Why are Coffee Chains Attractive to Franchisees?

Cold Brew Coffee |   Shutterstock

Cold Brew Coffee | Shutterstock

U.S. coffee drinkers have an average of three cups a coffee a day, according to the National Coffee Association and 51 percent of coffee drinkers in the U.S. drink gourmet coffee.

In Britain, 80 percent of the population visit coffee shops once a week, as reported by the Caffee Society. There has been significant growth in UK market.

In the U.S., over 50 percent of Starbucks chains are still corporate-owned. But this is not the case in the UK. where "Starbucks does operate a franchise model of operation and only about one in five Starbucks in Europe, the Middle East, and Africa are company-run," writes "Forbes."

While Starbucks is still very much expanding, other gourmet chains like Costa Coffee are also on the rise.

Coffee shops offering unique brews and beverages are catering to today's adventurous consumers. Not to mention, consumers are willing to invest in premium coffee options– making the profit margins higher for operators.

"Coffee drinkers have also become much more sophisticated in their tastes - just stand and take a look at the menu in your local coffee shop next time you're there," writes "Forbes." "From different blends to added flavor shots, iced drinks to coffee beans with ethical provenance - this gives business owners not only more option to expand the range on offer without diluting the core product offering, but also means that consumers are willing to pay high prices for a premium coffee product and profit margins can be significant."

Unlike other restaurant chains, coffee franchises are often attractive to operators who are looking to own several stores because they all can be established in the same area.

"Find success with a first franchise branch and then it’s easy then to open more within a short distance and appoint managerial staff to run them. The reality is that most people won’t walk far for coffee. This then means that one franchise can quite realistically operate a number of franchise units within a relatively short geographical distance," writes "Forbes."

In a past episode of The Barron Report, Host Paul Barron predicted that 2018 would be the year of coffee infusions and he was right. Watch the video below to learn more about how coffee chains with unique blends will be the ones that consumers gravitate to in this saturated market.