PJ’s Coffee Franchise Review
Founded in 1978 as one of the original specialty coffee brands, PJ’s Coffee of New Orleans now brings the savory taste and experience of New Orleans coffee to the world and beverage industry. PJ’s Coffee utilizes only the top 1% of Arabica beans, sourcing 14 origin coffees from Sumatra to Ethiopia, Colombia to Papua New Guinea. This gourmet coffee is small batch roasted in 300lbs or less by Roastmaster Felton Jones, who alone has over 22 years of experience with PJ’s Coffee.
Beverage Industry
PJ’s Coffee strives to deliver a unique coffee experience to all locations. With one step in the door customers are greeted with the scent of our 100% Arabica beans, invoking the soul and unique experience of the original location on Maple Street.
PJ’s Coffee carries a complete line of espresso-based beverages, flavored coffee, and award-winning Original Cold Brew iced coffee, as well as a variety of food options. Fresh baked pastries & desserts are available for multiple day parts with a focus in supporting sustainability. PJ’s Coffeeis the industry leader in sourcing methods; from farm to cup.
PJ’s Coffee of New Orleans was founded in 1978 by Phyllis Jordan, a pioneer in the coffee industry that demonstrated that better beans, superior roasting techniques, and pure passion for the art of coffee-making mattered. PJ’s famous iced coffees are brewed daily using a special cold-drip process that protects the flavor and strength of the beans, while producing a coffee that is 2/3 less acidic – a process pioneered by our founder.
PJ’s Coffeein the name stands for Phyllis Jordan, the founder. She’s one of the pioneers of gourmet coffee in beverage industry, her idea was to create coffee blends and roast the beans in small batches, they same way they still do today in their roasting facility not far from Bourbon Street.
PJ’s Coffee team is experienced and ready to support new franchisees that are looking to be part of their system.
Food and Beverage Industry
Franchise Strengths
Operating in the “specialty coffee” segment that acts as a differentiator to Starbucks.
Established brand with a management team that offers a lot of support to franchisees.
Offers a superior specialty coffee product that a large and broad range of consumers “need” on a daily basis.
Appeals to a large portion of the population.
Operationally simple.
Franchise Weaknesses
Location and site selection are quite important in dictating the success of the business.
Margins have the potential to be eroded due to changes in price of ingredients and / or increase in labor costs.
Franchise Opportunities
Huge, growing market – in 2015 alone U.S. consumers spent over $74bn on coffee.
Specialty coffee is a segment within the industry that is expected to continue gaining share of the market.
Recent statistics show that American consumers drank on average about two cups of coffee per day (Statista).
Franchise Threats
Operating in a large, competitive market where consumers could change where they get their coffee if they perceive a drop in value.
Profits can be negatively impacted due to close proximity of a similar competitor.
Potential for consumers to make coffee at home.
How much is a PJ’s Coffee of New Orleans Franchise?
PJ’s Coffee of New Orleans Franchise cost ranges from $198,275 to $578,000 according to the 2020 FDD.
Traditional limited service model
| Item | Estimated Amount (in USD) | When Due | To Whom Payment is to Be Made | |
|---|---|---|---|---|
| Low | High | |||
| Initial Franchise Fee | $35.000 | $35.000 | When you sign the Franchise Agreement | Franchisor |
| Real Estate Lease for Premises | 1.875 | 12.500 | As Arranged | Landlord |
| Furniture, Fixtures, and Equipment | 50.000 | 150.000 | Before Opening | Approved Suppliers |
| Opening Advertising | 7.500 | 10.000 | Within first month of opening | Advertising |
| Training Expenses | 0 | 0 | As Arranged | Franchisor |
| Travel and living expenses while training | 3.500 | 7.000 | Before Opening | Arlines, Hotels and Restaurants |
| Insurance | 2.400 | 5.000 | Before Opening | Agent/Company of Franchisee’s Choice |
| Other prepaid expenses, suach as deposits, licenses and various permits | 1.000 | 3.500 | Before Opening | Suppliers and Government Agencies |
| Opening Inventory | 7.000 | 14.000 | Before Opening | Franchisor and suppliers |
| Signage | 4.000 | 18.000 | Before Opening | Approved Suppliers |
| Leasehold Improvements | 50.000 | 270.000 | Before Opening | Approved General Contractor |
| Small wares | 3.000 | 5.000 | Before Opening | Approved Suppliers |
| POS System & Back-office Computer System | 1.500 | 5.500 | As Arranged | Approved Suppliers |
| Legal, accounting & organizational costs | 2.500 | 5.000 | As Arranged | Government, Attorneys, Accountants |
| Construction Drawings | 1.500 | 10.000 | As Arranged | Franchisor and/or Approved Suppliers |
| Additional Funds | 27.500 | 27.500 | As Arranged | Suppliers and Employees |
TOTAL | $198.275 | $578.000 |
Non-traditional limited service model
| Item | Estimated Amount (in USD) | When Due | To Whom Payment is to Be Made | |
|---|---|---|---|---|
| Low | High | |||
| Initial Franchise Fee | $25.000 | $25.000 | When you sign the Franchise Agreement | Franchisor |
| Real Estate Lease for Premises | 1.875 | 12.500 | As Arranged | Landlord |
| Furniture, Fixtures, and Equipment | 50.000 | 100.000 | Before Opening | Approved Suppliers |
| Opening Advertising | 7.500 | 10.000 | Within first month of opening | Advertising |
| Training Expenses | 0 | 0 | As Arranged | Franchisor |
| Travel and living expenses while training | 3.500 | 7.000 | Before Opening | Arlines, Hotels and Restaurants |
| Insurance | 2.400 | 5.000 | Before Opening | Agent/Company of Franchisee’s Choice |
| Other prepaid expenses, suach as deposits, licenses and various permits | 1.000 | 3.500 | Before Opening | Suppliers and Government Agencies |
| Opening Inventory | 7.000 | 14.000 | Before Opening | Franchisor and suppliers |
| Signage | 4.000 | 7.000 | Before Opening | Approved Suppliers |
| Leasehold Improvements | 50.000 | 150.000 | Before Opening | Approved General Contractor |
| Small wares | 3.000 | 5.000 | Before Opening | Approved Suppliers |
| POS System & Back-office Computer System | 1.500 | 5.500 | Before Opening | Approved Suppliers |
| Legal, accounting & organizational costs | 2.500 | 5.000 | As Arranged | Government, Attorneys, Accountants |
| Construction Drawings | 1.500 | 10.000 | As Arranged | Franchisor and/or Approved Suppliers |
| Additional Funds | 27.500 | 27.500 | As Arranged | Suppliers and Employees |
| Total | $188.275 | $387.000 |
| Royalty | Ad-Fund |
| 5% | 3%-6% |
How Much does a PJ’s Coffee of New Orleans Franchise make?
| Period of Analysis | Same Store Sales Growth over Prior Year | Total Number of Units Measured in SSS Analysis | Number of Units that Attained or Exceeded Average SSS Increase |
| 2014-2015 | 9,4% | 54 | 19 |
| 2015-2016 | 8,8% | 55 | 9 |
| 2016-2017 | 6,6% | 60 | 28 |
| 2017-2018 | 4,9% | 63 | 27 |
| # of Units | Average Gross Revenue | Highest Gross Revenue | Lowest Gross Revenue | Median Gross Revenue | % That Attained or Surpassed Average Gross Revenue | |
|---|---|---|---|---|---|---|
| Top Tier | 22 | $670.289 | $1.370.341 | $528.310 | $622.716 | 41% |
| 22 | $414.760 | $519.926 | $350.662 | $414.252 | 50% | n/a |
| Bottom Tier | 22 | $215.440 | $350.606 | $70.533 | $210.555 | 50% |
| 66 | $433.497 | $1.370.341 | $70.533 | $414.252 | n/a | n/a |
