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Scooter’s Coffee Franchise Cost & Fees

Date of Incorporation: 1998

Franchising Since: 2001

Headquarters: Omaha, Nebraska

 

Business and Description: Scooter’s Coffee, LLC is offering franchises for the right to operate a quick service coffee store, or quick-serve coffee and yogurt store, offering drive-through, carry-out and in-store seating service of espresso drinks, smoothies, baked goods, frozen yogurt and other items.

 

Franchise Offer: The following are the four types of stores currently being offered:

  • Type 1 - Drive-Up Kiosks: Although it has been updated and changed throughout the years, the original store design is the drive-up kiosk, which has included some changes, including size and configuration. There is no seating, and sales are primarily of drinks served through drive-up windows. They are usually located in a parking lot near other retail shopping.
  • Type 2 - Coffeehouse with or without Drive-thru: These are generally spaces located in a strip center and are known as "inline space" or “end cap space,” or they are free-standing buildings with inside seating. Type 2 stores may have a drive-up window to service mobile customers, plus some inside seating to accommodate walk-in customers. Type 2 stores typically sell coffee and frozen yogurt in the same space.
  • Type 3 – Specialty: These stores are carts or small spaces located in specialty locations (e.g. airports and business atriums), but are also located within other businesses such as hospitals or large office buildings.

 

Financial Assistance: Neither Scooter’s Coffee nor its affiliates offer, either directly or indirectly, any financing to franchisees, nor does Scooter’s Coffee guaranty any note, lease or other obligations for franchisees. Scooter’s Coffee does not receive any benefit, monetary or otherwise, from any recommended lender. Scooter’s Coffee cannot estimate whether franchisees will be able to obtain financing for any part or all of their investment and, if so, the terms of the financing, which will depend on their credit worthiness and other characteristics. Scooter’s Coffee does not have any past or present practice or intention to sell, assign or discount to any third party, in whole or in part, any note, contract or other instrument signed by franchisees.

 

Training and Assistance: The franchisee and any Designated Manager of theirs must attend and complete to the franchisor’s satisfaction the initial training program. All training is currently conducted in the Omaha, Nebraska metropolitan area, and lasts approximately 10 days, taught on business days normally over the course of two weeks. The training material consists of written, visual or videotaped instruction, and hands on training in an operating Scooter's Coffeehouse store. This training is typically 40-50 hours of in-class instruction and 50-60 hours in-store instruction. Between one and four times per year, the franchisee or Designated Manager may be required to attend, a national, regional or local meeting, seminar or conference which Scooter’s Coffee presents for the purpose of discussing a topic such as advertising programs, new operations methods, training, management, sales, or sales promotion.

 

Territory: The franchisee will not receive an exclusive territory. The franchisee may face competition from other franchisees, from outlets that owned by the franchisor, or from other channels of distribution or competitive brands that the franchisor controls.

 

Term of Agreement and Renewal:The length of the initial franchise term is 10 years. There is an option to renew for an additional 10-year term if the franchisee meets requirements.

 

Obligations and Restrictions: The franchisee is not required to personally manage and operate the store. The franchisee, or the Designated Manager, must successfully complete the mandatory initial training program. The franchisee is not required to serve as the on-premises manager. All Designated Managers throughout the term of the Franchise Agreement must successfully complete the initial training program. The franchisee may sell only those products and services approved by the franchisor and may not use the Scooter’s Coffeehouse store or the franchised location for any purposes other than the operation of a Scooter’s Coffeehouse store. The franchisee may not fill “wholesale orders,” sell products or services off premises, by mail order or through catalogs or the Internet, or transship or reship products. The franchisee must sell all of the products and services approved by the franchisor, including promotional items.

 

Estimated Number of Units: 125

 

Investment Tables:

Initial Investment

Drive-up Kiosk

Name of Fee Low High
Initial Franchise Fee $40,000 $40,000
Marketing Escrow Fund Contribution $0 $10,000
Leasehold Improvements $160,000 $235,000
Equipment, Fixtures and Furniture $25,000 $30,000
Signs $10,000 $20,000
Point-of-Sale System and Software $5,000 $15,000
Deposits and Licenses $2,500 $7,500
Initial Training: Travel and Living Expenses $2,000 $4,000
Opening Inventory and Supplies $3,000 $7,000
Additional Funds (3 Months) $15,000 $25,000
Estimated Total $272,500 $393,500

 

Coffeehouse (with or without Drive-thru) and Large Shopping Mall

Name of Fee Low High
Initial Franchise Fee $40,000 $40,000
Marketing Escrow Fund Contribution $0 $10,000
Leasehold Improvements $120,000 $170,000
Equipment, Fixtures and Furniture $70,000 $110,000
Signs $10,000 $20,000
Point-of-Sale System and Software $5,000 $15,000
Deposits and Licenses $2,500 $7,500
Initial Training: Travel and Living Expenses $2,000 $4,000
Opening Inventory and Supplies $3,000 $7,000
Additional Funds (3 Months) $15,000 $35,000
Estimated Total $227,500 $398,500

 

Specialty

Name of Fee Low High
Initial Franchise Fee $40,000 $40,000
Marketing Escrow Fund Contribution $0 $10,000
Leasehold Improvements $1,000 $100,000
Equipment, Fixtures and Furniture $25,000 $47,500
Signs $1,000 $10,000
Point-of-Sale System and Software $5,000 $15,000
Deposits and Licenses $2,500 $7,500
Initial Training: Travel and Living Expenses $2,000 $4,000
Opening Inventory and Supplies $3,000 $7,000
Additional Funds (3 Months) $15,000 $25,000
Estimated Total $104,500 $266,000

 

Other Fees

Type of Fee Amount
Royalty Fee 6% of Gross sales.
Advertising Contribution 2% of Gross sales.
Marketing Escrow Fund Contribution Up to $10,000
Local Advertising Commitment None currently, provided that the franchisor may require franchisees to spend an additional minimum of 2% of Gross Sales for local advertising.
Regional Advertising Co-ops May vary, with recurring contributions up to 3% of Gross Sales.
Cost of Advertising and Promotional Materials Varies depending on the type of promotion and the type of materials used in the promotion.
Inventory Purchases from Franchisor or Affiliate Varies according to sales volume.
Interest and Late Charges $25 late charge, plus the lesser of 1.5% per month, or highest rate of interest allowed by law.
Transfer Fee $8,000 Transfer Fee. If the franchisee sells his/her agreement(s) to an existing Scooter's franchisee, the franchisor will waive this fee.
Successful Renewal Fee $5,000 or 25% of the then current Initial Franchise Fee for the first Store, whichever is greater.
Inspection and Audit Fee Interest on past due amount at 18%, or highest rate of interest allowed by law plus costs of audit.
Training Program Expenses Costs associated with attending mandatory training session.
Alternative Supplier Approval Fee Reasonable cost of evaluation of potential alternative supplier.
Costs and Attorneys' Fees Will vary depending on nature of the franchisee’s default.
Indemnification Will vary depending on nature of the claim against the franchisor.
Insurance Premiums Will vary depending on the franchisee’s location and insurer.
Relocation Fees Minimum of $500 up to a maximum of $1,000 depending on expenses incurred by the franchisor.
Fee for Training Additional People $500 per person.

The above information has been taken from the FDD of Scooter’s Coffee. Date of FDD: 2015

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