Caribou Coffee Franchise Costs, Fees & FDD

Year Business Began: 1992

Franchising Since: 2004

Headquarters: Minneapolis, Minnesota

Estimated Number of Units: 835

Franchise Description: Caribou Coffee Development Company, Inc. is the franchisor. Caribou Coffee Company, Inc. (CCC) is the franchisor’s corporate parent and predecessor. The franchisor offers franchises for the establishment and operation of “Caribou Coffee” businesses that specialize in fresh roasted coffee beverages and baked goods for on-premises and carry-out consumption, as well as related sales of retail items in a modern, technical environment. Coffeehouses will be operated from an indoor structure that need not be free-standing and decorated to meet the franchisor’s specifications (including the use of its trade dress, trademark, and design). The franchisor offers three types of franchises for the operation of coffeehouses at agreed-upon locations: “chalet” and “cabin” coffeehouses that are operated at stand-alone or more traditional locations, and “kiosk” coffeehouses that are typically operated at non-traditional facilities.
Training Overview: Franchisees must designate at least one individual they select, and the franchisor approves, who will be trained as a “Certified General Manager” for the coffeehouse, and who must attend and successfully complete the Certified General Manager Training Program. The individual must be responsible for the daily operations of the coffeehouse and oversee the training of coffeehouse personnel. The Certified General Manager training program is 240 hours and will take 30-45 days (approximate) to complete. Training will take place at the franchisor’s training center in Minneapolis, Minnesota, or at a certified training coffeehouse that it designates. The franchisor may require franchisees, at their expense, to send their Certified General Manager(s) and additional personnel to be trained to other training course seminars, and other training programs it may reasonably require at the times and locations that it designates. The franchisor may periodically request that franchisees attend certain meetings or conventions and pay a reasonable fee (if the franchisor charges a fee) for each person who is required to attend (and, if applicable, additional attendees that franchisees choose to send as well).

Territory Granted: Under the Franchise Agreement, franchisees have the right to establish and operate one coffeehouse at a specific accepted location. After an accepted location has been agreed upon, the franchisor will determine whether there will be an area surrounding that location that will be granted certain protections. Not all franchisees will be granted a protected territory. If the franchisor grants a protected territory, then during the term of the Franchise Agreement, it will not operate, nor will it grant to any other party the right to operate, a coffeehouse within the protected territory (so long as the franchisee and the franchisee’s affiliates are in compliance with the terms of the Franchise Agreement and any other agreements with the franchisor and its affiliates relating to any coffeehouses). If the franchisor grants the franchisee a protected territory, the size of the protected territory will be based on a number of factors, such as the character of nearby businesses, drive times, demographics, and other physical and commercial characteristics of the location and trade area.

Obligations and Restrictions: The Franchise Agreement requires that franchisees (or the operating owner or one of the designated management personnel who will assume primary responsibility for the franchise operations and who the franchisor has previously approved in writing) must devote full time, energy, and best efforts to the management and operation of the franchised business, and must successfully complete the initial training program. The franchised business must be managed at all times by franchisees (or their operating owner or certified general manager) or by a manager who has completed the initial training program to the franchisor’s satisfaction. Franchisees must offer and sell only those goods and services that the franchisor has approved. The franchisor may set reasonable restrictions on the maximum and minimum prices franchisees may charge for the products and services offered at the franchised business.

Term of Agreement and Renewal: The length of the initial franchise term is 10 years. Renewal of the term is for two additional five-year terms by signing the then-current Franchise Agreement (which may contain terms and conditions materially different from those in the original agreement), subject to contractual requirements.

Financial Assistance: The franchisor does not offer direct or indirect financing. The franchisor does not guarantee a franchisee’s note, lease, or obligation.

Estimated Initial Investment

Name of Fee	Low	High
Architecture and Design Fees	$5,000	$50,000
Leasehold Improvements/Construction Costs	$45,000	$575,000
Furniture, Fixtures & Equipment	$155,000	$490,000
Signage	$5,000	$80,000
Initial Franchise Fee	$7,000	$30,000
Lease	Varies
Business Licenses and Permits	$100	$2,000
Initial Inventory	$10,000	$20,000
Technology Costs	$24,000	$39,000
New Store Opening Launch Program	$3,000	$15,000
Professional Fees	$5,000	$25,000
Initial Training Expenses	$3,000	$9,000
Additional Funds – 3 months	$17,000	$94,000
ESTIMATED TOTAL (excluding lease)*	$279,100	$1,429,000

*The estimated initial investment range covers from a kiosk up to a chalet.

Other Fees

Type of Fee	Amount
Royalty Fee	Cabin and Chalet: 5% of gross sales. Kiosk: 6% of gross sales (4% of gross sales for kiosks located in non-traditional facilities that are an airport, university, or hospital location).
Minimum Royalty Fee	$6,000 per year.
Marketing Contribution	Up to 3% of gross sales.
Supplier/Vendor or Supplies Approval	Cost of inspection of supplier’s facilities and/or test of supplier’s samples, plus the franchisor’s reasonable related costs and expenses to certify.
Product and Equipment Purchases	Will vary.
Interest	Interest is 1.5% per month on missed, overdue, or insufficient payments.
Renewal Fee	Cabin and Chalet: Greater of $15,000 or 50% of the then-current initial franchise fee. Kiosk: Greater of $1,500 or 10% of the then-current initial franchise fee.
Transfer Fee	Greater of $15,000 or 50% of the then-current initial franchise fee (or any additional amounts necessary to compensate the franchisor for its costs incurred in connection with the transfer), plus any applicable broker fees.
Securities Offering Fee	$10,000 (or the franchisor’s reasonable costs and expenses, if more).
Relocation Fee	Franchisees must reimburse the franchisor for the costs and expenses it incurs in connection with reviewing, approving, and documenting the relocation to a new location.
Insurance	Actual costs.
Additional Training and On-site Assistance	The then applicable fee per diem training charges (currently $500 per day), plus the trainer’s out-of-pocket expenses (travel, hotel and living expenses).
Conference Fees	The then current conference fee, currently $1,000 per attendee, as well as the franchisee attendees’ expenses (travel, per diem, and hotel expenses).
Technology Fee (Computer Systems, Maintenance and Support)	Cost of services (the franchisor estimates approximately $500 - $1,000 per month).
Tech Vendor Fees	Variable.
Re-inspection Fee	$1,500
Examination/Audit Fee	If gross sales are understated by 2% or more, the franchisee pays the franchisor’s audit costs, plus interest on understated amounts.
Lost Future Royalties	The average of the monthly royalty fees due for the previous 12 months, multiplied by the lesser of 36 or the number of months remaining in the then-current term of the Franchise Agreement.
Indemnification	All costs and expenses, including attorneys' fees.
Cost of Enforcement or Defense	Will vary under circumstances.

The above information has been compiled from the FDD of Caribou Coffee. Year of FDD: 2025.
Franchise Direct's Disclaimer