The global coffee franchise market size was valued at $90.7 billion in 2021, and is projected to reach $200.3 billion by 2031, growing at a CAGR of 8.3% from 2022 to 2031.
A coffee franchise is a way to sell goods like coffee that involves a franchisor who creates the brand's trade name and business model and a franchisee who pays a royalty and frequently an upfront fee in exchange for the right to operate under the franchisor's name and system.
Globally, there is a growing demand for coffee franchises. Also, people are likely to seek out the high-quality food that is generally available in numerous franchisees. However, high-end coffee chains like Starbucks, Barista, and Café Coffee Day have captured the attention of the market for coffee franchises due to a variety of criteria like delicious cuisine, coupons, discounts, and profitable locations. Furthermore, in order to grow their popularity, well-known coffee franchisees place a strong emphasis on retaining customers and providing high-quality food. Brands also include a visit from their friendly staff, robust Wi-Fi, large windows that bring in natural light, wide areas, pristine toilets, and comfy chairs for their customers. One of the most important considerations for consumers when they buy various food items in this industry is the brand. Most customers will continue to buy coffee from premium brands because they are familiar with the name and know exactly what they are getting, even if the coffee shop next door sells higher-quality coffee for less money than the well-known brands. Thus, one of the factors in the growth of the coffee franchise sector has been the popularity of brands.
Besides with offering many different varieties of coffee, coffee franchises are well-known for their other premium brand food offerings. Whole-bean coffee is another well-liked commodity offered on the market for coffee franchises. Coffee contributes to revenue generation and increases coffee stock. In the coffee franchise sector, besides coffee, other hot beverages like tea are frequently consumed. Coffeeshopstartups.com estimates that 15% to 20% of orders come from the tea category. Customers who are concerned about their health have a wide range of options, including vegan food items, kosher foods, nutritional juices, nut-free food products, and gluten-free food products.
Players in this market are profitable in the coffee franchise industry of food delivery services. Furthermore, the busy schedules of consumers, who frequently are too preoccupied with their work schedules to prepare a meal, are one of the main causes for the rapid growth of the delivery system in the food sector. Various coffee franchises frequently work with outside delivery firms to produce delicious food. Several clients utilize apps to place orders for food and drinks from coffee chains so they may enjoy delectable food. To grow their consumer base, market participants use a variety of discount coupons, cash-back plans, and package deals. Moreover, pricing in the coffee franchise sector has a considerable impact on delivery methods and influences consumers' decisions to purchase meals online. Because the delivery system offers so many advantages, including affordable rates and a wide selection of food items, it tends to increase demand for coffee franchises with several locations.
However, franchises for coffee shops are among the most lucrative industries worldwide. The high startup costs for these franchises, however, are expected to make it difficult for new players to enter the coffee franchise industry. Also, some premium brands charge a larger franchise fee than opening new coffee shops across the globe. Investment also includes paying for initial operational expenses and assistance throughout the planning phase in addition to licensing fees. For some franchisees who want to open up in new locations, the cost of goods and equipment has also increased. Franchisees tend to pay significant royalty fees in order to operate coffee businesses. Also, some franchises charge extra for brand advertising and marketing; as a result, franchisees must make a significant expenditure to develop new coffee franchises in new locations. These factors are expected to restrain the expansion of the coffee franchise market demand globally.
Franchise business lacks independence as these enterprises have to totally depend on their franchisor. Franchisees must also follow all guidelines and instructions provided by the franchisor. The head office must be held responsible for every part of the franchise operation. As per the firm guidelines, uniforms, logos, advertisements, and precise colors must all be adhered to. The company's severe requirements and procedures have an impact on the franchisees' profitability as well. In certain coffee franchise businesses, raw ingredients and inventory are also kept consistent with other sites of the same business. Required orders from the firm’s head office might significantly affect the business of a given area as the varied region has different taste preferences and taste palettes. As a result, the lack of autonomy in the coffee franchise business tends to prevent coffee franchise market growth.
On the other hand, because of customer spending power, coffee franchises are more common in large cities. Also, coffee franchises are popular for their established business models, well-known brand names, built-in clientele, and genuine mentoring, training, and support. Due to the anticipated growth in metropolitan areas, franchisees prefer to open coffee franchises there. To scale the coffee franchise business, there are unexplored prospects in rural locations. Also, a big section of the population in rural areas provides growth potential in the coffee franchise business. The popular player has vast potential to offer an affordable product to capture remote areas across the globe. In addition, investment in technology, a strategy to extend the workforce, and product offers to suit the demand of the local location would assist to scale the firm. Consequently, players have extensive potential to scale the coffee sector to produce maximum profits across the globe in the coffee franchise market forecast period.
The coffee franchise business is a dependent business because of the agreement between the franchisor and franchisees. Moreover, the quantity of staff, inventory, and quality of raw materials should be maintained with respect to the company. In addition, there is a big possibility for the companies in the coffee franchise business to provide freedom to the franchisees to provide more quality products to their clients across the globe. Furthermore, participants in the industry might attain significant demand through effective methods using a flexible model in the coffee franchise across the globe. Also, market participants might generate enormous demand by employing efficient techniques and an adaptable business model for coffee franchises across the globe. To improve sales of the products depending on specific areas, the coffee franchise owners might create their own advertising and marketing strategy. As a result, the flexibility model in this business is projected to fuel the coffee franchise market sales during the projection period.
The discretionary nature of coffee franchises is making them some of the most adversely affected by the pandemic, especially in light of the combined effect of outlet closures and frugality as a result of the rapidly deteriorating economic environment. The consequences are being felt twice as much in player centers all across the world. With the stoppage of activities due to the pandemic, product sales in the coffee franchise market are impacted by low consumption. Since most economies are going into recession, the industries are imitating the situation from 2008 in anticipation of the recessionary consumer attitude and extremely frugal approach to fast food and beverages that would certainly follow the pandemic.
Additionally, it is anticipated that the coffee franchise market will continue to expand in the post-pandemic period. The market's active participants will use their inventions to develop new distribution channels for the coffee franchise business, which will help it attract customers and expand. Also, the expansion of the market will be facilitated by the rise in online penetration.
Also, the demand for coffee franchises is expected to grow quickly in the next year as a result of the return of all economic activity in the post-pandemic period. Additionally, it is anticipated that the market for coffee franchises will rise as active players introduce successful tactics, advertising campaigns, and marketing plans. The post-pandemic period will offer plenty of growth potential for the coffee franchise business as a result of these technological advancements as well as an improvement in the quality of coffee franchises and peripherals.
The coffee franchise market is segmented based on delivery type, cuisine, and region. Based on delivery type, the market is categorized into dine-in and dine-out. According to the cuisine, the coffee franchise market is fragmented into lunch, brunch, and coffee & bar. Region-wise, the market is analyzed across North America (the U.S., Canada, and Mexico), Europe (Germany, France, UK, Italy, Spain, Switzerland, and the rest of Europe), Asia-Pacific (China, India, Japan, South Korea, Australia, and the rest of Asia-Pacific), and LAMEA (Brazil, South Africa, UAE, Argentina, Saudi Arabia, and the rest of LAMEA).
By delivery type, dine-in had the highest coffee franchise market size in 2021 with a CAGR of 8.2%. In the coffee franchise business, food and drinks have a significant impact on how customers connect with the brand. Customers in this market are mostly drawn to it by the flavor and high quality of the food. Furthermore, tasty cuisine can make up for any inadequacies in the dine-in customer experience. Also, a coffee franchise's degree of customer care has a big influence on customers' decisions. By minimizing the time required to make orders and deliver them to customers on time, coffee franchise brands set themselves apart from one another. As a result, the dine-in component of the coffee franchise business is highly favored.
By cuisine, the coffee & bar had the highest coffee franchise market share in 2021 i.e., $42,601.2 million in 2021, and is expected to reach $96,826.7 million by 2031 at a CAGR of 8.6%. The coffee & bar division prepares specialty beverages in the dedicated coffee franchisees, such as espressos, macchiatos, and americanos, as well as various roasting and preparation techniques for coffee. Cafés, on the other hand, typically serve food as their primary course along with a few coffee beverages. Also, they are more inclined to provide full-service dining options. Coffee enjoys enormous appeal because of its many advantages, including its ability to increase productivity and foster workplace relationships. One of the key factors driving the expansion of the coffee franchise business is the comfort and relaxation that coffee & bar offers. As a result, the demand for coffee and bars is expected to rise in the forecast year and facilitate the coffee franchise market sales globally.
By region, Asia-Pacific holds the largest coffee franchise market share in 2021 i.e., $29,491.2 million in 2021, and is expected to reach $70,898.0 million by 2031 at a CAGR of 9.2%. In addition, there has been an increase in demand for coffee franchises as people seek out comfortable social settings. Also, one of the key factors contributing to the coffee franchise's widespread acceptance over the past 10 years is the warmth and comfort it may provide. This feeling is also amplified when contrasting coffee shops with competing businesses like restaurants, pubs, and fast-food chains. In addition, coffee franchises offer a unique, peaceful environment where individuals may gather with their loved ones to enjoy hot drinks and delectable meals. As a result, the Asia-Pacific area now offers a lucrative market for coffee franchises.
The market is being driven by factors such as rapid growth in infrastructural development as well as various advancements in developing countries. The major players operating in the global coffee franchise are Nescafe Coffee Shop, Café Coffee Day, Starbucks, Barista, Frespresso, Coffee-bike, Brewberrys Cafe, Euro Café, Ellianos Coffee, Café Barbera, Ziggi’s Coffee, Coffee Beanery, Dunn Brothers Coffee, The Human Bean, Xpresso Delight, Cafe2u, Biggby Coffee, Tim Hortons, Bottoms Up Espresso, Aroma Joe’s Coffee, Ritazza, Pacific Coffee, Greybox Coffee, Fisheye Café, Esquires Coffee, Costa Coffee, Gloria Jean’s, and Michel’s Patisserie.
Key Benefits For Stakeholders
- This report provides a quantitative coffee franchise market of the market segments, current trends, estimations, and dynamics of the coffee franchise market analysis from 2021 to 2031 to identify the prevailing coffee franchise market opportunities.
- The market research is offered along with information related to key drivers, restraints, and opportunities.
- Porter's five forces analysis highlights the potency of buyers and suppliers to enable stakeholders make profit-oriented business decisions and strengthen their supplier-buyer network.
- In-depth analysis of the coffee franchise market segmentation assists to determine the prevailing market opportunities.
- Major countries in each region are mapped according to their revenue contribution to the global market.
- Market player positioning facilitates benchmarking and provides a clear understanding of the present position of the market players.
- The report includes the analysis of the regional as well as global coffee franchise market trends, key players, market segments, application areas, and market growth strategies.
Coffee franchise Market Report Highlights
Market Size By 2031
USD 200.3 billion
CAGR of 8.3%
2021 - 2031
By Delivery Type
Key Market Players
Starbucks Coffee Company, Dunn Bros Coffee Franchising, Inc., Barista Coffee Company Limited, Ziggi’s Coffee, Brew Berrys Hospitality Pvt. Ltd, Xpresso Delight, LLC, Frespresso, Coffee Beanery, Cafe Barbera, Cafe Coffee Day, Nescafe Coffee Shop, The Human Bean, Ellianos Coffee Company
According to the top CXOs, Asia-Pacific is projected to witness the largest share during the forecast period owing to the growing penetration of coffee franchises in the region. The major emerging markets include the U.S., UK, Germany, France, and others. The increasing population summed up with a significant demand, rising disposable income, huge investment, and varieties of coffee franchises are the important factors that propel the growth of coffee franchise entities in emerging markets. Moreover, emerging markets are highly influenced by western culture, and hence there is an increase in coffee shops and coffee bars to provide convenience to the customers and it is becoming part of the culture in growing markets such as India and Brazil. Furthermore, Asia-Pacific is the leading destination for food and lodging which is the highest revenue generator in the food and beverages industry. Therefore, the growing penetration of coffee franchises as well as sports establishments are expected to fuel the growth of the winter activities market in emerging nations.
One of the primary drivers for the increase in demand for coffee franchise is the increased demand for delicious cuisine across the globe. Many new market players are expected to enter the coffee franchise market over the forecast period, attracted by profitable growth and high-profit margins.
Another factor that influences the demand for coffee franchises is the rise in demand for coffee franchises that enhance the dining experience across the globe. There is an increase in the demand for coffee franchise as customers seek for comfort places to hang out. Consequently, the demand for coffee franchise has seen a multifold increase in the past four years, especially in the developed countries of North America and Europe regions including but not limited to the U.S., Canada, the UK, and Germany. Hence, the growth of coffee franchise is expected to grow across the globe in the forecast period.