Dutch Bros franchise is a well-known coffee chain with over 400 locations, most of which are in the western United States. The specialty and iced drinks, rather than the regular cup of coffee, draw the crowd to Dutch Bros. Read through If you want to the cost of opening a Dutch Bros franchise.
How to Start a Dutch Bros franchise?
1. Make Sure You Have Enough Capital
To start the Dutch Bros restaurant, you must have $150,000 in liquid capital.
2. Consider the Initial Investment Needed for a Coffee Shop Business
Building and property investment costs, the cost of equipment and signs, the cost of licenses and permits, the cost of uniforms, insurance premiums, and so on must all be considered.
3. Consider Your Previous Experience and Strengths
Before applying to be a Dutch Bros franchise owner, you should carefully consider your previous business experience.
4. Examine the Market’s Availability
Before proceeding with the franchising application, check the market availability for Dutch Bros franchises and see if there are any available markets in your area of interest.
5. Submit an Application
The Dutch Bros franchise team will review your application. Upon receipt of your online application, you will be emailed a confirmation receipt, along with the franchise owner’s contact information.
6. Get Approval and Start Your Dutch Bros Franchise
Once your financial and history check is completed, Dutch Bros will grant you franchise approval. Only candidates who meet all of the criteria of Dutch will be given approval.
How Much Does it Cost to Open a Dutch Bros Franchise?
Dutch Bros is open to franchisees who are already associated with the coffee franchise. This only applies to existing franchisees and employees.
The franchise fee is $30,000, with an initial investment of between $150,000 and $500,000. $150,000 in liquid cash is required.
Dutch Bros made a wise decision by restricting this franchise opportunity to current franchisees or employees. If you intend to invest between $150,000 and $500,000 in liquid capital, I believe it would be helpful for you to first work within a Dutch Bros.
This practical work experience will provide you with a wealth of insight into the day-to-day processes of this business, as well as an understanding of the clientele and beverage line.
As a Dutch Bros employee, you will not only learn a lot but you will also be paid to determine whether you want to invest.
However, you cannot join Dutch Bros as a barista for a few months and expect to be to invest after only a few weeks of training. You must work a minimum of three years in a Dutch Bros franchise location, with at least one year as a manager.
On the plus side, after three years of paying your dues, you should have a good idea if you want to join the coffee franchise. That, I suppose, is the point.
In today’s franchise report, I evaluate the Dutch Bros coffee shop’s profitability and outline the criteria you should be conscious of before opening the business. Below is a breakdown of the information I’d like you to know before opening.
Dutch Bros’ Financial Requirements and Fees
Before deciding on a franchise, sit down and research the total cost of the business, including fees. Some franchise opportunities may have low franchise fees but may have hidden costs such as payroll fees, technology fees, or training fees.
Don’t rush through assessing costs, and if possible, reach out to current franchisees to get their perception of running the business.
This not only helps you prepare for what’s ahead but also allows you to determine whether the possibility fits your budget and evaluate whether you’ll be able to make a profit after expenses.
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You might also wonder if Dutch Bros charges a recurring royalty fee. Dutch Bros charges a monthly royalty fee of 5% of gross sales, or $1,300. Every month, the corporate office will collect the larger amount.
Simply put, royalty fees are like the membership fees you’ll be paying to Dutch Bros in order to stay a franchise operator in good shape. This fee is distinct from the franchise fee.
Annual Average Sales / Revenue
With only 328 locations, Dutch Bros has projected annual revenue of $494 million in sales. This means the average revenue per store was around $1.5 million in sales revenue per unit.
Dutch Bros saw a 7.7% increase in sales in 2020. It’s safe to say that the drive-thru model aided this franchise during a difficult period. To give you an actual example of potential beverage sales volume, in 2018, an operator of Dutch Bros confirmed selling around 1,500 drinks daily.
According to Forbes, Dutch Bros is the “largest privately owned coffee chain” in the United States. In 2020, they plan to open 53 new locations, which will contribute to sales growth although many other businesses are slowing.
In short, Dutch Bros was designed to thrive in an environment where on-site dining options are limited or non-existent. This remains an appealing aspect of the business operations, as there are still many customers who do not feel at ease dining in close quarters.
Facts About Dutch Bros Franchise
Dutch Bros is only open to franchisees who are connected to them, which includes current franchisees and employees. Aside from the fees cited above, the requirements are:
- The staff must be current Dutch Bros employees.
- The employee must have worked for them for at least three years and have at least one year of management experience.
- The staff must have a credit score of at least 675.
- A 250-word written essay explaining why the employee wants to franchise a Dutch Bros. must be submitted.
- In addition, a short video essay explaining the staff’s personality must be submitted.
You’re probably wondering if you can own a Dutch Bros. franchise if you’re not an employee. You simply cannot unless you know someone who has been approved to franchise it and you wish to invest in their operations. Basically, you’d have to apply for a job with them first.
But, if you consider it, this is precisely why Dutch Bros is such a popular and successful chain: everyone who owns it has firsthand knowledge of what it’s like to work with them before opening their own franchise.
This means that the franchisee is already acquainted with the work environment and is aware of the Dutch Bros service.
How Much Profit Does Dutch Bros Make?
According to 2018 figures, a Dutch Bros store earned more than $1.5 million in revenue.
The estimated yearly profit of a franchise owner is estimated to be $124,000. However, keep in mind that the location and management can influence these figures.
The Benefits of Owning a Dutch Bros Franchise
Assuming you can franchise a Dutch Bros, the following are the benefits of running this well-known coffee shop:
When you franchise a Dutch Bros., you don’t just get a simple coffee menu. Cold brews, shakes, smoothies, energy drinks, and even baked treats like granola bars and muffins are available. Dutch Bros is an interesting cafe because your customers can choose from a variety of drinks.
Most Dutch Bros locations have a drive-thru. It’s what made them famous. People can get high-quality, delectable coffee even without leaving their cars.
Some Dutch Bros spots are open 24 hours a day, seven days a week. Your shop can serve individuals who are looking for a good coffee shop late at night or early in the morning. You can get sales that other brands miss out on because they are closed if you are always open.
3. Dutch Rewards
However, beginning in April 2021, Dutch Bros will no longer accept stamp cards but will continue to offer rewards through their app. This simply makes it simpler for customers to keep track of their rewards. This is undoubtedly a reaction to the popular and profitable Starbucks app.
The Dutch Bros rewards program is an excellent way to keep customers coming back for more drinks. Few coffee shops provide such a fun and engaging reward.
The Difficulties of Running a Dutch Bros Franchise
Businesses present challenges, and even a long-standing franchise like Dutch Bros will present its own set of difficulties. Here are a few examples:
For franchises, Dutch Bros has high expectations. As a result, if they realize that your franchise is underperforming, they will buy it out.
In case you haven’t heard, there is a labor shortage in the food service industry. Depending on the location, it may be difficult to find qualified candidates. I believe Dutch Bros is viable and allows staff to accept tips as an additional incentive.
3. Franchise Requirements
The criteria for starting a Dutch Bros franchise can be challenging. One of them is to be one of their employees. That seems to take up a lot of your time since all you want to do is start a business rather than put in more hours.
Frequently Asked Questions
Dutch Bros is an excellent cafe franchise for someone with a larger budget and the ability to put in far more hours and effort.
They have an appealing menu and a rewarding program that may entice customers. Dutch Bros also supports several foundations, which you as a businessperson can be proud of.