Starbucks does not run on the franchise model. Instead, it offers licensing agreements to selected operators.
Starbucks is a status symbol and synonymous with success. Since its inception till today, the brand has grown a strong presence globally with multiple outlets. If you’re looking for investment options, well, owning a franchise can be a good deal. The good news is this is a completely attainable dream. But before a plunge, there are certain things you need to know about, like cost, space, and other requirements.
We have explained about Starbucks franchise cost and all other prerequisites in this blog. So keep on reading!
Many people get confused if Starbucks runs on the franchise model. You might wonder if anyone who meets all the requirements and has the funds to invest can open a Starbucks. However, that’s not the case with this brand, as Starbucks does not follow the standard franchise model. It directly owns and runs most of its locations, exerting strong control over operations, branding, and customer experience. This method enables Starbucks to maintain uniform quality and service in all its locations globally.
Here’s another thing, Starbucks provides licensing options. There are many authorized Starbucks locations commonly situated in busy places such as airports, hotels, and supermarkets. Although these stores are not franchises in the conventional way, they enable entrepreneurs to collaborate with Starbucks through a licensing agreement.
Starbucks Corporation is the parent company that controls the majority of global stores to maintain cohesive branding and top-notch quality. It has a subsidiary part called Starbucks Coffee Company that looks over the sourcing and roasting of coffee beans.
The company provides licenses to a number of select operators to open an authorized Starbucks shop. Following this model, they have expanded to 80 countries without even relying on and adhering to the traditional franchise model.
Starbucks runs an impressive total of 39,477 outlets worldwide, recorded in 2024. These shops are located in more than 81 nations, establishing it as one of the biggest coffee chains globally. The company’s presence keeps expanding, showcasing its popularity and strong demand for its offerings. Whether in city centers or isolated areas, you’re probably going to find a Starbucks outlet delivering the same quality.
Opening a Starbucks-authorized store needs a substantial investment amount. Your initial investment can be somewhere around $228,620 to $2,888,700 which includes licensing fees, construction, equipment, initial inventory, and training. The cost of renting or buying real estate is not included here. The total investment can go high or low depending on the location and size of the property.
Starbucks does not follow the traditional franchise method. Here, the store operator is asked to pay an average licensing fee of $315,000. On top of that, the operator has to meet strict financial terms to have a net worth of at least $700,000.
Although operating a Starbucks-licensed store requires a significant investment, the profit potential is considerable. The previous studies and reports suggest that annual earnings for authorized outlets can vary between $50,000 and $200,000. The numbers are influenced by factors such as location, inventory, and effectiveness of operations. The anticipated revenue per store is projected to be $1.2 million each year.
However, success is not assured, and meticulous management is vital to enhance profitability. Factors like location, operating expenses, and regional market can greatly influence profits.
There are chances for both profit and loss. It is important to study the Starbucks financial reports of the past 6-7 years and understand the crisis and bonus points.
If you have the funds and calculated all the factors and are ready to open a Starbucks outlet, that’s great. Note that with Starbucks you will get a license authorization, not the franchise agreement. The company generally partners with experienced operators who know the nerves of the local market and have the proper resources to meet the brand’s standards.
Here’s what the process looks like:
There are some potential risks involved in owning Starbucks outlets that you must think of. It can be a lucrative venture but with the high initial investment, strict guidelines, training sessions for baristas, and considering the competitive nature of the coffee industry, you might incur losses. Also, location is another factor that can determine the growth and loss. Not only that, stringent standards for customer service, store design, and product quality do not allow operators to showcase their creative potential at all.
So if you are thinking of opening the outlet, go ahead but make sure to review all these points to avoid any unpleasant circumstances in the future.
The expensive fees and strict standards of a Starbucks-licensed store appear overwhelming, but there are multiple other coffee franchise options that you can explore. Big brands such as Dunkin’ Donuts, Tim Hortons, and Biggby Coffee provide more conventional franchising options with reduced initial investment expenses. These brands also offer increased flexibility for franchisees, enabling them to have more influence in store management and marketing approaches.
You can go with other brands if your goal is to invest your money and make a profitable business. On the other hand, if you want to become a part of something legendary and have all the necessary tools to keep up with the standard, the Starbucks franchise can be for you.
The market size of the global coffee industry is USD 138.37 Billion in 2025 and is projected to grow to USD 174.25 billion by 2030. This industry was started multiple decades ago, and companies like Starbucks have fueled the fire and contributed to its exponential growth. Starbucks is known for its high standards, customer experience, sustainability, and product innovation.
The brand extends beyond outlets and licensing agreements; it acts as a role model to other brands for ethical sourcing and environmental initiatives. Plus, it is the reason that made premium coffee culture so popular globally. Starbucks’ specialty recipes, brewing methods, and new additions make the brand a powerful force in the global coffee market.
Started in 1971 in Seattle now becoming a huge global coffee giant, Starbucks has paved its way as a legendary brand. It offers licensing options at premium Starbucks franchise price, which allows operators to open the outlet in their desired area. All you need to do is meet the requirements and submit the proposal letter.
Also, make sure to consider all the challenges and risks involved before taking the big step of owning the franchise.
Starbucks does not run on the franchise model. Instead, it offers licensing agreements to selected operators.
The initial investment is somewhere around $228,620 to $2,888,700 which can go higher.
Opening a Starbucks can be lucrative, but you need to understand the market needs. If the customers in your area have low purchasing power, Starbucks outlets will face a loss because of their premium price point.
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