Coffee Beanery
Coffee Beanery offers coffee, beverages, food items, and merchandise under its brand name. Known for its variety of coffee drinks and store models, it operates in the quick-serve restaurant sector.
About Coffee Beanery
The Coffee Beanery, Ltd. is a Flushing, Michigan based chain of coffee shops operating in the United States and Guam. It was founded in Dearborn, Michigan in 1976 by JoAnne and Julius Shaw.
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Coffee Beanery franchise FAQ
How much does it cost to open one — the total initial investment?
This isn't specified in the excerpts. The FDD provides a range for additional funds needed over three months, but it does not give a comprehensive total initial investment figure that includes all costs upfront.
What is the initial franchise fee?
The initial franchise fee is paid as a one-time lump sum upon signing the Franchise Agreement [p.21]. The amount is identical regardless of the characteristics of the Store or its location [p.21]. This fee is non-refundable, and there is no specified amount in the excerpts provided.
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is a continuing weekly payment of four percent (4%) of Net Sales, which includes revenue from all products and services sold by the store, minus certain specified deductions [p.61, p.98]. There is no mention of an additional advertising fee in the provided excerpts; however, the franchisor handles all Brand Building and promotional programs without input from franchisees [p.38].
How long is the initial franchise agreement, and can I renew it?
The initial franchise agreement does not specify a fixed term length [p.4], but Store Owners may request to renew for an additional five years, provided they comply with certain conditions such as submitting the request between nine and twelve months before the end of the current term [p.59]. CBL is required to approve renewal requests unless unreasonable [p.59].
Can I sell or transfer my franchise, and what does that require?
According to the FDD, you generally cannot transfer ownership of your franchise without good cause as determined by the franchisor [p.6]. However, the franchisor may have a right of first refusal in such cases. This isn't specified in the excerpts for all scenarios regarding transfers.
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement if there is good cause, such as the franchisee's failure to comply with lawful provisions of the franchise agreement and not curing such failure within a reasonable time frame, which cannot exceed 30 days [p.6]. Additionally, the franchisor may terminate agreements for unauthorized subleases or other similar causes [p.102]. Illinois law can also affect conditions under which the agreement can be terminated and non-renewal rights [p.170].
What financial requirements — net worth and liquid capital — do I need to qualify?
To qualify, you need to demonstrate adequate financial resources and liquid capital available to successfully operate the Store. While specific net worth figures are not provided in these excerpts, you must show that you have the necessary financial means given the obligations associated with operating a store [p.75].
Do I get an exclusive or protected territory?
No, you do not receive an exclusive territory. The franchisor retains the right to establish other franchised or company-owned stores that may compete with your store in any area without restriction [p.41, p.59]. This isn't specified in the excerpts.
What training and ongoing support does the franchisor provide?
The franchisor provides an Operations Training program lasting between 7 to 10 calendar days before the store opens. This includes both classroom and in-store training covering business basics, customer service, and store operations [p.33]. Additionally, within 180 days after opening, the franchisor may provide one on-site follow-up training visit of up to 1.5 days at their discretion [p.33]. The franchisor also requires the store owner to participate in and support recommended training programs [p.60(f)].
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 does not make any financial performance representations and does not authorize its employees or representatives to make such representations either orally or in writing [p.51]. However, if you are purchasing an existing outlet, they may provide you with the actual records of that outlet [p.51].
What am I restricted to selling, and where must I buy supplies?
You are generally prohibited from operating a similar business during the term of the franchise [p.4]. Regarding supplies, you may have to buy or lease certain items from the franchisor or a limited group of suppliers designated by them, which might be more expensive than other options [p.4]. Specifically, prior to opening, you are required to purchase your opening coffee inventory and uniforms from the franchisor, with costs ranging between $6,500 and $13,000 depending on various factors [p.13]. Additionally, for operating supplies needed for initial three months of operation, you must adhere to the franchisor's System standards and may need to purchase computer hardware, software, and peripherals from their Approved Suppliers [p.30].