Coffee Giants Brewing the Franchising Way

With the increase in disposable income and material comfort beaming on faces apparently, the market crowds are humming over eating joints, snacks counters, and ice-cream parlors. And in the same breath is brewing the coffee culture, with its popularity growing rapidly amongst the younger generation, who constitute a larger part of the population. Another factor for the rising coffee culture in cities is the growing trend among the youth to sit together and catch up with the latest gossip. While some rely on a cup of coffee to begin the day, others spend hours relaxing and ordering coffee in the outlets. With all these factors backing up the coffee culture, there is a lot of opportunity and scope in this sector.

According to A.G Puttaraj, President, Coffee Day Xpress, “Coffee franchising has helped in the growth in terms of the number of outlet generation as well as overall sales and profits.”

Playing it Big

Owning and running a coffee shop is a rewarding business with great profit potential and doing it through franchise helps you set up the business in the quickest and easiest way.

Puttaraj informs, “Franchising has greatly helped in our development, and thereby, today, we are able to stand at 900+ kiosks, out of which around 600 are run by the franchisees.” However, to become a successful franchisee, the entrepreneur should have some important prerequisites. Puttaraj says, “The franchisee should be well read, willing to learn and grow, should be actively involved in running the outlet and should have the minimum investment required.”

Above mentioned requisites are mandatory for taking a franchise but there are several other considerations as well. Location being the most essential, your kiosk or coffee outlet should be in a high foot-fall area to get the maximum benefits.

The organised coffee chain retail market is said to be Rs 1,000 crore and has been steadily growing. Owing to that, Pan India Food Solutions, the company that has brought Coffee Bean & Tea Leaf to India, Operations Head (India) Amit Maheswari said," For CBTL, this is where the opportunity lies for growth.”

Sipping the Franchising Game

What began as a venture of passion to prove what good coffee should really taste like has turned into a flourishing business for coffee giants like Coffee Day Xpress, Coffee Beanz, Barnie’s Coffee, Coffee Bean & Tea Leaf, Café Desire etc, experiencing tremendous growth in the business, launching new franchise models that value flexibility as well as quality control.

The advantage of running a coffee franchise business is that it almost remains unaffected by the economic slowdown. Coffee franchise is a low investment and high-profit business as the franchise stores have fewer overhead expenses as compared to a restaurant which requires a large amount of money for cooking and storing expensive frozen foods etc.

Building a business is tough, and even starting a franchised outlet needs time to build its own reputation but it is comparatively easier for a coffee franchise to make a name in the market, provided one’s services and quality is not compromised. As a result, it reaps quicker profits.

Amit added,” A few key factors influencing this growth is transition of certain sections of the population from traditional tea-drinkers to coffee lovers, increasing amount of disposable income and exposure to international brands.”

What’s New?

Coffee is a business that can be done in a small space or one may go in for a larger space depending on one’s financial resources and preferences. One may add snacks to the coffee menu.

There are various options for the coffee franchise that simply do not exist for other franchises. “If you are looking for a perfect franchise business but are scared of investing a large sum of money, then you can opt for a kiosk model, which can be the best option as it requires a low start-up capital with small operational costs, with high profits.”

Another option is the ‘walk-in-coffee shop’, that requires a hefty investment, where you need a proper outlet with adequate staff. More and more coffee outlets are emerging around us every day due to its alluring benefits.

“In order to further expand their footprints, brands in India have entered the franchise mode and are planning to make it big”, informs Amit.