Espresso Americano Franchise Review

Espresso Americano is a coffee franchise that's committed to serving only the best coffee, complying with the strictest quality standards. As a leader in the coffee industry, Espresso Americano offers enticing espresso franchise opportunities for those seeking to enter this thriving market. They provide a proven business model and ongoing support to ensure franchisee success. This vertically integrated company ensures the necessary controls during the complete coffee processing steps, from bean to cup, making their espresso-based drinks of the highest quality.

Their served beverages include an extensive menu of hot and cold drinks, featuring their patented frozen Coffee Granita. They also offer a wide variety of pastries and gourmet snacks to satisfy everyone's taste.Espresso Americano provides excellent customer service in a relaxed environment to make each visit a unique and enjoyable experience for their customers. All this contributes to making Espresso Americano one of the best cups of coffee served in the region, cup after cup, in any of their locations. The franchise disclosure document further outlines the benefits and requirements, ensuring potential franchisees have all the information needed to make an informed decision.

Management Team

Established in 1994, Espresso Americano is a family-owned company from Honduras. It opened its first store in the downtown historic district of Tegucigalpa, with a small roaster serving the best coffee in Honduras. This revolutionized the coffee retail business, selling personalized beverages in a specialty coffee shop. They entered the U.S. market in 2014 in the Denver, Colorado area, where the U.S. management team is located.The Kafati family has large coffee and agricultural farms in Honduras, from which much of the coffee is supplied, ensuring quality control.Today, they have in operation more than 195 stores in over 25 cities spanning four countries, including Honduras, Nicaragua, Panama, and the U.S., with plans to continue expanding into additional markets.

Franchise Food Services Industry Analysis

Franchise Strengths

• Operating in the “specialty coffee” segment with a superior taste to Starbucks
• Coffee franchise with high brand recognition in Latin America that is leveraging its quality coffee position in the U.S.
• 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 and flexible to the desires of their franchisees

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 the price of ingredients and/or increase in labor costs
• Establishing its brand in the U.S. as it adjusts to the American market

Franchise Opportunities

• Brand awareness still has room to grow as additional units open across the US
• 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. Demand is supposed to grow 16% by 2020, reaching $26.7bn in total industry revenue

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 the close proximity of a similar competitor
• Potential for consumers to make coffee at home

How much is an Espresso Americano Franchise?

Espresso Americano Franchise cost ranges from $234,525 to $410,400 according to the 2017 FDD.

Café with Drive-Thru Unit

ItemEstimated Amount (in USD)When DueTo Whom Payment is to Be MadeLowHighInitial Franchise Fee$30.000$30.000When you sign the Franchise AgreementFranchisorReal Estate Lease (Rent and Security Deposit)62519.500Before Beginning OperationsLandlordUtility Deposits03.500Before Beginning OperationsUtilitiesLeasehold Improvements30.00040.000Before Beginning OperationsOutside SuppliersInsurance1.5004.000Before Beginning OperationsInsurance CompanyEquipment, Furniture, and Fixtures112.000190.000Before Beginning OperationsApproved Supplieris, Outside SuppliersTraining Expenses2.5005.000During TrainingAirlines, Hotels, and RestaurantsInitial Inventory5.00010.000Before Beginning OperationsFranchisor, Affiliate, Approved Suppliers, SuppliersOffice Equipment and Supplies2.0007.000Before Beginning OperationsApproved Suppliers, SuppliersComputers & Software5.4006.400Before Beginning OperationsApproved Suppliers, SuppliersSignage10.00012.000Before Beginning OperationsApproved SuppliersGrand Opening Fee7.00010.000First 3 months of operationAdvertising SuppliersLicenses and Permits5002.000Before Beginning OperationsLicensing AuthoritiesLegal and Accounting3.00010.000Before Beginning OperationsAttorney, AccountantDues and Subscriptions01.000Before Beginning OperationsApproved Supplieris, SuppliersAdditional Funds- 3 months working capital25.00060.000First 3 months of operationLandlord, utilities, providors, suppliers, and other operating expensesTOTAL$234,525$410,400

Kiosk Unit

ItemEstimated Amount (in USD)When DueTo Whom Payment is to Be MadeLowHighInitial Franchise Fee$30.000$30.000When you sign the Franchise AgreementFranchisorReal Estate Lease (Rent and Security Deposit)1883.750Before Beginning OperationsLandlordUtility Deposits03.500Before Beginning OperationsUtilitiesLeasehold Improvements7.00015.000Before Beginning OperationsOutside SuppliersInsurance1.5004.000Before Beginning OperationsInsurance CompanyEquipment, Furniture, and Fixtures20.00077.000Before Beginning OperationsApproved Supplieris, Outside SuppliersTraining Expenses2.5005.000During TrainingAirlines, Hotels, and RestaurantsInitial Inventory5.00010.000Before Beginning OperationsFranchisor, Affiliate, Approved Suppliers, SuppliersOffice Equipment and Supplies2.0007.000Before Beginning OperationsApproved Suppliers, SuppliersComputers & Software4.7006.000Before Beginning OperationsApproved Suppliers, SuppliersSignage5.0008.000Before Beginning OperationsApproved SuppliersGrand Opening Fee7.00010.000First 3 months of operationAdvertising SuppliersLicenses and Permits5002.000Before Beginning OperationsLicensing AuthoritiesLegal and Accounting3.00010.000Before Beginning OperationsAttorney, AccountantDues and Subscriptions01.000Before Beginning OperationsApproved Supplieris, SuppliersAdditional Funds- 3 months working capital10.00030.000First 3 months of operationLandlord, utilities, providors, suppliers, and other operating expensesTOTAL$98.388$222.250RoyaltyAd-Fund5%3%

How Much does an Espresso Americano Franchise make?

# of StoresSales RangeMedianAverage# and % of Stores Above AverageFull-Size Stores (Predominantly in Malls)44$53,918-$937,704$448.540$439.93722 or 50%Kiosks in Malls4$107,673-$564,236$533.194$400.0253 or 50%Non-Traditional Locations7$197,918-$669,065$295.597$387.6643 or 43%

Today, they have in operation more than 195 stores in over 25 cities spanning four countries, including Honduras, Nicaragua, Panama, and the U.S.