Most people feel coffee franchising is a complicated process. The truth, though, is far from it. Like any other expansion project, it takes time and effort to franchise cafes, but that doesn’t mean it’s an arduous process.
When you feel you’re ready to scale your coffee business and enter the world of coffee franchises, here are the steps that will guide you through the long process.
1. Evaluation of the current model
Before you start searching for business partners and expanding your coffee franchise, you should evaluate your business from start to finish.
The most important consideration should be: Can your business concept be standardized and standardized?
It is quite common for franchised outlets to fail because they are unable to maintain consistency and leading brand standards.
There is always a risk of brand dilution if franchised points of sale do not perform well. In addition, the current business model must be profitable.
Then, determine the cash flow cost structure and what the return on investment would be for the franchise in the first year.
The cost structure includes –
- Infrastructure development
2. Robust Process
You should establish a robust and effective approach to ensure consistency across sales if your concept is repeatable. The key components are:
The management of the business of multiple café franchises can be a difficult feat. Franchise management software helps overcome this challenge.
3. Trademark and Logo Registration
When you franchise your cafe, you give someone the right to use “your” logo and trademark. Having your logo and trade mark registered is the most important, and often the most overlooked, step in franchising.
This becomes increasingly important as you consider coffee franchises. To protect your intellectual property , franchisors must do everything to protect themselves from a fraudulent franchise party.
4. Cost estimate
Having decided on your processes, you must prepare an initial installation or an investment plan for cafes.
The most successful cafe franchise business models are those that accurately estimate their costs and include the extent of their food costs.
It should have all possible expense items. Depending on the business model of your cafe, divide initial setup costs:
The following are some licenses that you will need to establish your point of sale. For the list of licenses you would otherwise need at a coffee shop, click here.
5. Cash Flow And Financial Projection
Analyze past and current sales to determine current cash flow and financials. The franchisor should prepare a revenue cash flow calculated by multiplying the number of orders per day by the average ticket size.
The revenue from your point of sale would be Rs 1,792 if it receives 56 orders on weekdays and 70 on weekends, for example. With an average order value of Rs 400, the monthly revenue from your point of sale would be Rs 6000.
Also, the franchisor has to estimate the projected average rate and forecast it for the first twelve months of franchise activity, along with the revenue that will result from the project over the next five years.
6. Brand Profile
Establish a brand profile and provide a better understanding of your franchisees. You should be in this competitive area of cafe franchises in India. Documents must reflect the brand vision.
Moreover, it should include a brief description of the products and services that will be offered, as well as the date of the opening of the new store, as well as the type of support you will be providing to the cafe franchise before and after the opening. This will allow you to induce a certain level of brand consistency.
When franchising your cafe, consistency can be lost, which will tarnish the parent brand’s reputation. To avoid this, create a culture of adherence to brand values from the beginning.
7. Franchise Agreement
In light of the fact that there are no laws specific to the coffee business, it is essential that both parties record an agreement so that both parties are protected. Sometimes franchised cafes stop paying royalty fees once their business has been set up.
The franchise agreement should include details on the payment, the plan, the schedule, royalties, and the support provided by the franchise.
And there is no law to protect franchisors under which he can sue them or take away his right to sue the business.
Staff training is essential to maintain the quality of the franchise’s products. The franchisor must train the entire staff, from the chef to the waiters. New employees must be integrated and trained well before the opening of the Franchise.
Many franchisors prefer to recruit at least one month before opening their new points of sale and train them there so they understand how much is required of them. Some franchisors may also employ part-time employees.
9. Marketing and Advertising
If the franchisee is located in a specific geographic region, the franchisor can assist the franchisee with marketing and advertising by including it in the original plan or helping the franchisee understand the market to conduct marketing activities at the name in the early days. It is important to have a clear brand image.
The franchisors are supposed to clearly describe any responsibilities they have, such as being active on social media or participating on coffee review websites.
Provide branded templates, logos, and elements such as menus so that consistency is maintained across all franchisee outlets.
A franchisor must clearly specify the level of support that it will provide a franchise. For instance, some franchisors will only offer assistance with facilities, operations, and training, while others may also provide raw materials.
This support must be listed in the franchise agreement. When you are decided to franchise your business, seeking help from franchise consultants in India would be good since their expertise will lead you to success Multiple challenges face café operations at every level, with the most pressing being maintaining consistency in terms of taste and service.
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Even then, several factors, such as target and location, play a crucial role in coffee’s success Thus, franchised cafés come into the picture. When done right, franchising turns out to be a lucrative business.