Coffee House Franchise Business Proposal

A coffee house franchise proposal is a document prepared by a company, which is interested in starting a franchise of the coffee house. This proposal can be presented to a potential investor or a coffee house company. It needs to include all the relevant details as well as the wooing and convincing arguments for increasing the chances of its acceptability. It can be used by the company to market and promote itself.

Sometimes, the coffee houses are running successfully and have ample funds available at hand, but due to some reasons, they are not opening new franchisees themselves. In this case, if a viable proposal is presented to them, they might accept it and allow the company to use its brand name and run the franchise.

The general information that needs to be included in a coffee house franchise proposal includes:

Executive summary.
Introduction/company profile.
Details of the coffee house franchise, including location, size, number of staff members, menu, success probability, future trends, etc.
Costing and required capital, including expenses, investments, sales forecasts, breakeven, profit generation, etc.
Royalty payments, including schedule and amount, if applicable.
Company’s competitive edge, experience and expertise.
Wooing statements.
Benefits to the investor or coffee house, including mutual benefits, if applicable.
Exit strategy in the case of failure.
Terms and conditions.

If the proposal gets accepted and the contract gets signed, the company can move forward with its idea of the coffee house franchise and attempt to run it as a successful business. In the opposite scenario, the company would seek other investors.

Sample Proposal Template

Executive Summary

ABC is one of the top growing franchises in the United States. Our company wants to invest in ABC franchise Coffee house business and we want to open a branch in North Portland, on XYZ Street. We think this will be an ideal location for it as there are many offices and Universities nearby. Hendry Harrison and I have been in the food industry for more than a decade. Having a deep understanding of the Food Service Industry, we have high quality and cleanliness standards and we are certain that this new branch of ABC will definitely contribute hugely to the growth of the business.

Company Introduction

ABC celebrates the rich culture of coffee and provides its customers with the best coffee experience. It is one of the top coffee houses in America. Their specialty is their highest quality coffee and the selection of premium teas. ABC uses the top quality beans and high standards of preparation. The extraordinary taste and class are clearly evident in their business growth. At present, ABC has more than 30 branches across the United States and around the globe. The company headquarters is in Los Angeles, California.

Products

ABC is known for its delicious and flavorful coffee, but they also serve many other items; sandwiches in various varieties and a few scrumptious bakery items, but their main focus is coffee. Our branch will also sell all these products. The list is provided below:

Drinks

Sizes: 3

Small
Medium
Large

Variety:

Hot coffees
Cold coffees
Hot tea
Iced teas
Hot drinks

Food

Bakery
Breakfast
Snacks
Custards

Opportunity

XYZ Street is a very lively and trendy place. There are a few shopping centers and retail stores on the street. A lot of universities are beside the road and the footfall on this street is very decent. ABC must explore this area to get a big share of the market as there are not many cafes serving good quality coffee in this zone. According to our survey, people are waiting anxiously and excitedly to try new places to sit and relax and enjoy coffee. XYZ will bring in the initial investments to start up the new branch of ABC and would be working on the project pro-actively and simultaneously sharing ideas and resolving issues together with ABC Company. Our aim is to

Open the first branch of ABC in this community
Gain profitability and extend the franchise brand nationally and internationally

Management/Staff

Our team has experience of more than 10 years in the Foodservice business.

Owner:             Hendry Harrison
Experience:      Food Industry
Time:               10+ years
Qualification:   MBA from the University of Illinois, 2010

Owner:             James Charles
Experience:      Food Industry
Time:               10+ years
Qualification: BS from the University of Chicago, 2009
Worked at various coffee houses.

Manager:          Robert Johns
Experience:      Food Industry
Time:               5+ years
Qualification: BS from the University of Chicago, 2008
Certification of Hotel Management

Summary Financials

I and my partner will bring in all the investment, including the start-up cost and the running cost. We will invest a total of $100,000 in your franchise. We will pay the royalties or the Franchise fee to ABC. Your company can work up a practical fee amount and let us know about the details.

Market Analysis

Our target market consists of students, tourists, office workers, and families in northern Portland. There are more than 25,000 people living in this region. Drinking in and takeaway coffee is becoming more and more common these days. The first thing people drink in the morning is coffee. Coffeehouses provide the convenience of instant takeaways, so families and friends can enjoy food during the commute or before starting the day. We believe there is a need for a genuine and tasteful coffee house in this area and ABC is going to serve just that.

Marketing Strategy

Our goal is to become the largest coffee shop in the region and gain the biggest amount of customers.

We will be focusing on the following

To provide freshly prepared coffee and comfort food
To be the best coffee shop in the region
Create such an outlet that provides our consumers with a place to socialize and share their joy.

Marketing

We will work with ABC Company’s comprehensive marketing plan and you can provide us the outline which we can follow to prepare for marketing on the regional level. Meanwhile, the following is what we have in mind:

Distribute and place flyers in the surrounding shops and communities.
We will offer discount vouchers offering different promotions
A big launch party at the coffee shop for the opening night
Offer 25% off during the first week
Offer free muffin with every serving of coffee for the first month

Timeline

Steps	Description	Time
Proposal Acceptance	Both the parties will sign the contract	1 week
Approvals	Get all the necessary approvals and permissions. Get the approval of the coffee shop design.	2 weeks
Construction	Construction of the coffee shop	10-12 weeks
Order Equipment	Order all the cooking, serving, brewing equipment for the coffee shop	2-3 weeks
Employee Training	Employees will be trained by the franchise company trainers	3-4 weeks
Opening	Opening of the ABC coffee shop branch	1-2 days

Start-up Cost

We would like to invest $100,000. An estimated amount of start-up expense detail is provided below:

Names	Cost
Legal paperwork	$1,000
Marketing	$1,000
Restaurant construction	$20,000
Insurance	$4,000
Facilities	$10,000
Equipment	$10,000
Stationary /Menus/Flyers	$2,000
Crockery	$10,000
Inventory	$20,000
Cash	$5,000
Miscellaneous	$1,000
Total	$84,000

Profit and Loss Statement

Below we provide the projected Profit and Loss Statement for the next 2 fiscal years.

Revenues

Coffee Sales: $50,000

Food Sales: $20,000

Total: $70,000

Expenses

Cost of goods: $10,000

Salaries: $12,000

Rent: $6,000

Utilities: $1,500

Total: $29,500

Net Income: $40,500

Terms and Conditions

All purchases made will be first approved by the ABC Company.
This document should not be disclosed to any third party without the consent XYZ Company.
Monitoring the customer base and sales will be the responsibility of ABC.