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How Profitable is a Scooter’s Coffee Franchise? 2023 Stats

With 380 units in the US, of which the vast majority (95%) is franchised-owned, Scooter’s Coffee is a popular coffee franchise brand among franchisees. Indeed, despite its relatively small size, a Scooter’s Coffee restaurant makes $797,101 in turnover per year on average.

Yet, it’s not cheap either: you would have to invest on average $1,143,250 to open a new Scooter’s Coffee franchise. Is this a profitable business? Is this a good investment?

In this article we’re looking at Scooter’s Coffee from the perspective of its latest Franchise Disclosure Document to find out whether you should invest in this franchise. Let’s find out!

Scooter’s Coffee: key figures

Franchise fee$40,000
Royalty fee6.0%
Marketing fee2.0%
Investment (mid-point)$1,143,250
Median annual sales$797,101
Sales to investment ratio0.7x
Investment payback*9.6 years (mediocre)
Minimum net worth$500,000
Minimum liquid capital$200,000
* using 15% net profit margin

🔎 How does Scooter’s Coffee compare vs. other franchises? Check the ranking

Scooter’s Coffee: a brief introduction

Scooter’s Coffee is an American drive-thru coffeehouse chain with over 500 locations in the US.

The brand is known for its signature caramel coffee, smoothies, baked goods, espresso drinks, and other related foods.

It was founded in 1998 in Bellevue, Nebraska, by Don and Linda Eckles. Scooter’s Coffee started franchising in 2002 and is franchised by Scooter’s Coffee LLC, headquartered in Omaha, Nebraska.

Scooter’s Coffee franchises pros and cons

Pros

  • Absentee ownership is allowed: The franchise provides franchisees with a passive investment opportunity. Franchisees can operate a Scooter’s coffee restaurant as they pursue their formal jobs and other business ventures.
  • Comprehensive Training consisting of 104 on-the-job hours and 56 classroom hours is necessary to train franchisees on the business concept and practice, customer service, inventory handling, and managing human resources.
  • Corporate support: The brand provides franchisees with industry experts to guide them on how to run their restaurants smoothly. Also, franchisees get access to a network of successful franchises that share valuable business insights and ideas for growth.
  • Real estate and construction: The brand helps its franchisees with site selection, lease negotiation, design, and construction of their restaurants. It provides them with real estate experts to help them identify convenient business locations and construction plans to establish restaurants at lower costs.
  • Flexible franchise formats: The franchisor gives its franchisees two operating formats so that they can choose which suits them better. These are the drive-thru kiosks that operate on take-out for drinks and the drive-thru coffee house, which caters to walk-in customers
  • Exclusive territory: The franchisor grants franchisees the right to operate in an exclusive protected territory. The franchisor does not authorize any other franchisees or establish Scooter’s coffee restaurants in the agreed-upon territory.

Cons

  • Not a part-time business: The franchise does not provide franchisees with a part-time business opportunity. Therefore, franchisees are required to open in full as per the brand’s operating schedule.
  • Competition. The brand is facing competition from world brands like Dutch Bros. Coffee, Tim Hortons, Biggby coffee or even Dunkin’ Donuts
  • No global presence: The brand does not have a presence outside the United States. Franchisees may have challenges reaching their targeted customers in other countries.

How much does a Scooter’s Coffee cost?

On average, you would need to invest $1,143,250 to open a new Scooter’s Coffee restaurant. 

According to the latest FDD, startup costs vary based on the format of restaurant you choose: the Kiosk Store costs on average $794,500-$1,264,500, whereas a Coffeehouse store costs $666,500-$1,847,500 instead.

The investment amount covers all startup costs you need to open a restaurant. In addition to the initial franchise fee of $40,000, you would also pay for:

  • Formation Costs: initial opening support fee, site concept plan, preliminary due diligence, site work, building and leasehold improvements, architectural and engineering fees, equipment, fixtures and furniture, signs, lease deposit, licenses, etc.
  • Operating Costs: initial inventory, supplies, 3 months working capital, etc.
Type of costLowHigh
Initial franchise fee$40,000$40,000
Formation costs$729,500$1,111,500
Operating costs$25,000$113,000
Total$794,500$1,264,500
Source: Franchise Disclosure Document 2022

How much money can you make with a Scooter’s Coffee franchise?

On average, a Scooter’s Coffee franchise makes $797,101 in sales per year.

The sales number is the annual median sales of 358 franchised restaurants operating in 2021. This is an average of both the Kiosk Store and the Coffeehouse Store. For example, a Kiosk Store makes slightly less revenue than a Coffeehouse Store.

What’s more is that Scooter’s Coffee franchises revenues have been growing steadily over the years. As you can see, revenue per franchise increase 2 fold in the last 8 years.

How profitable is a Scooter’s Coffee franchise?

On average, a Scooter’s Coffee franchise makes $170,116 in profits per year (21.2% EBITDA margin).

Profit-and-lossAmount ($)As % of sales
Sales$801,174100%
Discounts$(45,421)5.7%
COGS$(235,646)29.4%
Labor$(194,871)24.3%
Rent$(31,829)4.0%
Royalty + marketing fees$(60,460)7.5%
Overhead$(62,831)7.8%
EBITDA$170,11621.2%
Source: Franchise Disclosure Document 2022

Yet, this adjusted EBITDA does not mean you will earn 21.2% of the total revenue as the net profit. Rather, you may need to deduct taxes, debt interest expenses, and other costs. Only then you can pay yourself dividends.

Is a Scooter’s Coffee franchise a good investment?

It takes on average 9.6 years to repay your investment if you were to open a new Scooter’s Coffee franchise. This is your payback period: the time it takes for an investment to repay itself with the future profits.

For the profits, we used net profits instead of EBITDA here, which we assume to be 15% of sales (which makes sense given EBITDA is around 21%, in line with similar restaurants).

Scooter’s Coffee business plan template

Download the Scooter’s Coffee business plan and get your franchise funded

Including a 5-year financial plan built with the latest Franchise Disclosure Document numbers

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