Aroma Joe’s Franchises: $855K Sales (+ 2023 Costs & Profits)

If you’re considering investing in a coffee franchise, you may want to look at Aroma Joe’s. With 70 locations in the US, it may not be as big as large chains like Scooters Coffee or Biggby Coffee, yet it’s definitely a profitable one.

Indeed, the investment of $665,000 to open a new location is attractive in comparison with the Average Unit Volume of $855,000. We found that the payback period is on average 5 years which is very good for a coffee chain.

How much does it really cost to open a new Aroma Joe’s coffee shop? How much profits can you realistically make with this franchise? Let’s find out!

Aroma Joe’s franchises: key figures

Franchise fee	$25,000
Royalty fee	8.0%
Marketing fee	3.5%
Investment (mid-point)	$665,000
Average sales	$855,000
Sales to investment ratio	1.3x
Payback period*	5 years
Minimum net worth	$350,000
Minimum liquid capital	$150,000

What is Aroma Joe’s?

Aroma Joe’s is an American fast-casual restaurant chain based in South Portland, Maine.

The chain was founded in 2000 by four cousins from Maine: Marty and Tim McKenna and Mike and Brian Sillon. Its first store was in East Rochester, New Hampshire.

It serves handcrafted coffee and espresso drinks, Rush energy drinks, Italian sodas, and iced teas.

Aroma Joe’s began franchising in 2012 and today has more than 70 stores in the US.

Aroma Joe’s franchises pros and cons

Pros

• Real estate and construction: The brand has a dedicated real estate team. It helps franchisees with site selection, store designs, and the construction of their restaurants. In addition, it provides them with standard specifications, approved equipment requirements, and lease negotiations.
• Operation support: The brand provides its franchisees with management and professional support about the brand’s best practices for establishing and running a successful franchise. Franchisees get access to top management guidance on growth strategies and networking relationships with successful franchise partners.
• Marketing support: Aroma Joe’s has an experienced marketing team. Franchisees can leverage the brand’s national and local store marketing guidelines to create publicity for their stores and reach a wide market segment.
• Flexible build-out options: The brand offers its franchisees a variety of flexible build-out options to accommodate any available real estate. Its concept also makes use of small footprints, which gives them efficiency and lowers the cost of restaurant development.
• Convenience: The brand utilizes a drive-through concept in its restaurant design. Franchisees can provide excellent customer service, increase sales, and improve their bottom lines by strategically placing their restaurants.
• Franchise training: Aroma Joe’s offers its franchisees extensive franchise training to make sure they are set up to run the business successfully. Currently, its training program consists of 31 hours of classroom training and 40 hours of in-store training. Also, franchisees get help with grand opening training and continuous training on the best restaurant practices, customer service, and how to hire and train staff.

Cons

• No exclusive territory protection: The Aroma Joe’s Restaurant franchise does not grant its franchisees a fixed area to operate their restaurants. Franchisees may face competition from franchises authorized by the parent company or competing restaurants and brands it controls.
• Not a part-time business: The franchise is not a part-time business. Franchisees must open full-time according to the parent company’s hours of business.
• No financing: The franchisor does not directly or indirectly finance the franchisees. Also, it does not guarantee any lease, note, or grant on behalf of its franchisees.
• Competition: Aroma Joe’s faces stiff competition from other brands such as PJ’s Coffee, Tim Hortons or even juice brands like Jamba and Clean Juice

How much does an Aroma Joe’s franchise cost?

On average, you may need to invest around $665,000 to open a new Aroma Joe’s restaurant.

The mentioned investment amount is an average. Indeed, it will change depending on factors like location, restaurant size, etc. As per the Franchise Disclosure Document 2022, the investment ranges between $283,500 and $1,046,500.

Aroma Joe’s franchises startup costs

Why do you need to invest this amount? Well, the investment covers all the necessary startup to open a new Aroma Joe’s coffee shop.

In addition to an initial franchise fee ($12,500 to $25,000 depending on the format you choose), the investment also covers:

• Formation Costs: leasehold improvements, site development, equipment package, outside signage, professional fees, security system, training expenses, design fees, etc.
• Initial Marketing: new store marketing
• Operating Costs: insurance, working capital for first 3 months, etc.

Type of cost	Low	High
Initial Franchise Fee	$12,500	$25,000
Formation Costs	$245,000	$965,500
Initial Marketing	$5,000	$5,000
Operating Costs	$21,000	$51,000
Total	$283,500	$1,046,500

What’s the AUV of an Aroma Joe’s franchise?

On average, an Aroma Joe’s franchise has an Average Unit Volume of $854,947 per year. This is the median annual turnover of 73 Aroma Joe’s coffee shops operating during the entire 2021 fiscal year.

How profitable is an Aroma Joe’s franchise?

We estimate that an average Aroma Joe’s franchise makes $249,957 in profits per year. This represents a 29% profit margin (adjusted EBITDA margin).

The 29% adjusted EBITDA margin is on the higher end compared to similar food & beverage franchises as per our intelligence (~25-27% industry average). 

Note that Aroma Joe’s doesn’t provide any financial information regarding costs for its franchises. Instead we had to use our restaurant franchises benchmarks for COGS (25% sales) and labor costs (29%) to calculate this number.

Profit and loss	Amount	% of sales
Sales	$854,947	100%
COGS	$(213,737)	25.0%*
Labor	$(247,935)	29.0%*
Rent	$(45,000)	5.3%
Royalty + marketing fees	$(98,319)	11.5%
Adjusted EBITDA	$249,957	~29%

Should you invest in a Aroma Joe’s franchise?

Assuming a 15% net profit margin (after deducting all expenses including corporate taxes, debt interest expenses, etc.) we found Aroma Joe’s has a 5.2 years payback which is very good for a coffee franchise.

In other words, you would be able to repay creditors and potential investors with the profits generated from your franchise within 5 years only.

Therefore, it’s safe to say that Aroma Joe’s is a profitable business: the profits are worth the upfront investment of $665,000 on average.

Keep in mind though that this payback period is based on the average performance of the franchised Aroma Joe’s as disclosed in the Franchise Disclosure Document. Indeed your coffee shop may not perform as well as the average.

In any case, when making a decision on which franchise to go for, you should also consider, in addition with the profits and costs, other factors such as the pros and cons discussed above in this article.

How does it compare vs. other franchises?