Scooters Coffee
Scooters Coffee offers franchises for espresso drinks, smoothies, baked goods, and more. Known for its casual atmosphere and variety of beverages, it operates in the quick-service coffee and bakery industry.
About Scooters Coffee
Scooter's Coffee is an American drive-through coffeehouse chain founded and headquartered in Omaha, Nebraska. As of June 2024, the chain had 800 franchises in 29 states, and was the second-largest drive-through coffee chain and the fifth-largest coffee chain in the United States.
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Scooters Coffee franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation of a SCOOTER'S COFFEE franchise ranges from $692,150 to $1,523,400. This includes $220,000 to $286,000 that must be paid to the franchisor or an affiliate [p.1].
What is the initial franchise fee?
The initial franchise fee is the amount paid by the Franchisee in consideration for the right to develop and operate one SCOOTER'S COFFEE Store. It is paid concurrently with the execution of the Agreement via an Automated Clearing House network transfer/direct debt (ACH) and is not refundable [p.79].
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is typically 8% of franchisee sales, broken down into a 6% royalty and a 2% marketing contribution [p.190, p.214]. The company spends at least 2% of franchisee sales on advertising and promotion each year [p.195, p.218].
How long is the initial franchise agreement, and can I renew it?
The initial term of a franchise or area representative agreement is generally 10 years [p.214]. A franchisee may elect to renew the term of a franchise agreement upon satisfaction of certain conditions and by paying a renewal fee upon execution of the new agreement [p.17.2].
Can I sell or transfer my franchise, and what does that require?
According to the FDD, you cannot sell, transfer, or assign your franchise without good cause as specified by the franchisor [p.5]. Any such action requires compliance with the provisions outlined in Article 16 of the agreement [p.102].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement for good cause, which includes the failure of the franchisee to comply with any lawful provision of the franchise agreement and to cure such failure after being given written notice and a reasonable opportunity (no more than 30 days) to do so [p.5]. Additionally, in Virginia, termination without 'reasonable cause' as defined by law may not be enforceable [p.253]. For franchises governed by Minnesota Franchise Law, specific grounds such as voluntary abandonment, conviction of an offense related to the business, or failure to cure a default that materially impairs goodwill also apply [p.243].
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 net worth or liquid capital requirements for franchisees.
Do I get an exclusive or protected territory?
No, you do not receive an exclusive territory. You may face competition from other franchisees, outlets owned by the company, or other channels of distribution or competitive brands that the company controls [p.42]. This isn't specified in the excerpts.
What training and ongoing support does the franchisor provide?
The franchisor provides initial training, including an Immersion Training session lasting 3 days in Omaha or another designated facility [p.38]. This training includes lecture, classroom discussion, and hands-on demonstration using materials from the Operations Manual [p.38]. Additionally, ongoing support is available through the Operations Training program, though franchisees must pay a fee and cover travel and living expenses for any Designated Managers attending this training [p.40].
How many franchised outlets are there, and how many have closed or been terminated?
There are 325 franchises in total, with 121 franchisees having either ceased to do business under the franchise agreement, had an outlet terminated, canceled, not renewed, or transferred within the last fiscal year [p.70].
Does the franchisor share any financial performance or earnings information?
The franchisor, Scooter's Coffee, LLC, does not make any financial performance representations other than those specified in Item 19. They do not authorize their employees or representatives to make such representations either orally or in writing [p.62]. However, if you are purchasing an existing outlet, they may provide actual records of that outlet [p.62].
What am I restricted to selling, and where must I buy supplies?
You are restricted to selling only the products and services approved by the franchisor, which include SCOOTER'S COFFEE gift cards and promotional items such as caps, T-shirts, jackets, and similar sportswear. You must also comply with the franchisor's standards and specifications for all sold items. Regarding supplies, you are required to obtain certain inventory, supplies, fixtures or other items from specific approved suppliers listed by the franchisor, including your affiliate or designated suppliers for items bearing the SCOOTER'S COFFEE logo or trademark [p.26, p.27].