Dutch Bros Coffee is a beloved franchise known for its high-quality coffee, friendly service, and unique culture. Many entrepreneurs and coffee lovers dream of owning their own Dutch Bros franchise. However, before jumping into the business, it’s important to understand the costs involved. From franchise fees to ongoing expenses, there are many factors to consider when determining the cost of franchising a Dutch Bros Coffee location. In this article, we will break down the costs of franchising a Dutch Bros Coffee, providing insight into the fees, expenses, and financial requirements involved in becoming a franchisee. Whether you’re an aspiring coffee entrepreneur or just curious about the costs of franchising, this article is the perfect place to start.
- History of Dutch Bros Coffee
- Why is Dutch Bros Coffee such an attractive franchise to own?
- What is the minimum net worth needed to franchise a Dutch Bros Coffee location?
- How much does it cost to start a Dutch Bros franchise location?
- Steps to Open a Dutch Bros Coffee Franchise
- What is the typical ROI for a coffee shop in general?
- Example Numbers from a Theoretical Dutch Bros Coffee Franchisee: A Case Study
History of Dutch Bros Coffee
Dutch Bros Coffee was founded in 1992 by brothers Dane and Travis Boersma in Grants Pass, Oregon. Starting with a small pushcart, they quickly recognized the appeal of the drive-thru model and began serving espresso-based drinks through convenient drive-thru windows. The concept gained popularity, and Dutch Bros Coffee expanded beyond its initial location, gradually franchising its business model to enable others to open their own Dutch Bros Coffee stands.
The brand’s success can be attributed to its emphasis on quality and customer service. Dutch Bros Coffee takes pride in using a private label coffee blend and ensuring that each handcrafted beverage is made with care and precision. The company has built a strong reputation for its commitment to excellence and its dedication to creating a positive customer experience.
In addition to their focus on coffee, Dutch Bros Coffee has established a strong presence in the communities they serve. The company actively participates in local events, fundraisers, and community initiatives. Through their philanthropic arm, the Dutch Bros Foundation, they support various charitable causes, demonstrating their commitment to giving back.
As Dutch Bros Coffee continued to expand, it gained a loyal following, and by September 2021, the company operated over 450 locations in 11 states. The brand’s growth can be attributed to its innovative drive-thru model, dedication to quality and customer service, and its community-oriented approach.
Today, Dutch Bros Coffee remains a popular choice for coffee lovers seeking handcrafted beverages, convenient drive-thru service, and a company that actively engages with and supports the communities it serves.
Why is Dutch Bros Coffee such an attractive franchise to own?
Dutch Bros Coffee is a unique and dynamic coffee company that offers an exceptional experience for customers. If you’ve ever considered owning a Dutch Bros Coffee location, here are a few reasons why you might do so:
- High-quality products: Dutch Bros Coffee offers a wide range of specialty coffee drinks, teas, smoothies, and energy drinks, all made with high-quality ingredients and a passion for great taste.
- Unique atmosphere: Dutch Bros Coffee locations are known for their fun, upbeat atmosphere and friendly baristas. Whether you’re looking for a quick pick-me-up or a place to relax and socialize, Dutch Bros Coffee has you covered.
- Strong community focus: Dutch Bros Coffee is dedicated to supporting local communities and giving back through charitable efforts and community events. When you buy a Dutch Bros Coffee, you’re not just supporting a business, you’re supporting a movement.
- Easy and convenient: With locations all across the country, you’re never far from a Dutch Bros Coffee. The company’s drive-thru format makes it easy to grab a drink on the go, and the menu is simple and straightforward, making ordering quick and effortless.
- Opportunity for growth: As a franchise owner, you’ll have the opportunity to build a successful business and grow with the company. Dutch Bros Coffee offers training, support, and resources to help you succeed.
Still, you’ll need to do your due diligence. Let’s take a look at some of the numbers you’ll need to know before you even consider getting into a Dutch Bros franchise location.
What is the minimum net worth needed to franchise a Dutch Bros Coffee location?
Dutch Bros Coffee isn’t easy to franchise. At a minimum, your net worth needs to meet or exceed $500,000. Additionally, you’ll need to have at least $150,000 in liquid cash.
How much does it cost to start a Dutch Bros franchise location?
The initial cost to franchise a Dutch Bros Coffee location can vary, but it typically ranges from $350,000 to $450,000, including the franchise fee, equipment, inventory, and other startup costs. The franchise fee itself is $30,000.
The $30,000 franchise fee is the initial fee that a franchisee must pay to become a Dutch Bros Coffee franchise owner. This fee covers the cost of initial training and support, as well as the use of the company’s trade name and operating system. The franchise fee is a one-time payment and is separate from the ongoing royalties and advertising fees that franchisees must pay on an ongoing basis.
The ongoing fees you need to worry about are royalty fees, marketing fees, and local store marketing fees. For each of these, the percentages are as follows:
- Royalty fee: 4% of gross sales
- Marketing fee: 2% of gross sales
- Local store marketing fee: 1% of gross sales
These three fees total to 7% of your monthly revenue going straight to the Dutch Bros Coffee corporate office, and are typically expected with franchises.
Steps to Open a Dutch Bros Coffee Franchise
Here are the general steps to opening a Dutch Bros Coffee franchise:
- Research and explore the franchise opportunity: Learn about the company, its products, and its franchise program. Research the market and the competition in your area.
- Contact Dutch Bros Coffee: Fill out an online inquiry form or contact the franchise department directly to start the conversation.
- Review and complete the franchise application: Dutch Bros Coffee will provide you with a franchise application and ask you to provide financial and personal information.
- Participate in the interview and discovery process: You will meet with Dutch Bros Coffee’s franchise team and learn more about the franchise opportunity and the company’s requirements.
- Receive and review the Franchise Disclosure Document (FDD): Dutch Bros Coffee will provide you with an FDD that includes information about the franchise program, fees, and obligations.
- Sign the franchise agreement and pay the franchise fee: Once you have reviewed and agreed to the terms of the franchise agreement, you will pay the franchise fee and begin the process of opening your Dutch Bros Coffee location.
- Complete training and support: Dutch Bros Coffee will provide you with training and support to help you set up and operate your franchise location.
- Open your Dutch Bros Coffee location: After completing the training and support, you will be ready to open your franchise location and start serving customers.
What is the typical ROI for a coffee shop in general?
The return on investment (ROI) for a coffee shop can vary widely based on several factors, including the location, size, type of shop, and competition in the area. On average, a coffee shop can have an ROI of 5-20% or more.
Some of the factors that can impact the ROI of a coffee shop include:
- Start-up costs: The cost of starting a coffee shop, including equipment, rent, and inventory, can have a significant impact on the ROI.
- Location: The location of the coffee shop can greatly impact its success, as well as its ROI. Factors such as foot traffic, accessibility, and competition in the area can all impact the ROI.
- Sales volume: The sales volume of the coffee shop will directly impact its ROI, as the more sales it generates, the higher its profits will be.
- Operating costs: The ongoing costs of operating a coffee shop, such as rent, utilities, labor, and supplies, will impact the ROI.
- Marketing and branding: The marketing and branding strategies used by the coffee shop can impact its success and, therefore, its ROI.
It’s important to keep in mind that in many cases, it may take several years to achieve a positive return on investment.
Example Numbers from a Theoretical Dutch Bros Coffee Franchisee: A Case Study
The numbers provided below are theoretical and meant to give an idea of what the revenue and expenses may look like for a franchisee opening a Dutch Bros Coffee location:
- Coffee sales: $8,000 – $15,000 per month
- Rent: $1,500 – $5,000 per month
- Utilities: $500 – $1,500 per month
- Supplies (such as coffee beans and milk): $2,000 – $4,000 per month
- Labor: $3,000 – $5,000 per month
- Marketing and advertising: $500 – $1,500 per month
Net Profit: $120K – $180K
Based on these estimates, the franchise owner would have an average monthly profit of $10,000 to $15,000. This would equate to an annual profit of $120,000 to $180,000. It’s important to keep in mind that these are rough estimates and that the actual expenses and revenue of a Dutch Bros Coffee franchise can vary greatly based on many factors. Additionally, these estimates do not take into account one-time start-up costs such as equipment, supplies, and licensing fees.
I need to emphasize that these numbers are theoretical and should not be taken as a guarantee of financial performance for a Dutch Bros Coffee franchise location.