Ziggi’s Coffee Franchise in 2024: Costs, Fee & FDD
Discover if Ziggi’s Coffee is the right coffee franchise opportunity for you. Learn about the brand’s rapid growth, franchise support system, and potential earnings to help you make an informed decision. Click here to explore more!
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Ziggi’s Coffee is a rapidly growing coffee franchise that began with a passion for creating an inviting space for coffee lovers. It was founded by Brandon and Camrin Knudsen in 2004 in Longmont, Colorado. What started as a single café has blossomed into a well-respected brand in the competitive specialty coffee industry. The founders’ goal was to serve high-quality coffee with great customer service, and Ziggi’s has held onto that ethos while expanding into a thriving franchise system. Today, Ziggi’s is known for its focus on the community, customer service, and a dynamic product lineup that attracts a wide range of coffee lovers.
At its core, Ziggi’s Coffee offers a variety of premium drinks, including espresso-based beverages, cold brews, teas, and smoothies. They also offer a selection of breakfast items, sandwiches, and snacks, catering to both coffee aficionados and those looking for a quick, quality bite. Their drive-thru and café models make them versatile, appealing to busy professionals, families, and commuters looking for a fast, friendly stop. They aim to serve a diverse customer base that values convenience without compromising on taste or experience.
As of now, Ziggi’s Coffee has grown to over 70 locations across multiple states in the U.S., with an aggressive growth plan that is adding new franchises every year. The franchise operates exclusively in the U.S., where it serves thousands of customers daily through both walk-in and drive-thru models. Its strong presence in smaller towns and suburban areas gives it a unique advantage in capturing markets that are often underserved by larger chains. With its rapid expansion, the brand has become a key player in the U.S. coffee franchise scene.
Ziggi’s offers a comprehensive support system for its franchisees. New franchisees benefit from initial training programs that cover everything from operations to marketing strategies, ensuring a smooth entry into the business. The ongoing support includes site selection assistance, in-depth training on daily operations, and marketing materials to help franchisees succeed. They also provide assistance with the construction process, making the setup as streamlined as possible. This hands-on approach, along with a strong brand presence, sets Ziggi’s apart as a solid investment for potential franchisees.
Ziggi’s Coffee Franchise Insights
- The franchise offers both drive-thru and café models, with drive-thru locations often generating higher foot traffic and faster customer service.
- Franchisees can expect an initial training program that spans 3-4 weeks, covering everything from operations to marketing, ensuring a strong foundation for new business owners.
- Ziggi’s customer base includes a broad range of demographics, including busy professionals, commuters, and families, making its offerings versatile for different markets.
Ziggi’s Coffee Franchise Key indicators
Growth YOY (%)
25%
vs industry 0%
Total U.S. Franchised Units
71
3-Year Failure Rate
5%
vs industry 10%
Sales-to-Investment ratio
0.6:1
How much does it cost to open a Ziggi’s Coffee franchise?
Understanding the potential investment size and capital requirements is crucial when considering opening a Ziggi’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 Ziggi’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 Ziggi’s Coffee below from the most recent Item 7 below:
| Type of Expenditure | Minimum Investment | Maximum Investment |
|---|---|---|
| Initial Franchise Fee | $40,000 | $40,000 |
| Launch Fee | $10,000 | $10,000 |
| Café with Drive-Thru Building | $0 | $500,000 |
| Site Work | $0 | $500,000 |
| Tenant Improvements | $0 | $300,000 |
| Architecture/Engineering | $55,000 | $90,000 |
| Fees/Permits (including water) | $0 | $15,000 |
| Initial Equipment Package (including POS) | $375,000 | $425,000 |
| Miscellaneous Smallwares, etc. | $11,000 | $12,000 |
| Sign Package | $35,000 | $45,000 |
| Initial Inventory | $25,000 | $25,000 |
| Initial Supply of Apparel, Gift Cards, and Loyalty Cards | $2,000 | $3,000 |
| Grand Opening | $10,000 | $10,000 |
| Utility Deposits, Business Licenses, etc. | $500 | $1,000 |
| Training Expenses | $3,500 | $5,000 |
| Professional Fees | $1,000 | $3,000 |
| Insurance | $2,000 | $4,000 |
| Additional Funds (3 months) | $25,000 | $30,000 |
| Total Investment | $595,000 | $2,018,000 |
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
Here’s a clear breakdown of the financial requirements to help you assess whether opening a Ziggi’s Coffee franchise aligns with your investment capacity:
- Initial Investment The total estimated initial investment for opening a Ziggi’s Coffee franchise ranges from $595,000 to $2,018,000. This includes costs for the franchise fee, equipment, construction, inventory, and other startup expenses. 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 Requirement Ziggi’s typically requires franchisees to have a minimum of $100,000 to $200,000 in liquid assets. This ensures that franchisees have enough financial flexibility to cover daily operations and any unforeseen expenses.
- Net Worth Requirement While the exact net worth requirement may vary, prospective Ziggi’s franchisees should ideally have a minimum net worth of around $500,000. This includes the total value of your assets such as property, investments, and savings, minus liabilities.
How much does a Ziggi’s Coffee franchise owner make?
Calculating the salary of a Ziggi’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 Ziggi’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.
Ziggi’s Coffee Revenue & Gross Sales
Based on the most recent analysis, Ziggi’s Coffee franchises have a median gross sales of $771,712, highlighting the brand’s strong performance in the competitive coffee market. This impressive figure underscores Ziggi’s growing consumer demand and the potential for franchisees to generate solid revenue in a rapidly expanding industry.
Which key factors impact the average revenue performance of Ziggi’s Coffee franchisees?
The strong performance of Ziggi’s Coffee franchisee median gross sales can likely be attributed to several key factors. First, the brand’s expansion into new markets has increased visibility and accessibility, driving more foot traffic to both its drive-thru and café locations. Additionally, Ziggi’s focus on offering a versatile menu—ranging from specialty coffee drinks to breakfast items—helps capture a broad customer base, including both morning commuters and casual customers. The increased demand for convenience, particularly in drive-thru service, has also played a significant role in boosting sales. Furthermore, effective marketing strategies and strong franchisee support have likely helped new and existing locations thrive.
Ziggi’s Coffee Franchise Operational Costs
Operational costs for a Ziggi’s Coffee franchise are the ongoing expenses required to run the day-to-day operations of the business. These costs are essential for maintaining the functionality of the coffee shop and ensuring smooth operations. For a Ziggi’s Coffee franchise, operational costs include:
- Food and Beverage Costs The expenses incurred from purchasing coffee beans, milk, syrups, and other ingredients needed to prepare menu items like espresso drinks, teas, and snacks.
- Labor Costs Wages, salaries, and benefits for employees, including baristas, managers, and other staff members involved in daily operations.
- Rent or Mortgage Payments The cost of leasing or owning the property where the coffee shop is located. This includes monthly rent or mortgage payments, as well as property taxes and insurance.
- Utilities Expenses for electricity, water, gas, internet, and other utilities necessary for running the coffee shop, especially for equipment like espresso machines and refrigeration units.
- Maintenance and Repairs Costs associated with the upkeep of the building, coffee machines, refrigerators, and other kitchen equipment. This includes routine maintenance and unexpected repairs.
- Supplies and Inventory This includes everything from coffee cups, lids, napkins, and cleaning products to inventory management costs for restocking consumables.
- Insurance Costs for various insurance policies, including property insurance, liability insurance, and worker’s compensation insurance.
- Technology and Equipment Expenses for maintaining and upgrading point-of-sale systems, coffee brewing machines, and any other technological infrastructure required for efficient operations.
Careful planning and budgeting for these operational costs are crucial for the financial health and success of your Ziggi’s Coffee franchise.
Ziggi’s Coffee Franchise Fees
Operational costs for a Ziggi’s Coffee franchise include several ongoing fees that are crucial for maintaining the franchise’s day-to-day operations and ensuring alignment with corporate standards. These fees, alongside other operational costs, must be factored into your budget as a franchisee. Below are some key ongoing fees you should be aware of:
- Royalty Fee 6% of your actual Gross Sales, payable weekly on Monday based on the prior week’s Gross Sales. This fee covers the use of Ziggi’s brand, systems, and ongoing support.
- Marketing and Technology Fee 1% of your actual Gross Sales, payable weekly with the Royalty fee. This contributes to Ziggi’s marketing efforts and technological infrastructure, ensuring a consistent brand presence and operational efficiency.
- Additional Fees There may be other fees for things like local advertising, equipment upgrades, and additional training, which vary depending on the specific needs and circumstances of your franchise.
Careful budgeting for these ongoing fees is crucial for maintaining the financial health and long-term success of your Ziggi’s Coffee franchise.
Ziggi’s Coffee Franchise Earnings
For a Ziggi’s Coffee franchise, the median gross sales of $771,712 offer a solid foundation for profitability. As a franchisee, understanding how these sales translate to earnings is key to assessing the business’s financial potential. Based on industry margins, Ziggi’s Coffee owner-operators earn an estimated $116,000 annually. This figure reflects earnings after accounting for key operational costs such as labor, inventory, and rent, but before taxes and personal expenses.
The profitability of a Ziggi’s Coffee franchise largely depends on factors like location, management efficiency, and customer traffic. Franchisees who actively manage their business and streamline operations may see higher returns, as effective management can reduce costs and improve sales. While these earnings offer a snapshot, it’s essential to carefully evaluate the full financial picture, including ongoing fees and local market conditions, to gauge long-term success.
How to Open a Ziggi’s Coffee Franchise
Becoming a Ziggi’s Coffee franchisee involves several key steps, starting with your initial inquiry and ending with the launch of your new 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 the initial inquiry, you will be asked to complete a formal application, providing details about your financial situation, experience, and goals as a potential franchisee.
- Discovery Day You’ll be invited to attend a Discovery Day, where you’ll meet with the Ziggi’s Coffee corporate team, learn more about the brand, and get a behind-the-scenes look at the operations.
- Approval Process After Discovery Day, you’ll go through an approval process, where Ziggi’s evaluates your application and background. Once approved, you’ll sign the franchise agreement and officially become a franchisee.
- Site Selection and Build-Out Ziggi’s will assist you in finding a suitable location for your coffee shop. Once the site is chosen, the build-out phase begins, which includes designing the layout, installing equipment, and preparing the space for operations.
- Training Before your store opens, you’ll undergo a comprehensive training program covering everything from daily operations to marketing strategies to ensure you’re prepared to run the business.
- Grand Opening After the training and build-out are complete, you’ll officially launch your Ziggi’s Coffee franchise with the support of the corporate team, including help with marketing and operations during your grand opening.
Pros & Cons
Pros
Strong Brand Growth: Ziggi’s Coffee is rapidly expanding, with over 70 locations across the U.S., indicating growing consumer demand and franchise success.
Flexible Business Models: The option to open both drive-thru and café locations offers flexibility in choosing a business model that suits your market and investment preferences.
Community-Oriented Brand: The brand has a strong focus on community engagement, which can help attract loyal, repeat customers in local markets.
Cons
Limited National Brand Recognition: While Ziggi’s is growing rapidly, it doesn’t yet have the same national brand recognition as major coffee chains like Starbucks or Dunkin’, which may affect customer traffic in certain areas.
Competitive Market: The coffee industry is highly competitive, with large chains like Starbucks and Dunkin’ dominating, potentially making it more challenging to capture market share.
Operational Demands: Running a coffee franchise requires long hours and hands-on involvement, particularly in the early stages of the business.
