Biggby Coffee is a community coffee shop chain with offerings of espresso beverages, sandwiches, baked goods, etc. Their franchise is generally operated from either a free-standing, store front or strip center location or a prefabricated modular structure. Biggby has a very high focus on community integration, which they credit for their economic recovery after COVID-19 pandemic. Robert P. Fish is a Co-Founder and Co-CEO of Biggby Coffee since April 2016, along with Michael J. McFall. Both of them are managing members of Global Orange, Biggby’s associates.
The Food and Beverage industry in the USA accounts for 13% of all manufacturing employment in the country. Around 1.46 million people get employed in this industry. Food franchises make up to 36% of the total franchise establishments in the USA, and there’s the expectation that it will create 1.6 million more jobs by 2027.
The annual growth rate in the industry is around 2% and the EBITDA multiplier is around 3x.
The initial Franchise Fee is $20,000. The initial franchise fee is payable in full at the time the franchisee sign the Franchise Agreement. The initial franchise fee is also not refundable under any circumstances.
The estimated total investment necessary to begin operation of a Biggby Coffee Franchise ranges from $246,305 to $564,626.
The following costs are part of the upfront costs included in the initial investment for a Biggby Coffee franchise. Many of these are one-time fees that are needed to launch the franchise.
Review the chart below to see how much it costs to buy a franchise in 2023.
|Site Built Location|
|Type of Expenditure||Estimated Amount Low||Estimated Amount High||Method of Payment||When Due||To Whom Payment is to be Made|
|Initial Franchise Fee||20,000||20,000||Lump Sum||At the time the Franchise Agreement is Signed||Global Orange|
|Real Property Rental||2,305||21,326||As arranged||As specified in lease||Third Party Landlord|
|Leasehold Improvements||135,000||290,000||As arranged||As arranged||Contractors|
|Equipment, Furniture and Decor||48,000||82,000||As arranged||As arranged||Global Orange and Suppliers|
|Drive-Through Equipment||0||16,500||As arranged||As arranged||Global Orange and Suppliers|
|Blueprints, Plans and Permits||5,500||34,800||As arranged||As arranged before opening||Architect and Contractor|
|Signage (Interior/Exterior)||4,000||18,000||As arranged||As arranged before opening||Signage Supplier|
|Initial Inventory||9,000||14,000||As arranged||As arranged||Food Service Suppliers and Global Orange|
|Insurance-general Liability, Property and Workers Compensation||3,500||4,500||As arranged||As arranged before opening||Insurance agent|
|Utility Expense||500||4,000||As arranged||Monthly/Quarterly||Utility Company|
|License Permits and Other||1,000||2,500||Lump Sum||As incurred||Public Agencies, Landlord|
|Initial Advertising and Gran Opening Promotions||9,500||9,500||As arranged||As arranged||Advertising Media|
Travel and Living
|500||5,000||As arranged||As incurred||Travel Company, Hotels, Restaurants|
|Organizational Expenses||2,000||2,500||As arranged||As arranged||Lawyer, accountant|
|Additional Funds – 3 Months||5,000||40,000||As incurred||As incurred||Global Orange, Various Suppliers and Employees|
|Total Estimated Initial Investment||246,305||564,626|
Biggby Coffee requires franchisees to lease around 1300-1700 square feet. for a “free-standing, store front or strip center location”. The franchisee will also be responsible for maintenance and other charges under the lease. At the time of signing, At the time of signing
a lease or land license, the franchisee may be required to pay a deposit equal to one or two
month’s rent and the first month’s rent. Moreover, the franchisee is required to have a grand opening advertising plan, which is to be implemented at the franchisee’s own cost. A minimum of $9,500 is required to be spent on this.
Royalty: 6% of gross sales.
Advertising Fund Contribution: The greater of: (a) $100 per week; or an amount specified by Biggby, not to exceed 3% of Gross Sales.
Minimum Local Advertising: Up to 3% of Gross Sales.
Annual Conference Fees: Determined by Biggby. Not to exceed $1,000 per person (currently less than $400).
|Non Drive Thru Stores||Top Quartile||Upper Middle||Lower Middle||Bottom Quartile||All Stores|
|Average Cup Count||355||256||224||191||255|
|Cost of Goods Sold||231,997||178,088||145,505||131,464||170,674|
|Marketing & Fees||78,149||57,971||51,547||43,455||57,393|
|Total Operating Expenses||393,077||347,917||307,495||281,955||331,242|
|Stores / % – or = Average||4/44%||4/44%||4/44%||5/56%||16/43%|
|Stores / % – or = Average||4 / 44%||4 / 44%||4 / 44%||5 / 67%||17/46%|
|Stores / % – or = Average||3 / 33%||5/56%||4 / 44%||5 / 56%||18 / 49%|
|Net Sales||Years ended December 31,|
|Initial franchise fees||$1,335,000||$531,335||$615,334|
|Advertising fund contributions||$6,171,488||$5,114,947||$3,920,217|
|Technology and maintenance fees||$676,548||$549,765||$488,404|
|Product sales and other revenue||$3,534,797||$2,638,636||$1,621,541|
|Royalty and licensing fees||$12,008,955||$9,819,012||$7,544,563|
|Total net revenue||$23,726,788||$18,653,695||$14,190,059|
|Cost of Revenue||$2,178,063||$1,551,098||$1,129,791|
|Nonoperating Income (Expense)|
|PPP loan forgiveness (Note 4)||–||–||$784,022|
|Total nonoperating income||$272,807||$242,588||$922,906|
|Consolidated Net Income||$1,433,995||$2,482,079||$3,073,038|
|Amounts Attributable to Noncontrolling Interest and Controlling Interest|
|Consolidated net income attributable to:|
|Consolidated net income||$1,433,995||$2,482,079||$3,073,038|
Over the last three years the company has been expanding. Franchising units are growing. Franchises have closed at a rate of 16 units a year for the past three years.
|Outlet type||Year||Outlets at the Start of the Year||Outlets at the End of the Year||Net Change|
Biggby Coffee presents itself as an up-and-coming player in the industry focused heavily on community values and engagement. It is offering a chance to be a part of an industry that has been long present. While still in its early stages, Biggby Coffee’s growth seems to be accelerating.
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