Coffee Franchise Report 2009

Franchise Direct recently conducted an in-depth study of the coffee franchise sector. After thoroughly examining 29 Franchise Disclosure Documents, Franchise Direct has found that the coffee franchise sector is weathering the recession resiliently, bolstered by a product that is an integral part of American life.

Despite an early dip at the beginning of the recession, this $11 billion a year industry continues to grow and diversify, according to the Franchise Direct study. With coffee consumption remaining constant in this declining economic climate, coffee franchises continue to be a worthwhile investment.

According the study, the coffee franchise industry remains extremely competitive at the top and fragmented at the bottom. Starbucks is the industry’s leading coffee chain, with over 16,000 stores worldwide. Because of the accessibility and popularity of coffee, a franchised approach, boosted by an established brand identity, continues to be one of the most profitable options to profit on this product.

One of the most reassuring reasons to invest in a coffee franchise is the enduring success of the beverage. The Franchise Direct study quotes a recent poll that shows that coffee consumption actually increased last year among the lucrative 25-to-39-year old demographic, while it remained steady amongst 40-to-59-year-old’s. As the recession continues, we can safely assume that the popularity of coffee will continue unabated.

Coffee franchises are also flexibly adapting to new American consumer habits. For instance, in recent years, there has been greater demand for environmentally-friendly products that do not exploit workers in the production process. Coffee franchises have been at the cutting edge of the Fair Trade movement, and with a range of organic goods, they are perfectly positioned to thrive on this developing $1billion industry.

The Franchise Direct study shows that location is the most important factor in a coffee franchise’s success. At the same time, mobile units or kiosks give prospective franchisees a low-overhead, high footfall alternative to the standard franchise unit arrangement.

Underpinning the recent success of coffee franchises is the growing popular consensus that coffee has a number of health benefits for drinkers. While perhaps once seen as unhealthy, coffee, as illustrated by authoritative studies conducted by researchers at Harvard and UCLA, clearly has health incentives.

People exploring franchises for sale will find that coffee franchises sell a product with broad public appeal that is seamlessly adapting to American consumer trends towards healthiness, social responsibility, and environmental sustainability.