Caribou Coffee
Caribou Coffee offers franchises to operate retail coffee shops serving coffee, tea, and baked goods. Known for its cozy ambiance and wide selection, it operates in the competitive café and restaurant industry.
About Caribou Coffee
Caribou Coffee Company is an American coffee company and coffeehouse chain. It was founded in Edina, Minnesota, in 1992. As of July 2024, the company operates over 800 locations worldwide. It is headquartered in Brooklyn Center, Minnesota.
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Caribou Coffee franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment for opening a 'Chalet' Coffeehouse ranges from $864,100 to $1,429,000 (excluding lease). For a 'Cabin' Coffeehouse, the range is from $606,100 to $937,000 (excluding lease), and for a 'Kiosk', it ranges from $279,100 to $703,000 (excluding lease). [p.1]
What is the initial franchise fee?
The initial franchise fee ranges from $7,000 to $15,000 for a Kiosk and is $30,000 for a Chalet or Cabin, as detailed in [p.22]. This fee covers services such as training, promotional assistance, site selection guidance, and other related services.
What are the ongoing royalty and advertising fees?
The ongoing royalty payments range from 4% to 6% of gross sales, with a mandatory minimum payment required regardless of sales levels [p.228, p.4]. Additionally, franchisees must contribute to advertising cooperatives, which involves remitting a percentage of coffeehouse or bagel bakery sales for use in advertising and promotional programs [p.193].
How long is the initial franchise agreement, and can I renew it?
This isn't specified in the excerpts. The FDD excerpts do not provide information about the duration of the initial franchise agreement or the renewal process beyond mentioning that there are separate terms for renewals [p.76].
Can I sell or transfer my franchise, and what does that require?
This isn't specified in the excerpts.
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement if there is reasonable cause as defined under Section 13.1-564 of the Virginia Retail Franchising Act or the laws of Virginia [p.261]. This means that any stated grounds for default or termination in the franchise agreement must meet this 'reasonable cause' standard to be enforceable.
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts. The FDD does not provide specific details on the net worth or liquid capital required for qualification as a franchisee. However, it does state that you must have adequate financial resources and capital to operate the Franchised Business [p.116].
Do I get an exclusive or protected territory?
You do not receive an exclusive territory. Whether you are granted a Protected Territory depends on various factors determined by the franchisor, and not all franchisees will be granted one [p.40].
What training and ongoing support does the franchisor provide?
The franchisor provides initial training for Certified General Managers and additional personnel, which may include travel expenses [p.37]. They also offer web-based training programs for employees [p.84] and on-site training upon request, with associated costs [p.64]. The franchisor can require additional training if a mystery shopper visit is not passed, including per diem charges [p.85]. Full-time management commitment to the franchise operations is required [p.45], and ongoing compliance with brand standards is expected.
How many franchised outlets are there, and how many have closed or been terminated?
This isn't specified in the excerpts.
Does the franchisor share any financial performance or earnings information?
The franchisor may disclose actual or potential financial performance information about its outlets if there is a reasonable basis for this information and it complies with the FTC's Franchise Rule. However, the franchisor does not make any representations about future financial performance or past financial performance of company-owned or franchised outlets, nor do they authorize their employees to make such representations [p.60].
What am I restricted to selling, and where must I buy supplies?
You are required to sell only items that bear the franchisor's Proprietary Marks if specified [p.87]. Additionally, you must buy all Input Items from suppliers approved by the franchisor, except for Proprietary Items which are addressed separately [p.85]. This includes ingredients, equipment, furniture, and other materials needed for your operations [p.3, p.26]. You cannot purchase any such items from an unapproved supplier without first obtaining written approval from the franchisor [p.86], though you may have to pay inspection or testing fees in this case [p.86, p.19].