When you think about it, opening a coffee shop can be quite difficult. Starbucks has been in business for decades, and they now collaborate with entrepreneurs to open licensed stores rather than a franchise. So, what are Starbucks licensed stores?
Starbucks licensed stores are those operated by Starbucks in collaboration with its partners. Starbucks, the parent company, grants a license to any member who wishes to collaborate with them in the sale of their products. However, there are strict rules governing this, and some checks must be completed before the license can be issued.
I found out about this while on a mission to launch into the coffee business a few weeks ago. I decided to Partner with Starbucks to become a coffee branch owner. Continue reading to learn everything there is to know about Starbucks stores, including how to apply for and open one near you.
How do I apply for Starbucks licensed store?
It is fairly simple to apply for a Starbucks license. It should be noted, however, that Starbucks does not have a franchise. As a result, the parent company, Starbucks, will have the lion’s share of control over how it is run. That means that Starbucks’ policies will govern how the business is managed.
It will also make the majority of decisions regarding the services provided and how they are provided to maintain Starbucks’ authenticity.
The steps for applying for a Starbucks-licensed store are outlined below.
1. Select a busy location.
Although Starbucks has not explicitly stated its preferred method for selecting an eligible licensed store owner, location is critical for any business.
Choose a location on a busy street that will attract a large number of walk-in customers, not just coffee enthusiasts but anyone looking for a quick bite for the day.
2. Sign up for the Starbucks Branded website.
The next step is to register on the Starbucks website and express your interest in partnering with them as a licensed store owner. You will be required to click on the “Apply for a Licensed Store” option here.
3. A drop-down prompt will appear for you to select the type of business you are in.
You will also be required to provide additional information on your business name, location, network, profits, revenues, liabilities, and how much cash you have to invest in a Starbucks outlet.
Take note that Starbucks prefers to work with well-established, profitable retail chains in high-traffic areas; this will give you a better chance of passing the application process.
4. Use the application’s comment section to market yourself and demonstrate why you would be an excellent choice for a Starbucks store licensee.
5. Click the Submit button in the interface to return the completed form to Starbucks.
6. Be patient and wait for Starbucks to review your application before responding.
7. Starbucks has not specified how long applicants must wait for a response, but you can write an email or give a call to inquire about your application by clicking the Company Information URL under Contact Us on the website. If it takes a while to get an answer from them.
As you wait, make sure to organize all of your business records and documents, as part of the application process involves a thorough vetting and audit of your business, personal history, and financial standing.
How much does it cost to open a Starbucks licensed store?
Opening a Starbucks licensed store is an expensive endeavor that requires careful planning and preparation. In the early stages, the initial starting price is $315,000, which will help with licensing the store.
Furthermore, to be considered for the license, you must have $700,000 in liquid assets. To top it all off, make sure you’re strategically located in a busy area where you can get a steady stream of walk-in and in-house customers.
How much do Starbucks licensed stores make in profit?
Many factors are considered when determining how much profit a licensed store makes. Stores are among the factors to consider.
• Hours of operation
• Size of the outlet
• The number of licensee stores you own
Several studies have been conducted to attempt to estimate the earnings of the licensed store; one study claims that the revenue is $250,000 to $300,000 per year, while another school of thought believes that the stores can earn between $200,000 and $300,000.
Because the difference is minor, we can comfortably agree on an average of around $250,000 when all factors are considered.
It appears to be a rather lucrative endeavor that one may invest in for good, steady profits.
What are the requirements for Starbucks licensed stores?
For Starbucks licensed outlets, a variety of parameters are carefully taken into account. The store must be located in a popular area where there will always be people walking by and shopping there.
As part of the clearance for the cooperation outlet contract with Starbucks, the store also needs a license from the approved application.
For the license, you’ll need $315k, along with evidence of up to $700k in liquid assets. You’ll also need to demonstrate excellent financial standing because the business will need cash to be profitable.
You will also need to purchase some of the recommended commercial coffee equipment, but Starbucks assists its partners by coming in to help with installation, staff training, and store design to maintain the company’s culture and authenticity.
How many licensed Starbucks stores are there?
Starbucks, as we all know, is a behemoth in the coffee brewing industry. As of 2020 statistics, it has approximately 32,660 stores worldwide. Every year, it grows and expands. There are approximately 15700 licensed stores. Starbucks profits from these stores through a royalty program.
The stores are located all over the world, with America having the most licensed stores (8183), followed closely by China and the Asia Pacific with 4205.
The remainder is dispersed across Africa, Europe, and the Middle East. Starbucks converted about 300 of its stores in Thailand to licensed entities in 2019, and another 82 company-run outlets in the Netherlands and France were completely converted to licensed stores.
Starbucks’ licensing stores have aided its growth and advancement plans, particularly in areas where they do not currently have a presence, as it can enter new markets without having to establish company-operated stores.
How Starbucks licensed stores work
Starbucks Licensed stores operate under a contract with the corporately owned Starbucks. Once they have a license, they can display the Starbucks logo in their stores and trade in Starbucks products.
The parent company, in this case, Corporate Starbucks, has complete control over the licensed store’s daily management and operations.
The licensed store upholds Starbucks recipes and menus, as well as ensuring that the employees’ work uniforms match those of the parent company.
The parent company facilitates pieces of training, store design, and equipment installations and provides free support in this manner.
The licensed stores, on the other hand, are required to have their equipment and employees; Starbucks is not responsible for their employees’ pay, bonuses, commissions, or benefits.
The parent company of Starbucks earns money from licensed stores through a royalty program.
What are the terms and conditions of agreement for Starbucks licensed Stores?
The purchase and ownership of a licensed store are subject to several terms and conditions, which include:
Starbucks licensees will be required to maintain high levels of quality for all Starbucks beverage and food options, as well as all other Starbucks products.
The licensed partner must also have a well-organized system in place for conducting and ensuring quality assurance checks.
Starbucks Display and logo Licensed stores are not permitted to use the parent company’s logo or display for any other purposes, such as marketing, sales, or advertising, without first notifying Starbucks. They must also obtain Starbucks’ permission to do so.
Publicity and public relations
A licensed dealer may not use any Starbucks display or logo for promotional purposes unless authorized by the relevant Starbucks officer.
Privacy and confidentiality
According to the terms of the agreement, as a licensed partner, you are not permitted to share any business-related information between Starbucks and yourself.
The information could be about the company’s products, services, revenues, or anything else that could put the company in jeopardy.
Intellectual property rights
Licensed store owners will be required to acknowledge that all marks, logos, displays, and ideas are the property of Starbucks.
Only Starbucks has the authority to manipulate or change its trademarks based on consumer preferences and other factors.
Starbucks Corporation reserves the right to recall a product and suspend its use or delivery if it is deemed harmful to the intended users.
The licensed partner will not, under any circumstances, call any press briefings or make any public official statements regarding such without the authorization of Starbucks.
Starbucks’ prices for various products and services have already been set in stone in the agreements, taking into account any taxes, duties, tariffs, surcharges, and so on. Any change in pricing will thus require Starbucks’ approval.
Invoices from authorized retailers
Starbucks may from time to time request store invoices and other relevant business documentation for accountability purposes. Starbucks will also conduct thorough store vetting and audits.
Starbucks reserves the right, with a fifteen-day notice letter, to terminate any licenses, contracts, or agreements.
This is if the licensed store fails to meet the contract’s requirements or the licensed store owner makes any assignments for the benefit of the seller’s creditors.
Responsibilities following termination
Starbucks will no longer work with or collaborate with the licensed store.
The licensed store owner must return all tools, information, items, and other resources provided by or on behalf of Starbucks.
Any partially or completely paid-for deliverables will be returned to Starbucks.
According to the agreement, the licensed store and Starbucks will part ways amicably, and Starbucks will not be liable for any termination fees.
Payment for damage or loss
The licensed partner will be required to assume responsibility for any damage, loss, personal injury, allegations, lawsuits, and claims that develop as a result of its performance and leadership concerning the goods and services made available at its location.
The authorized partner shall protect Starbucks and its pertinent stakeholders from such situations.
The licensed store owner needs to be prepared for routine store audits and inspections to make sure it complies with Starbucks’ policies and procedures.
The licensee will be obliged to submit all requested information and to make any modifications advised following inspections.
The terms and conditions of the agreement for Starbucks licensed Stores may be changed at any time and only by Starbucks.
However, a note will be sent to the licensee informing them of this.
On Starbucks website, a copy of the most recent or amended Terms and Conditions of Agreement will always be accessible.
No waiver shall be effective unless made in writing and signed by the appropriate Starbucks representatives and/or the parent company of Starbucks.
Remedies and rights
Starbucks will have the right to terminate the agreement, demand the return of all confidential information, recover all damages, obtain injunctions to protect the brand, and pursue other legal options to resolve the issue amicably if the licensed partner violates any of Starbucks’ rules and regulations.
Resolutions of disputes
No foreign body law shall be used to settle problems between a licensed partner and Starbucks; instead, all disputes will be settled following Washingtonian law.
All disputes will also be handled according to the local legal system.
The prevailing party will be entitled to collect their legal and court costs in situations where there is a misunderstanding and application of the agreement.
Government purchases in the United States
To the degree necessary, licensed partners will have to sell to the government as a client.
Additionally, licensed partners must treat everyone equally, regardless of color, gender, sexual orientation, religion, country of origin, disability, or protected veteran status.
The Starbucks social responsibility guidelines, which are easily accessible at Starbucks website, will need to be followed by licensed partners.
What are the benefits of Starbucks licensed stores?
Among the advantages of opening a Starbucks, a franchise is
You will never run out of consumers when it comes to Starbucks because it has already made a name for itself as a top-notch coffee chain and earned the hearts of many.
Starbucks is a brand to which many consumers are devoted.
Since Starbucks provides free pieces training, installation, and design assistance, you won’t have to worry about funding such processes while starting your firm, which will save you money.
Aside from training employees, Starbucks ensures that licensed store owners are trained and well equipped to run the business, so it offers progressive training modules to keep store owners up to date on new coffee trends and markets.
Starbucks is a growing company that doubles its revenue every year, so your company will grow as well.
Furthermore, the profits for any entrepreneurial venture come in the form of revenue, so if you work hard and smart, you will reap a good harvest from the coffee business at the end of each fiscal year.
How long does it take for Starbucks to approve applications to open a licensed store?
Starbucks has not specified how many days an applicant will have to wait before receiving a response. However, after completing the necessary application form on their website and submitting all required documentation, you can expect to wait for 1 to 3 days.
If they do not respond within that time frame, you can always contact them via the website by clicking the “Company Information” link under “Contact Us.” You can follow up on the selection process by calling them or sending an email.
Does Starbucks train employees for its licensed stores?
It certainly does. Starbucks is committed to the growth and development of its partners. They are also very concerned with maintaining their brand name, service quality, and customer relations. As a result, they provide free training to employees working in its licensed stores.
They also provide business management and leadership training to licensed store owners. Starbucks’ success is largely linked to the satisfaction of their employees and partners, and they take their training seriously to ensure quality services and products at all times.
Are Starbucks licensed stores profitable?
They are, indeed, quite profitable. According to recent market research, you can earn between $250,000 and $300,000 per year as a Starbucks licensed store owner, all factors considered.
Working with a trusted brand that has gained popularity and a following for decades is an excellent way to make money. The only disadvantage is that the initial capital required to obtain the license is extremely expensive.
Why can’t Starbucks franchise its stores?
Given that Starbucks is a family-run company, it sought to maintain its authenticity because ceding too much authority to others may damage the reputation of the long-standing company. Therefore, Starbucks exclusively issues licenses to outside parties.
Franchises avoided changing the way they interact with clients or the goods and services they provide to maintain their culture. Starbucks has complete control over the management and operation of the store thanks to the licenses, something that franchises would not be able to achieve.
How would I tell if a Starbucks store is licensed or corporate-owned?
Corporate-owned Starbucks can be found in large malls or their standalone buildings. In this situation, Starbucks pays the workers directly. Unlike the legally held Starbucks locations, which are typically found inside structures owned by other businesses like Target, Safeway, or Barnes and Noble.
If you are an employee of a business that has a license, the hosting store, like Target, pays you; Starbucks does not provide your paycheck.
Is service in Starbucks licensed stores different?
Sure, it is. Customers could encounter expensive prices, and the rewards program is exclusive to Corporate Starbucks, which makes it unusual. Keep in mind that a licensed establishment has only agreed to display the Starbucks logo and sell the company’s goods within the terms of the license. There are slight variations in the services, but the recipes, employee conduct, and dressing will all be the same.
Do Starbucks licensed stores charge higher?
Yes, but it depends on the licensed retailer; most prices may go up a dollar or two compared to normal Starbucks store prices. Furthermore, beware that any additional ingredients or toppings you desire will almost certainly cost more, so be sure to ask ahead of time and keep this in mind the next time you purchase your favorite beverage.
Are there special benefits to Starbucks employees working at licensed stores?
No, there aren’t any advantages. Employees of Starbucks who work for outlets with a license are separate from Starbucks Corporate. When Target has been granted permission to use the Starbucks logo and sell Starbucks items, an employee can only gain from Target. They work for Target, not Starbucks.
Do employees prefer to work in licensed stores to working in a corporate owned store?
Individual preferences are important. However, many employees prefer corporate-owned stores because of the benefits and perks such as comprehensive medical coverage, coffee discounts, paid maternity leave, free tuition with Arizona University, paid time off, and so much more. Corporate is more demanding and time-consuming, so if you want a flexible environment where you can sleep in on weekends and holidays, a licensed store is a better option.
Because the environment is slow-paced, you can also interact with customers on a more personal level. Work is also distributed fairly, and you will be able to complete the required hours without having to work extra overtime. What you want and your lifestyle will determine whether you prefer licensed or corporate-owned stores.
Can an employee working at a licensed store transfer to a corporate owned store?
No. They are not eligible for direct transfers because they are not a partner or employee of Starbucks, hence they cannot transfer. They can only choose to resign from their position at the authorized retailer and then apply for the position they want at a corporately controlled retailer.
Are employees in a licensed Starbucks store get better payment?
No, Starbucks corporate pays better and provides far superior benefits to its employees. Employees working in licensed stores are compensated by the store owners, not by Starbucks.