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The Human Bean Franchise ProfileCoffee Franchises > Coffee Shops |
What Are the Initial Investment Requirements for The Human Bean Franchise?
To become a franchisee of The Human Bean, you'll need to prepare for an initial investment ranging from $552,350 to $1,058,890. This includes a franchise fee of $30,000. Additionally, potential franchisees must have a cash reserve of $127,000 to $154,000 and a net worth of at least $1,000,000. Understanding these financial requirements is crucial for evaluating whether this franchise opportunity aligns with your financial capabilities.
What Are the Ongoing Fees for The Human Bean Franchise?
Franchisees of The Human Bean are required to pay a royalty fee of 6% on their gross sales, along with a marketing fee of 1%. These ongoing fees are essential for maintaining brand support and marketing efforts, which can significantly impact your franchise's success. It's important to factor these costs into your overall financial planning when considering this investment.
What Is the Average Revenue Potential for The Human Bean Franchisees?
The average annual revenue per unit for The Human Bean franchisees is approximately $884,304, with a median revenue of $859,940. Revenue can vary significantly, with the lowest reported annual revenue at $369,322 and the highest at $1,594,758. This revenue potential highlights the opportunity for profitability, but it also underscores the need for effective management and operational efficiency to achieve these figures.
What Is the Breakeven and Payback Period for The Human Bean Franchise?
Franchisees can expect a breakeven time of around 12 months, which indicates that they can recover their initial investment within the first year of operation. The investment payback period is even more favorable, at just 8 months. These timelines suggest that The Human Bean franchise could be a viable option for those looking to enter the coffee franchise market with a promising return on investment.
The Human Bean Franchise Financial Requirements
Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.
The minimum total assets (minus liabilities) you must possess.
Net Worth Required:
The estimated period to recoup your total investment.
Investment Payback:
The initial fee paid to join the franchise system.
Franchise Fee:
Ongoing percentage of revenue paid to the franchisor.
Royalty Fee:
Regular contribution toward the franchise’s advertising fund.
Marketing Fee:
The estimated timeframe to recover your initial costs.
Breakeven Time:
The total amount required to launch the franchise.
Initial Investment:
The minimum liquid capital you must have on hand.
Cash Required:
The typical yearly revenue generated per franchise location.
Average Revenue:
The middle value of yearly revenue among franchise locations.
Median Revenue:
The largest reported annual revenue among franchisees.
Highest Revenue:
The smallest reported annual revenue among franchisees.
Lowest Revenue:
A broad sector defining similar types of franchise businesses.
Industry:
A more specific division within the broader industry.
Category:
The key individuals guiding the franchise’s strategy and growth.
Leadership:
The official business address of the franchisor’s headquarters.
Corporate Address:
Available financing options to help start the franchise.
Funding Year:
The main organization that owns the franchise brand.
Parent Company:
The Human Bean Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2020 | 2021 | 2022 |
|---|---|---|---|
| Total Units | 26 | 26 | 24 |
| Net Change YoY | 0 | -2 | |
| Franchised Units | 13 | 13 | 12 |
| Net Change YoY | 0 | -1 | |
| Corporate Units | 13 | 13 | 12 |
| Net Change YoY | 0 | -1 |
Investment Overview
The Human Bean franchise offers a low initial investment ranging from $552,350 to $1,058,890, making it accessible for aspiring entrepreneurs. The initial franchise fee is set at $30,000, with ongoing royalty fees of 6% and a marketing fee of 1%. To get started, franchisees need to have liquid cash available between $127,000 and $154,000, along with a net worth requirement of $1,000,000.
Revenue Potential
Franchisees can expect average annual revenue of approximately $884,304 per unit, with a median revenue of $859,940. The revenue range varies significantly, with the lowest annual revenue reported at $369,322 and the highest reaching $1,594,758. This diverse revenue potential showcases the opportunity for growth and profitability within the franchise model.
Breakeven and Payback
The Human Bean franchise has a breakeven timeframe of about 12 months, indicating that franchisees can expect to recover their initial investment within the first year of operation. Furthermore, the investment payback period is an impressive 8 months, which enhances the attractiveness of this franchise opportunity for potential investors.
Franchise Growth
As of 2022, The Human Bean operates a total of 24 units, with 12 franchised and 12 corporate locations. The franchise has maintained a consistent number of units over recent years, with 13 franchised units in both 2020 and 2021, followed by a slight decrease in 2022. This stability reflects the brand’s commitment to sustainable growth and operational excellence.
Financial Performance
The average profit and loss metrics reveal a gross profit margin of 60.2%, with operating expenses averaging $426,009 annually. This indicates that while costs are significant, the potential for strong profitability exists, particularly with an EBITDA of $106,412, representing 12% of revenue. Understanding these financial dynamics is crucial for franchisees aiming to optimize their operations.
Operational Insights
Franchisees should be aware of the average annual running expenses, which total approximately $426,009. Key costs include payroll expenses at $236,357, rent at $32,927, and utilities at $15,550. Effective management of these expenses is essential for maintaining profitability and ensuring the long-term success of each franchise location.
Frequently Asked Questions
The initial investment for a Human Bean franchise ranges from $552,350 to $1,058,890, which includes the franchise fee and other startup costs.