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PJ’s Coffee Franchise Costs $192K – $1.13M (2024 Fees & Profits)

PJ’s Coffee of New Orleans was founded in 1978 by Phyllis Jordan, a visionary in the coffee industry dedicated to high-quality beans and superior roasting methods. The franchise is headquartered in New Orleans, Louisiana, and has remained true to its roots, emphasizing the rich culture and flavors of its home city. In 2008, the company was acquired by New Orleans natives and brothers Paul, Steven, and Scott Ballard, who have continued to uphold its legacy of excellence.

PJ’s Coffee began franchising to expand its unique coffee experience beyond New Orleans. The franchise offers a diverse menu that includes its famous cold brew iced coffee, crafted using a special cold-drip process that reduces acidity, alongside traditional hot coffees, espresso drinks, and a selection of teas. Their offerings also feature the beloved New Orleans-style beignets, creating a distinctive café experience.

What sets PJ’s Coffee apart is its commitment to quality and its deep connection to New Orleans. The company sources only the best Arabica beans from around the world and roasts them in small batches to ensure the highest standards. This dedication to craftsmanship and authenticity provides a unique selling proposition in the competitive coffee market, allowing PJ’s Coffee to stand out with its signature flavors and New Orleans charm.

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Initial investment

Type of ExpenditureTraditional ModelNontraditional Model
Initial Franchise Fee$10,000 to $35,000$10,000 to $25,000
Real Estate Lease Deposit for Premises$2,500 to $12,500$2,000 to $7,500
Furniture, Fixtures, and Equipment$130,000 to $215,000$50,000 to $215,000
Opening Advertising$12,500$12,500
Travel and Living Expenses While Training$3,500 to $5,000$3,500 to $5,000
Insurance$2,500 to $5,000$2,500 to $5,000
Other Prepaid Expenses, Such as Deposits, Licenses, and Various Permits$2,000 to $6,500$2,000 to $4,500
Opening Inventory$10,000 to $14,000$10,000 to $14,000
Signage$7,000 to $18,000$4,000 to $7,000
Free Standing Building or Leasehold Improvements$175,000 to $725,000$50,000 to $175,000
Small Wares$9,000 to $12,000$9,000 to $12,000
POS System & Backoffice Computer System$2,500 to $5,500$2,500 to $5,500
Legal, Accounting & Organizational Costs$2,500 to $5,000$2,500 to $5,000
Construction Drawings$7,000 to $30,000$1,500 to $11,500
Additional Funds$30,000$30,000
TOTAL$406,000 to $1,131,000$192,000 to $543,500

Note: The table above provides a snapshot of the main costs associated with starting the most common franchise format (as disclosed in the Item 7 of the Franchise Disclosure Document). For a complete overview of all the expenses involved with the various formats offered by the franchisor, please consult the Franchise Disclosure Document.

Franchise fees & Royalties

Initial Franchise Fee

The initial franchise fee ranges from $10,000 to $35,000, depending on the type of model chosen and whether the franchisee has entered into a Multiple-Unit Option Agreement (MUOA).

Royalty Fee

For Traditional and Non-traditional Models, the royalty fee is 5.0% of net sales. For Special Contracts Models, the fee ranges from 3.0% to 6.0% of net sales, depending on the franchisee’s experience.

Marketing/Advertising Fee

The marketing fee is 2.0% of net sales for Traditional and Non-traditional Models. There is no fee for Special Contracts Models.

Lease or Rent Fee

Lease payments for a typical PJ’s Unit range from $2,000 to $12,500 per month, depending on the size, location, and market demand for the property.

Transfer Fees

The transfer fee is $15,000, payable at the time of transfer.

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Franchise pros and cons

Pros

  • Design and Construction: The brand provides its franchisees with an expert real estate team to guide them through efficient design and systematic construction processes. It offers franchisees the standard specifications, designs, and restaurant construction layouts, as well as the option of modifying the contractor-approved configurations to fit into the franchisee’s available real estate opportunities.
  • Marketing and promotions: PJ’s Coffee uses comprehensive, turn-key promotional campaigns to enhance its brand awareness and promote local store operations. Franchisees can use dedicated and efficient marketing strategies and tools to target a wide market area and drive customer traffic and sales.
  • Ongoing support and consultation: The franchisor provides its franchisee with ongoing consulting and online support so that they can keep a quality check on their performance. Franchisees get effective and timely communication, promotional campaigns, new and seasonal product rollouts, and new operational procedures from the parent company. 
  • Training: The brand has a simple and comprehensive multi-level online, classroom, and hands-on-the-job training program to help its franchisees quickly learn and understand its business concept. It trains its franchisee in restaurant operations, training and hiring qualified staff, and handling customers.

Cons

  • No exclusive territory protection: The brand does not offer its franchisees an exclusive territory to operate in. Franchisees may face competition from franchisees granted by the parent company or from competitive channels or brands it controls.
  • No financing: PJ’s Coffee does not provide direct or indirect financing to its franchisees. Also, it does not guarantee any lease, note, or grant to its franchisees.
  • Not a passive investment. The franchise does not allow absentee ownership. Franchisees are required to be fully involved in the stores’ daily operations.
  • Competition: like any other coffee franchise out there, PJ’s Coffee must face stiff competition from the likes of Starbucks, Tim Hortons, Biggby Coffee and Scooter’s Coffee to name a few

How to open a PJ’s Coffee franchise

1. Initial Inquiry

  • Research the Franchise: Start by gathering detailed information about PJ’s Coffee franchise opportunities, including initial costs, ongoing fees, and support provided.
  • Contact PJ’s Coffee: Reach out through their official channels to express your interest and ask for additional information or clarification on any details.

2. Submit Franchise Application

  • Complete the Application: Fill out the franchise application form provided by PJ’s Coffee. This will include personal information, financial details, and your business experience.
  • Submit Required Documents: Attach any necessary documents, such as proof of funds or a resume outlining your relevant experience.

3. Review and Approval

  • Franchise Review: PJ’s Coffee will review your application and financial qualifications.
  • Interview Process: You may be invited for an interview to discuss your application and business plan in more detail.
  • Approval: If you meet their criteria, you will receive approval to move forward.

4. Franchise Agreement

  • Receive Franchise Disclosure Document (FDD): Review the FDD, which outlines the terms of the franchise agreement, including fees, obligations, and support.
  • Legal and Financial Consultation: It’s advisable to consult with a lawyer and an accountant to understand the implications of the agreement fully.
  • Sign the Agreement: Once you are satisfied with the terms, sign the franchise agreement to officially become a PJ’s Coffee franchisee.

5. Secure Financing

  • Determine Financing Needs: Calculate the total investment required, including the initial franchise fee, equipment, inventory, and working capital.
  • Explore Financing Options: Look into various financing options such as personal savings, loans, or investors to cover the initial and ongoing costs.

6. Site Selection and Lease

  • Location Selection: Work with PJ’s Coffee’s real estate team to find a suitable location for your franchise.
  • Negotiate Lease: Once a location is selected, negotiate the lease terms with the property owner.

7. Build-Out and Training

  • Design and Construction: Follow PJ’s Coffee’s design specifications to build out your store. This includes interior design, equipment installation, and setting up the store layout.
  • Training Program: Attend PJ’s Coffee’s training program, which covers operations, customer service, marketing, and management.

Disclaimer

Disclaimer: This content has been made for informational and educational purposes only. We do not make any representation or warranties with respect to the accuracy, applicability, fitness, or completeness of the information presented in the article. You should not construe any such information or other material as legal, tax, investment, financial, or other professional advice. Nothing contained in this article constitutes a solicitation, recommendation, endorsement, advertisement, or offer to buy or sell any franchises, securities, or other financial instruments in this or in any other jurisdiction in which such solicitation or offer would be unlawful under the franchise and/or securities laws of such jurisdiction.

All content in this article is information of a general nature and does not address the detailed circumstances of any particular individual or entity. Nothing in the article constitutes professional and/or financial and/or legal advice, nor does any information in the article constitute a comprehensive or complete statement of the matters discussed or the law relating thereto. You alone assume the sole responsibility of evaluating the merits and risks associated with the use of any information or other content in this article before making any decisions based on such information or other content.

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