Seattle’s Best Coffee

Date of Incorporation: 1970

Franchising Since: 1994

Headquarters: Seattle, Washington

 

Business and Description: The franchisor is Seattle’s Best Coffee (SBC), a subsidiary of Starbucks Corporation. SBC franchises retail cafes and kiosks specializing in the sale of proprietary Seattle's Best Coffee brand coffee beverages and related products. SBC also sells coffee and related specialty products at wholesale and by mail order.

 

Franchise Offer: The franchises offered are retail cafes, kiosks and drive-thrus to be operated under the franchisor’s business and operating procedures. SBC Cafes are typically located in central business districts, office buildings, urban/residential “store-front” locations, specialty shopping centers, colleges and universities, and major transportation hubs such as highway travel plazas, major airports, train stations and ferry terminals. SBC Kiosks are typically located in malls, office buildings or other alternative locations experiencing high pedestrian traffic. SBC Drive-thrus are typically located on high vehicle traffic corridors that can also leverage multiple business generators such as retail districts-large corporate facilities, institutions (i.e. school campus. federal /state/city buildings, hospitals and tourist attractions.

 

Financial Assistance: SBC does not offer direct or indirect financing nor does it guaranty the franchisee’s notes, leases or other obligations.

 

Training and Assistance: The franchisee (or an operations manager or other representative designated by the franchisee and approved by the franchisor) must successfully complete the required Franchise Business Management Training Program at least 15 weeks prior to the opening of the franchisee’s first SBC Unit. Each person who successfully completes this program will be designated as an “SBC Certified Franchise Business Manager.” The Franchise Business Management Training Program consists of learning experiences conducted in an SBC Certified Training Café. This is typically conducted at corporate headquarters and SBC Certified Training Cafes in Seattle, Washington, or other locations as the franchisor may designate. At least one management employee for each SBC Unit developed must successfully complete the required SBC Advanced Cafe Training (ACT) program prior to the opening of an SBC Unit. Each person who successfully completes the ACT Program will be designated as an “SBC Certified Manager.” Also, for each SBC Unit, a management employee and six or more other employees must complete the Barista Basics Training program (Barista Basics) prior to opening the franchisee’s first SBC Unit. SBC may periodically conduct an annual conference, convention or training session, and if it does, it will determine its duration, curriculum and location. The franchise (or an Operations Manager designated by the franchisee) and the managers of each SBC Unit must attend each annual conference, convention or additional training session.

 

Territory: The franchisee may only operate the SBC Unit from or at the location the franchisor has accepted and may not relocate the SBC Unit without prior written consent, which SBC is not obligated to grant. The franchisee will not receive an exclusive territory. The franchisee may face competition from other franchisees, from outlets owned by SBC, or from other channels of distribution or competitive brands SBC controls.

 

Term of Agreement and Renewal: The length of the initial franchise term is 10 years from the date of commencement of operation of the SBC Unit. There is one renewal term of 10 years available for each SBC Unit.

 

Obligations and Restrictions: The SBC Unit must at all times be under the direct on-premises supervision of the franchisee or another SBC Certified Manager whom the franchisee designates to have primary responsibility for its operation. The franchisee must maintain the required number of ACT program certified managers on staff. The franchisee may offer for sale only products and menu items that meet the franchisor’s standards and that have been approved in writing. The franchisee also must offer for sale all menu items that the franchisor specifies in the Manual or otherwise in writing.

 

Estimated Number of Units: 100

 

Investment Tables:

Initial Investment

For SBC Café

Name of Fee Low High
Franchise Fee $25,000
Real Estate and Leasehold Improvements Variable
Design and Development Fee $2,000 $6,500
Casework $55,000 $95,000
Equipment, Furniture and Signs $80,000 $150,000
Opening Supplies and Inventory $10,000 $20,000
Initial Promotional Supplies and Inventory $2,000 $3,000
Security Deposits $5,000 $12,000
Business Licenses and Professional Fees $2,000 $10,000
Point-of-Sale System $15,000 $22,000
In Café Guest Internet Access (per month) $125
SBC Card Services $300 $800
In Café Music Services Program (per month) $33
Grand Opening Promotion $7,500
Initial Training & FBMT Training $4,250 $7,150
Utility Deposits $2,000 $3,000
Insurance $2,000 $5,000
Site Evaluation $3,000 $4,000
Additional Funds - 3 Months $50,000 $75,000
Estimated Total Investment (excluding Real Estate and Improvements) $265,208 $446,108

For SBC Kiosk

Name of Fee Low High
Franchise Fee $25,000
Real Estate and Leasehold Improvements Variable
Design and Development Fee $2,000 $6,500
Casework $35,600 $105,000
Equipment, Furniture and Signs $20,000 $100,000
Opening Supplies and Inventory $10,000 $20,000
Initial Promotional Supplies and Inventory $2,000 $3,000
Security Deposits $3,500 $12,000
Business Licenses and Professional Fees $2,000 $10,000
Point-of-Sale System $8,700 $15,000
In Café Guest Internet Access (per month) $125
SBC Card Services $300 $800
In Café Music Services Program (per month) $33
Grand Opening Promotion $7,500
Initial Training & FBMT Training $4,250 $7,150
Utility Deposits $2,000 $3,000
Insurance $2,000 $5,000
Site Evaluation $3,000 $4,000
Additional Funds - 3 Months $50,000 $75,000
Estimated Total Investment (excluding Real Estate and Improvements) $178,008 $399,108

 For SBC Drive-thru

Name of Fee Low High
Franchise Fee $25,000
Real Estate and Leasehold Improvements Variable
Design and Development Fee $3,800 $5,000
Casework $114,000 $130,000
Equipment, Furniture and Signs $120,000 $140,000
Opening Supplies and Inventory $10,000 $20,000
Initial Promotional Supplies and Inventory $2,000 $3,000
Security Deposits $5,000 $12,000
Business Licenses and Professional Fees $2,000 $10,000
Point-of-Sale System $15,000 $25,000
In Café Guest Internet Access (per month) $0 $125
SBC Card Services $300 $800
In Café Music Services Program (per month) $0 $33
Grand Opening Promotion $7,500
Initial Training & FBMT Training $4,250 $7,150
Utility Deposits $2,000 $3,000
Insurance $2,000 $5,000
Site Evaluation $4,500 $22,900
Additional Funds - 3 Months $50,000 $75,000
Estimated Total Investment (excluding Real Estate and Improvements) $367,350 $491,508

 

Ongoing Fees

Type of Fee Amount
Royalty 4% of Gross Revenue from each SBC Unit
Advertising Fee 2% of Gross Revenue of each SBC Unit
Transfer Percentage of then-current full Franchise Fee, variable based on years the SBC Unit has been open.
Design Fees Upon Refurbishment Will vary under circumstances
Insurance Costs and premiums
Audit (by franchisor) Cost of audit
Interest on Understated Sales 12% per annum or the maximum rate permitted by law, whichever is less
Interest on Overdue Payments 12% per annum or the maximum rate permitted by law, whichever is less
Costs and Attorneys’ Fees Will vary under circumstances
Indemnity Will very under circumstances
Transaction Fee for SBC Card $0.07 for each purchase made using the SBC Card at the franchisee’s SBC Unit.
Payments for Approval of Suppliers & Distributors SBC currently does not charge fees, but reserves the right to do so. The franchisee will be responsible for the costs of any testing required.
Additional Training $600 per day

The above information has been compiled from the FDD of Seattle’s Best Coffee.

Year of FDD: 2012

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