Seattle’s Best Coffee
Franchised Units: 552
Franchise Fee: $30,000
Total Start-Up Costs: $298,000–$481,000 (traditional) $191,000–$521,000 (nontraditional)†
Royalty: 7%
Renewal Fee: N/A
Marketing Fee: 1%
When Starbucks purchased Seattle’s Best Coffee (sbc) in 2003, the brand’s growth strategy turned toward licensing. As the economy staggered, a renewed emphasis was placed on SBC franchising, with executives betting that the slow economy would bring more credit-worthy candidates and better access to labor.
From coffee carts and kiosks to full cafés, franchisees can enter at a variety of investment levels while still capturing strong volume.
“The various investment levels coupled with our ability to test products and concepts within company-owned cafés to ensure they are market-ready for franchised locations allows Seattle’s Best Coffee to provide franchisees a variety of options and services to help them maximize their investment,” SBC’s director of franchise development, Marie Gill, says.
Franchisees also receive a lot of support, including site selection, store opening assistance, café training, ongoing consultation, and employee training.
Word on the Street: “Seattle’s Best Coffee is a relatively inexpensive brand to build out; people love coffee so there’s no introduction needed; and … there’s also a market for folks who just dislike Starbucks,” Tran says, adding that few consumers recognize the Starbucks-SBC link.
†estimated costs do not include real estate and improvements
Long John Silver’s
Franchised Units: 1,022* with more than 400 additional
multibranded units
Franchise Fee: $20,000
Total Start-Up Costs: $879,500–$1,256,000
Royalty: 5% of gross sales
Renewal Fee: Right to collect 10% of initial franchise fee
Marketing Fee: 5% of gross sales
The longtime leader in the quick-serve seafood segment, Long John Silver’s has an unquestioned market niche, which makes the concept an attractive option for many franchisees.
“Seafood provides great diversification to those franchisees operating in other quick-serve segments such as burgers and pizza,” Long John Silver’s director of asset strategy, Doug Heinrich, says.
A fully franchised system under the Yum! Brands banner, LJS values the input of its franchisees, which recently led the brand to place a renewed emphasis on standalone locations over cobranded units.
In addition, franchisees have the ability to join the Unified Foodservice Processing Co-op (UFPC), which allows participation with all other Yum! Brands in volume pricing on equipment, food, and other services.
Word on the Street: “Long John Silver’s is perhaps the least touted brand in the Yum portfolio, but it is a clear winner in the quick-serve seafood segment,” Allen says. “The Yum purchasing cooperative provides tremendous advantages and economies of scale for all of its brands, including LJS.”
*based on 2008 figures
