with many established players. Success may require substantial effort in marketing and customer engagement to stand out.
Dependence on Location: Success can be heavily dependent on finding the right location. A poorly chosen site could result in lower-than-expected sales and financial challenges.
Operational Demands: Running a coffee shop can be labor-intensive, requiring consistent management of staff, inventory, and customer service to maintain the brand’s high standards.
Potential for Market Saturation: As Foxtail Coffee continues to expand, there’s a risk of market saturation in certain areas, which could impact individual franchisee profits.
