Scooter’s Coffee Franchise in 2024: Costs, Fee & FDD
Curious about Scooter’s Coffee as an investment? Explore our analysis of this growing franchise, highlighting its potential, key considerations, and what makes it stand out in the competitive coffee industry.
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Scooter’s Coffee is a well-established player in the coffeehouse industry, founded in 1998 by Don and Linda Eckles in Bellevue, Nebraska. What began as a small drive-thru coffee shop has blossomed into a nationwide phenomenon, thanks to the founders’ commitment to high-quality coffee, exceptional service, and convenience. The name “Scooter’s” reflects the brand’s emphasis on speed and efficiency, a key differentiator in a market where customers increasingly value quick and easy access to their favorite beverages. Scooter’s Coffee has carved out a niche for itself by sticking to its original mission: to serve the best coffee in the shortest amount of time.
The core offerings at Scooter’s Coffee revolve around high-quality, hand-crafted coffee beverages, including lattes, cappuccinos, and cold brews. They also serve a variety of teas, smoothies, and baked goods, catering to a wide audience with diverse tastes. A standout feature is their signature Caramelicious, a rich, caramel-infused latte that has become a customer favorite. The brand targets busy professionals, students, and anyone on the go who craves a quick, delicious caffeine fix. Their drive-thru model is particularly appealing to these customers, providing speed without sacrificing quality.
As of today, Scooter’s Coffee has grown significantly, boasting over 600 locations across the United States, with a strong concentration in the Midwest and Southern regions. This rapid expansion reflects the brand’s broad appeal and effective business model. The franchise continues to grow, with new locations opening regularly, further solidifying its place in the competitive coffee industry. On a daily basis, thousands of customers visit Scooter’s locations, attracted by the promise of a quick, satisfying coffee experience.
Franchisees benefit from an extensive support system, including comprehensive training programs that cover everything from day-to-day operations to customer service excellence. Scooter’s Coffee offers ongoing support through marketing assistance, site selection, and store design guidance. The brand’s commitment to franchisee success is evident in their hands-on approach, ensuring that each location not only meets but exceeds customer expectations. Whether you’re a seasoned business owner or new to franchising, Scooter’s Coffee provides the tools and support needed to thrive in the coffee business.
Scooter’s Coffee Franchise Insights
- Scooter’s Coffee has seen rapid growth, with over 700 locations across the U.S., making it one of the fastest-growing coffee franchises in the country.
- The brand’s signature drink, the Caramelicious, is a top-seller, contributing to a substantial portion of their daily sales, which sees thousands of customers served each day.
- The brand’s coffee is sourced through their own vertically integrated coffee sourcing program, which ensures high-quality beans while supporting sustainable farming practices.
- Scooter’s Coffee locations are designed to be compact, often requiring less square footage than traditional coffee shops, which can lead to lower real estate costs and more strategic placement in high-traffic areas.
Scooter’s Coffee Franchise Key indicators
Unit Growth YOY (%)
39%
vs industry 1%
Total U.S. Franchised Units
729
3-Year Failure Rate
2%
vs industry 11%
Sales-to-Investment ratio
0.8:1
How much does it cost to open a Scooter’s Coffee franchise?
Understanding the potential investment size and capital requirements is crucial when considering opening a Scooter’s 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 Scooter’s 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 Scooter’s Coffee below from the most recent Item 7 below:
| Type of Expenditure | Minimum Investment | Maximum Investment |
|---|---|---|
| Initial Franchise Fee | $40,000 | $40,000 |
| Initial Opening Support Fee | $15,000 | $15,000 |
| Construction Costs | $495,000 | $829,000 |
| Architectural and Engineering Fees | $36,000 | $75,000 |
| Equipment, Fixtures, and Furniture | $172,500 | $183,000 |
| Signs | $51,000 | $61,000 |
| Point-of-sale System and Software | $14,500 | $15,000 |
| Technology Systems | $34,500 | $41,000 |
| Deposits and Licenses | $1,000 | $8,000 |
| Initial Training: Travel and Living Expenses | $5,000 | $8,000 |
| New Store Opening Training Fee | $5,000 | $5,000 |
| Opening Inventory, Supplies, and Smallwares | $25,000 | $27,000 |
| Additional Funds—3 Months | $0 | $86,000 |
| Total | $894,500 | $1,393,000 |
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 Scooter’s Coffee franchise, the required capital, liquid assets, and net worth are generally in the following ranges:
- Initial Investment The total investment to open a Scooter’s Coffee franchise typically ranges from $895,000 to $1.39 million. This includes everything from construction and equipment to the franchise fee and initial inventory. 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 It’s recommended that potential franchisees have at least $200,000 in liquid assets to cover initial expenses and to ensure the business is adequately funded as it gets off the ground. This figure is an estimate based on industry standards for similar coffee franchises.
- Net Worth Franchisees are generally expected to have a net worth of at least $500,000. This ensures that the franchisee has the financial stability to support the business in both its startup phase and during ongoing operations. Again, this is an estimate and can vary slightly depending on specific circumstances and market conditions.
These figures provide a general guideline for the financial requirements to open a Scooter’s Coffee or a similar coffee franchise in the industry. It’s always advisable to consult directly with the franchisor for the most accurate and detailed information.
How much does a Scooter’s Coffee franchise owner make?
Calculating the salary of a Scooter’s 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 Scooter’s 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.
Scooter’s Coffee Revenue & Gross Sales
Based on the most recent analysis, Scooter’s Coffee franchises have a median gross sales of $869,610. The brand continues to demonstrate strong consumer demand and steady revenue potential.
Which key factors impact the average revenue performance of Scooter’s Coffee franchisees?
The performance in Scooter’s Coffee U.S. franchisee median gross sales can likely be attributed to several factors. Economic fluctuations, including inflation and rising operational costs, may have impacted consumer spending habits and franchisee margins. Additionally, increased competition in the coffee and quick-service restaurant sectors could have contributed to this decline, as consumers have more options than ever before. Seasonal variations and changes in consumer behavior, such as shifts towards at-home coffee consumption, may also have played a role. Despite this, Scooter’s Coffee remains a strong brand with solid market presence, continuing to attract a loyal customer base.
Scooter’s Coffee Franchise Operational Costs
When opening a Scooter’s Coffee franchise, the key primary ongoing operational costs you should consider include the following:
- Staffing and Payroll Labor costs are a significant ongoing expense, including wages, benefits, and training for your baristas and management team.
- Inventory and Supplies Regular restocking of coffee beans, syrups, baked goods, and other consumables will be a continuous expense to ensure you meet customer demand.
- Utilities and Maintenance Costs related to electricity, water, waste disposal, and maintaining your equipment, such as espresso machines and refrigeration units, are essential to keep the operation running smoothly.
- Lease and Rent Depending on your location, lease or rent payments for the space will be a considerable ongoing expense.
- Marketing and Promotions While franchisees typically receive marketing support, local advertising, promotions, and community involvement initiatives will require ongoing investment.
These costs are crucial to consider as they directly impact your profitability and the day-to-day operation of your franchise.
Scooter’s Coffee Franchise Fees
When considering the ongoing fees associated with opening a Scooter’s Coffee franchise, it’s important to understand the key financial commitments that come with running the business. Below are some of the primary ongoing fees:
- Royalty Fee 6% of Net Sales, paid every Tuesday for the preceding reporting period. This fee is automatically deducted via electronic funds transfer, contributing to the support and ongoing development of the brand.
- Marketing Contribution 2% of Net Sales, also paid every Tuesday via electronic funds transfer. This contribution goes into the Marketing Fund, which is used for national and regional advertising campaigns to drive brand awareness and customer traffic.
- Local Marketing and Advertising Commitment Currently, there is no mandatory local marketing expenditure. However, the franchisor reserves the right to require up to 2% of Net Sales to be spent on local marketing and advertising in the future, with 60 days’ notice.
- Additional Fees There may be other fees that could arise, such as technology fees, training fees, or fees for additional support services provided by the franchisor. These costs should be anticipated and budgeted for as part of your ongoing operational expenses.
These fees are crucial to factor into your financial planning to ensure the ongoing success of your franchise.
Scooter’s Coffee Franchise Earnings
Based on the most recent analysis, an owner-operator of a Scooter’s Coffee franchise can expect to generate estimated earnings of around $130,442 annually. This figure is derived from median gross sales of approximately $869,610, reflecting the earnings potential for those fully involved in the daily operations of their business. These earnings highlight the financial viability of the franchise, especially for those who are committed to the hands-on management of their location.
This earning potential is a strong indicator of the franchise’s ability to generate solid returns, particularly in a competitive market. With the right location, effective management, and a commitment to maintaining high operational standards, a Scooter’s Coffee franchise can be a rewarding investment for an owner-operator.
How to Open a Scooter’s Coffee Franchise
Becoming a Scooter’s Coffee franchisee involves several key steps, each designed to ensure you’re well-prepared to run a successful business. 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 is reviewed, you’ll be asked to complete a formal franchise application. This application provides a more detailed look at your financial status, business experience, and why you’re interested in franchising with Scooter’s Coffee.
- Discovery Day After reviewing the FDD, you’ll be invited to a Discovery Day at Scooter’s Coffee headquarters. This is an opportunity to meet the corporate team, learn more about the business model, and see the operations firsthand. It’s also a chance to ask any remaining questions and ensure the franchise is the right fit for you.
- Franchise Agreement Signing If both parties agree to move forward after Discovery Day, you’ll sign the franchise agreement. This legally binding document formalizes your relationship with Scooter’s Coffee and outlines your responsibilities as a franchisee.
- Site Selection and Lease Negotiation With the franchise agreement in place, you’ll begin working with the Scooter’s Coffee team to find a suitable location for your store. They’ll assist with site selection and lease negotiations to ensure you choose a location that meets their standards and has the potential for success.
- Training Program Before your store opens, you’ll undergo a comprehensive training program at Scooter’s Coffee headquarters. This training covers everything from day-to-day operations and customer service to marketing and financial management, ensuring you’re fully prepared to run your franchise.
- Store Build-Out and Pre-Opening Preparations While you’re in training, the build-out of your store begins. The Scooter’s Coffee team will guide you through the design and construction process, ensuring your store meets brand standards. You’ll also work on hiring staff, setting up your inventory, and planning your grand opening.
- Grand Opening and Start of Operations Once your store is ready, it’s time to open the doors and start serving customers! Scooter’s Coffee will provide support during your grand opening and continue to offer ongoing assistance as you establish your business.
Pros & Cons
Pros
Strong Brand Recognition: Scooter’s Coffee has a well-established brand with a loyal customer base, particularly in the Midwest and Southern U.S., which can drive steady foot traffic to your location.
Proven Business Model: The drive-thru-focused business model has proven successful, offering convenience to customers and potentially higher sales due to quicker service times.
Community Engagement: The franchise encourages local involvement and charity initiatives, which can help build a strong community presence and customer loyalty.
Cons
Limited Menu: While a focused menu can be a strength, it also means fewer opportunities to diversify offerings, which might limit your ability to attract a broader customer base.
Franchise Territory Restrictions: Depending on the agreement, you may face restrictions on where you can open additional locations, potentially limiting expansion opportunities within your preferred region.
Dependence on Drive-Thru: While the drive-thru model is a major draw, it can also be a limitation in areas where pedestrian traffic is high, as there might be less emphasis on dine-in or walk-up customers.
Operational Demands: As an owner-operator, you will need to be heavily involved in day-to-day operations, which can be time-consuming and demanding, especially in the initial stages.
