It is certainly a saturated market in just about every section of the coffee industry these days.
Cafes come and go. The number of so called professional coffee roasters are growing by the week. And of course, the mobile coffee van industry is a low investment venture destined for failure if there are any shortcomings in quality, service and price.
I was watching Jeff,s post, and happen to stumble across an ad on Gumtree (Brisbane) a franchisee attempting to sell his business at a low price.
It mentions his displeasure of the franchise system and a warning to potential interests.
I,m not one to promote doom and gloom, but perhaps it's worth pasting this as a lesson to those who want to enter a small business.
""I have been with this mobile coffee franchise for some time and I want to sell my this business. The franchise fees are too high which is ok for a few busy colder months but the rest of the year it's been hard to find enough business to be able to make a profit. Especially with so many other mobile coffee vans out there. The franchise agreement (5 years) is all in the franchisors favor, and recently I was forced to spend quite a lot of money on rebranding, even though I know it will make no positive difference to my bottom line, only more expenses. The customers don't care about branding they care about good coffee.
This franchise is based in gold coast and is run by elderly couple.
I was led to believe that this would be a profitable business, just like in the marketing documents I have but unfortunately it has not worked for me so I'm selling this business. Of course the marketing the franchisor gives you to make you purchase one of their franchises is purely based on hypothetical numbers not actual real so do your due diligence and find real figures. Be prepared to pay franchise fees, legal fees, delivery fees, admin fees, marketing fees, and everything in between. If you can make it work, you are good. I strongly suggest you insist on talking to at least 3-4 other franchisees before you buy my business, to get a good feel for if this is for you. you have legally right to get contact info for other franchisees from franchisor. unfortunately i cannot give the franchisors finance report because they didn't give it to me even though they have to according to the franchise code. No matter if I make profit I have to pay them hundreds of dollars every week, so I'm sure their finance report looks good. Steady profitable company.
Marketing by these franchise businesses always say "great life style", "work your own flexible hours". it actually means working seven days a week, and mostly just to pay for franchise fees, stock and other fees. Working less and have more profit is not true! Only high profit for franchisor, not you. Also "exclusive" territory of course only means no other coffee van from same franchise, but there are many many coffee vans out there and of course they are free to operate in "your" area. Just misleading marketing. And for franchise you pay tens of thousands for this "exclusive" area, total cost with vehicle over hundred thousand. very bad. To buy my business you pay only little, around a third.
Hopefully someone can make my business work, but I need to sell it because is difficult to make it profitable. Everyone says it's easy money, but no you end up working many weekends in addition to week days. ""
I was saddened to read of this. But here is a seller who is brutally honest. On another note, a cafe I used to work for is about to sell due to it's owner is a interior designer who have not worked behind a coffee machine in her life, apart from taking part in a short barista course. The quality of the coffee took a dive and she went through quite a number of staff to rectify this. In short, she had enough of it and want to move to Melbourne to open another cafe. Oh dear!
Too many people look at the bright lights and colours and think, I can do that, looks like fun. What they don't see is the hard work and the passion of the product that you need to succeed.