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PJ’s Coffee of New Orleans Franchise Review

PJ’s Coffee of New Orleans Franchise Background 

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. 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.

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 Coffee is the industry leader in sourcing methods; from farm to cup.

Management Team

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 in the name stands for Phyllis Jordan, the founder. She’s one of the pioneers of gourmet coffee, 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 team is experienced and ready to support new franchisees that are looking to be part of their system.

Franchise Food Services Industry Analysis 

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 Full-service Model
ItemEstimated Amount (in USD)When DueTo Whom Payment is to Be Made
LowHigh
Initial Franchise Fee$35.000$35.000When you sign the Franchise AgreementFranchisor
Real Estate Lease for Premises1.87512.500As ArrangedLandlord
Furniture, Fixtures, and Equipment50.000150.000Before OpeningApproved Suppliers
Opening Advertising7.50010.000Within first month of openingAdvertising
Training Expenses00As ArrangedFranchisor
Travel and living expenses while training3.5007.000Before OpeningArlines, Hotels and Restaurants
Insurance2.4005.000Before OpeningAgent/Company of Franchisee’s Choice
Other prepaid expenses, suach as deposits, licenses and various permits1.0003.500Before OpeningSuppliers and Government Agencies
Opening Inventory7.00014.000Before OpeningFranchisor and suppliers
Signage4.00018.000Before OpeningApproved Suppliers
Leasehold Improvements50.000270.000Before OpeningApproved General Contractor
Small wares3.0005.000Before OpeningApproved Suppliers
POS System & Back-office Computer System1.5005.500As ArrangedApproved Suppliers
Legal, accounting & organizational costs2.5005.000As ArrangedGovernment, Attorneys, Accountants
Construction Drawings1.50010.000As ArrangedFranchisor and/or Approved Suppliers
Additional Funds27.50027.500As ArrangedSuppliers and Employees
TOTAL$198.275$578.000
Non-traditional limited service model
ItemEstimated Amount (in USD)When DueTo Whom Payment is to Be Made
LowHigh
Initial Franchise Fee$25.000$25.000When you sign the Franchise AgreementFranchisor
Real Estate Lease for Premises1.87512.500As ArrangedLandlord
Furniture, Fixtures, and Equipment50.000100.000Before OpeningApproved Suppliers
Opening Advertising7.50010.000Within first month of openingAdvertising
Training Expenses00As ArrangedFranchisor
Travel and living expenses while training3.5007.000Before OpeningArlines, Hotels and Restaurants
Insurance2.4005.000Before OpeningAgent/Company of Franchisee’s Choice
Other prepaid expenses, suach as deposits, licenses and various permits1.0003.500Before OpeningSuppliers and Government Agencies
Opening Inventory7.00014.000Before OpeningFranchisor and suppliers
Signage4.0007.000Before OpeningApproved Suppliers
Leasehold Improvements50.000150.000Before OpeningApproved General Contractor
Small wares3.0005.000Before OpeningApproved Suppliers
POS System & Back-office Computer System1.5005.500Before OpeningApproved Suppliers
Legal, accounting & organizational costs2.5005.000As ArrangedGovernment, Attorneys, Accountants
Construction Drawings1.50010.000As ArrangedFranchisor and/or Approved Suppliers
Additional Funds27.50027.500As ArrangedSuppliers and Employees

TOTAL                                                       $188.275        $387.000

RoyaltyAd-Fund
5%3%-6%

How Much does a PJ’s Coffee of New Orleans Franchise make?

Period of AnalysisSame Store Sales Growth over Prior YearTotal Number of Units Measured in SSS AnalysisNumber of Units that Attained or Exceeded Average SSS Increase
2014-20159,4%5419
2015-20168,8%559
2016-20176,6%6028
2017-20184,9%6327
 # of Units Average Gross RevenueHighest Gross RevenueLowest Gross RevenueMedian Gross Revenue% That Attained or Surpassed Average Gross Revenue 
Top Tier22$670.289$1.370.341$528.310$622.71641%
22$414.760$519.926$350.662$414.25250%
Bottom Tier22$215.440$350.606$70.533$210.55550%
66$433.497$1.370.341$70.533$414.252n/a

Interested in Seeing how PJ’s Coffee Franchise compares to other Food Services franchises? Download our Food Services franchise guide below!

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