The royalty is set at 5% of gross revenues and is collected on a weekly basis. While all franchises have royalties, very few also control the distribution of the product. CRCC owns the company that provides the coffee and protein that are are the core of the CRCC business. The benefit that this has to the franchisee is that we can, as a result, reduce the fees of the product itself in order to offset the royalties that will be paid.
Our advertising fee is 2% of gross sales. Those fees help to pay for things such as:
- The technology that allows you to have the CRCC streaming radio station in your store
- Access and customization of our TV ads
- Access and customization of our radio ads
- Social media management with “nearly” daily updates
- Local webpage on the CRCC site that is SEO’s and submitted for search engines
- Licenses for your digital menu boards
- Full access to our graphics department for any new designs or marketing pieces that you need created
- Our full and continually updated marketing items that you can use for your store
We also request that all new franchisees to utilize 4% of their first year budgets for local marketing.
The reasons people would want multiple territories include:
- Increasing the potential for long term profits
- Hedging in (or protecting) areas around the initial store setup
- An interest in selling the territories in the future for a profit.
We offer discounts on multiple territories but do require that at least two new stores are opened each 12 month cycle. Our franchise fees are $39,000 USD for the first store, $30,000 USD for the second and $27,000 USD for the third and additional stores. When multiple territories are purchased, we only request that a 50% deposit be placed on each additional territory until an LOI issued on a potential location. Prior to an LOI being issued to a landlord, the final and full payment for the franchise must be paid.
A city with a population of 250,000 may be determined to have 4 potential territories in it. If a person were to but the “whole city” … or all 4 territories, the total price would be $79,500, or:
- $39,000 for the first store
- $30,00 for the second store
- $27,000 for the third store
- $27,000 for the fourth store
But the fee structure would be an initial payment of $81,000:
- $39,000 for the first store
- $15,000 for the second store (50% of $30,000)
- $13,500 for the third store (50% of $27,000)
- $13,500 for the fourth store (50% of $27,000)
The remaining balance on that franchise fee must be paid prior to an LOI being issued.
What if someone wants to buy a territory that I own? In that case, you could either opt to keep it and queue it as “next in line” for development, or you could opt to sell the territory. If you opt to sell, then the territory would be sold at $39,000 and the revenue would be split 50/50 between you and CRCC.
We do not negotiate our fees. While we understand that everyone is looking for a “break”, we believe that our investment in setting up a successful brand, initial and ongoing training, and deeply discounted products to our franchisees in order for them to have high profits is a very strong value for the fees.
The majority of the advertising fee that each franchisee has to pay goes to hard costs that we cover for that location. Rather than “nickel and diming” franchisees, we select certain expenses related to advertising that we know will work best for the location. They include, but are not limited to:
- Digital Menu Player — updates to pricing, specials, new graphics, etc from our centralized menu system.
- Radio Station Subscription — allows for the Classic Rock Coffee streaming radio station to play in your store.
- ASCAP — music license fees allowing us to broadcast the radio station to your store
- BMI — music license fees allowing us to broadcast the radio station to your store
- SESAC — music license fees allowing us to broadcast the radio station to your store
- Social Media Management — each store is provided with social media as well as a website that is managed for them. Franchisees can contribute as often as they want.
- Graphic Artist — (US ONLY) our graphics department is available to create and edit content, as well as work with local printers.
- Commercial Creation (TV & Radio) — we provide standard commercials that can be updated for your market.
- Seasonal Special Marketing Materials — table top inserts, posters, and other marketing items associated with seasonal specials.
- Updated marketing content on the CRCC Print Media website that can be customized for each store.
- Master Franchisor Applicants are required to visit the US HQ in Springfield prior to being awarded the MF.
- While in most cases we do not require Single Store Owner Applicants to visit, there are some instances where it does become necessary. We do strongly recommend all owners to be present for a minimum of 3 days, regardless.
In both instances, the applicants are 100% responsible for their own expenses. We do, however, defer three months of royalty ($1500) if an agreement is signed to help cover these initial expenses.
No, absolutely not. Before entering a country’s market we always identify a Master Franchisor. This person or company is not only responsible to start and oversee stores, but also to manage the distribution center and roasting center that will serve other stores within the county.
When we set up a master franchisor, we also help them setup the exact roasting center that we use in the US, train their staff how to produce the coffees by our exact profiles, and ensure our exact levels of quality.
Coffee is sourced from all over the world and tested at our US headquarters, and then shipped as green coffee to each country to be roasted prior to selling it. It is important for Classic Rock Coffee that each of our customers get the highest level of coffee each time they order. And that means drinking coffee that has been roasted within the last 14 days.
If an applicant is wanting to open a store in a country, including the United States, that is different from the country where they currently hold a passport, it is important to understand what we can and cannot do.
What we can do
- Accept an application and process accordingly.
- Provide a letter of invitation to approved applicants to visit the United States HQ.
- Work with an applicant’s immigration lawyer to provide supporting materials of the franchise award process.
What we cannot do
- Provide a letter of invitation any country other that the United States.
- Provide a letter of invitation prior to an applicant being fully approved and all details of an agreement vetted.
- Provide any assistance in visa or work applications.
Yes, our current development includes International Franchising. If you are interested in becoming an International Master Franchising Partner please request the application form and put what country you are interested in. The fees for an International Master Franchise Partner are not disclosed in this website and will be addressed based on the country of interest.
When we work outside of the US, we first must establish a Master Franchisor who not only commits to opening stores, but also will be responsible to operate the distribution center and roasting center. Without a Master Franchisor in place, its not financially reasonable to place a single store in a location.
We are actively looking for Master Franchisors all over the world, and provide steep incentives to help them get started.
We allow single stores to be opened in countries that do not have a Master Franchisor.
You can see a full overview here: International Single Stores
A quick summary:
- Simplified version of costs:
- $39,000 USD franchise fee.
- $70,000 USD Equipment Investment on a new store.
- Additional Training Expense will be airline, hotel and food for one staff member for between 10 days from the US or our European Training HQ in Budapest, Hungary (whichever is closer).
- Variable Cost for paint, electrical, plumbing, HVAC and floors on leased space. We will try to help you source everything in your country. If there is something you can’t find in the your country then it can be shipped from another source (we will help you locate).
- Graduated Royalty starting at just $500 per month for the first 6 months of operation.
- If you have 29 Minutes — watch this Franchise Webinar. It will give you a FULL overview of the entire franchise. This is produced primarily for franchisees in the US, but the overview will be helpful and relevant.
For your franchise fee, you get (as a minimum):
- A defined exclusive territory that will accommodate at least 50k potential customers
- Approval and guidance on building selection
- Lease negotiation
- CAD drawings with our architect for your new store (that you will use to build out the store with your contractor)
- Direct involvement in the buildout of your store to meet the Classic Rock Coffee requirements.
- One week of training for up to three staff members at the national headquarters (depending on your country)
- 10 -15 days of onsite training for your entire staff prior to opening and through your grand opening
- Access to discounted equipment lists through our vendors
- Franchise pricing for our core food / drink products (we sell these below wholesale cost to you).
- On going training with our US staff. We provide an operations training track that begins as soon as you are open, as well as a business development track.
While we are keen on building a very cool interactive map to show the available territories, we haven’t gotten that far yet. At this point, just ask us. We’ll work through the territories with you, see what is of interest to you, and if its not available we will let you know asap.
Once you select a territory that you’d like to put a store in, we will work together to define what that territory is. A couple of things about this selection:
- We don’t choose the final store site for franchisees. We provide target market selection in your territory that fits our exact customer model, so that franchisees do not have to “guess” as to where the best spots are for a CRCC. They are mapped out for you based on statistical data for your exact territory. Once those markets are identified, the building options are made available for the franchisee to finalize their decision. All locations are approved by CRCC.
- We define territories in several ways. Sometimes it is zip codes, sometimes road boundaries. It’s not scientific as much as it is an effort on our part to make sure you have enough of a customer base to be successful. We want you to have at least 50k people available and probably up to 100k. Our method is “best effort” to give you what we believe the territory is, see if you are happy with it, and if you want a change, just let us know.
We have two versions of our store that is available:
- 1000-1800 sq feet — this smaller profile store includes a drive-through and a small version kitchen. Typically, in this size store, there is no availability for a fuller food menu. Food options would be limited to a couple of sandwiches, soup, and pastries.
- 1800-2200 sq feet — the larger version of our store also would include the drive-through, as well as an expanded kitchen area that could accommodate a larger food menu.
You can get more detailed information on the types of store layouts that we use by visiting: http://classicrockcoffeefranchise.com/real-estate/.
Classic Rock Coffee Company’s are decorated to defined system-wide specifications and must meet trade dress and signage requirements.
Here are some non-negotiables of the store look and feel:
- Color palettes
- Counter Tops
- Furniture Styles
- Outdoor and Indoor Signage
- Menu Boards
- Music Selection
- Roadie Cases
Here are some items that we’d like your store to have some flexibility in:
- Album cover selections for artwork
- Music memorabilia
- Some items on the food menu that may be helpful based on the region of the world you live in.
When a franchise agreement is in place, we will provide a full itemized list of the following:
- Equipment — make, model, retail cost and our cost for franchisees.
- Pro Shop Items — vendor list, franchisee costs and required inventory
- Initial Product — Roasted coffees, protein, cups, lids, straws, etc.
While we have worked to secure what we believe are the best costs on all equipment, we do allow franchisees to source the same equipment if they prefer to. The only restriction is that it must be the same exact item that is on our required equipment list.
No, we do not require all locations to have a kitchen. It is important to us that we are known and portrayed as a high end coffee house. We are intent on being a high end coffee house that serves excellent food … not a restaurant that has coffee.
As you go through the application process with us we will help you to determine if a kitchen is a fit for you. If you opt to have one, we do require that the menu items are restricted to the categories that we feel best serve a Classic Rock Coffee customer. Specifically, those categories are paninis, salads, soups and pastries.
Our kitchens are relatively small so that our establishments are not required to have highly trained chefs.
Yes. The coffee culture generally requires a drive thru, and national averages have stated increases in revenue anywhere from 20%-40% for coffee houses that do have a drive through.
Drive through locations are a requirement for first time CRCC Franchisees. If an existing franchisee wishes to open a store without a drive through later, they are welcome to do so.
Therefore, our target market and location services only provide sites to our franchisees that will accommodate a drive thru.
CRCC works exclusively with Windsor Realty for our target market selection in each territory. We have a very specific customer profile that we are able to use with each territory, and it enables us to find the exact prime locations in which to look for real estate that meets our customer model … thus taking the guesswork out of finding a good location.
Once the target markets are identified, Windsor reviews the preferences with our franchisees and then gets the full inventory of what is available that meets our criteria. All of this information passed on to the franchisee to work through together and make sound decisions. When a reasonable list is identified, Windsor spends a day walking our franchisees through each option on site. The final decision as to what location within the target market is left to the franchisee and is approved by CRCC.
We do not pick out locations for our franchisees. Franchisees are the owners of their own business and must make the final decision on their location.
There is an additional fee for this service, but the total fee is generally recovered in full by the real estate commission paid by the landlord to the agency, leaving little to no out of pocket expense to our franchisees.
The details are all included in the Franchise Disclosure Document (FDD). We provide a full audit of Classic Rock Coffee Franchising from our CPA for your review. Please note that the FDD does not include P&L information on the stores (we’ve addressed this in a previous FAQ).
The FDD is provided upon receipt of an approved “Pre-Qualification Application” which you can request at any time.
No. Before agreeing to a building we have to first map out our proprietary customer profile on your desired territory to determine where the very best target markets are. Once those are determined (it takes a couple of days), our real estate agency will work with the franchisee to determine the markets they like best, and then proceed to get the inventory of available buildings in those markets.
The agreement with CRCC must be in place before starting the process of determining the target market and location. Once that is finalized, we provide an addendum to the agreement identifying the territory by specific geographic parameters.
As an example, a franchisee may wish to put a store in the north part City ABC. The franchise agreement is signed with CRCC for that area with the territory defined as, “A single location within City ABC to include 50,000 people but not to exceed 100,000 people. The territory will later be defined specific geographic parameters once the Franchisee has chosen a building location.”
Your particular success will be based on a number of variables including location, operating expenses, retail sales mix, sales margins, occupancy costs, financing costs, and other factors.
It is not legal for Classic Rock Coffee to disclosure P&L to franchisees. What we can do is give ‘guidelines’ that will help a potential owner come to their own conclusions. Here are some helpful items to assist with this:
- We have provided a hypothetical profit and loss calculator. This includes real and reasonable expenses that CRCC would have. The calculator is intended for a prospective owner to download and adjust the calculations based on their own findings. We would recommend adjusting items such as expected revenues, payroll, debt service, lease costs, etc.
- Look at other coffee brands numbers. Here is the 2015 published article from QSR magazine that shows average monthly store revenue from Starbucks as $87,341 and Tim Hortons as $95,250.
- Spend a couple of hours counting cars / people going into a coffee house in your community. Multiply that number of people by what you believe the average ticket price would be (you can google “average coffee house ticket” to get a good estimate).
- Ask yourself these three questions: 1) Is CRCC coffee better than other coffee houses? (you won’t know this yet, but when you try it you’ll have your answer), 2) Is the CRCC concept more appealing than other coffee houses?, 3) Are other coffee houses doing well? If you can answer yes to these questions AND you believe you have enough of an entrepreneurial spirit to run your own business, then you should be able to reasonably determine your success.
- Food and Beverage locations follow a simple rule. Keep your cost of goods below 35%. We do and we will make sure you do as well. Which means you have the best chance for profit.
Full Disclosure: Though its not necessary public knowledge, there is an understanding in the franchise world that ‘no one gets rich off of one location.” While it can happen, its not something you should have in your belief system. A good store should provide a reasonable living. But business is about multiples, and those who are able to open up multiple locations find revenues exponentially increased as a rule.
No. However, each coffee house must have a full-time operating partner or manager that has been completed at least one week of training at our headquarters. In addition, you must have a head Barista that will work directly with our HQ Head Barista as needed.
That being said, it is very, very difficult to keep the pulse of the business if you are not there everyday in some capacity. As a franchise owner, you are investing a lot of money into the operation and you certainly don’t want to pass on blind trust “in the hopes that it will work”. Our recommendation is always that you have invested time in the store.
There are exceptions to this, such as:
- You have a spouse who will be managing the store for you
- You have a trusted partner who understand food and beverage, has run stores before, and can be fully trusted with the operation
- You have operated F&B franchises before and have the proper staff in place to manage the store
Classic Rock Coffee sources our own green coffee beans from farms all over the world. In fact, we have the “first pick of the harvest” from farms that we select to get our coffee beans from. These are called “single origin” coffees because they are not blends of sub par coffee beans that are often sold in coffee houses. Each bean is a single type of coffee from a single region and a single farm.
We then roast each of those coffees according to specific profiles that bring out the best tastes for our specialty coffees, each of which is distinct and memorable name, as well as a unique flavor. For instance, our Back in Black is a single origin coffee that is bold, rich and in your face. Go ahead … you remember the song … its time to throw in a little air guitar!
Regardless of where our coffee is served, our customers are only drinking coffee that has been roasted within the last 14 days. Yep, anywhere in the world. It’s within that 14 days that coffee preserves its highest grade of flavor, and we believe that our number one asset is our customer … and they deserve nothing less than the very, very best.
Here is a link to our current menu: http://bit.ly/ClassicRockMenus. Our menu is divided into four main categories:
- Coffee — We offer a “Traditional Coffee” menu, as well as a “Flavored Coffee” menu. Typically customers that come in for the first time are drawn specifically to the flavored coffees (primarily, because that is the desire the market has created). Our baristas and staff are well versed in educating our customers in traditional coffees as well, include espresso, cortados, macchiatos, and cappuccinos. Over 50% of our revenue comes from our coffee bar sales, which is important because we always want to be perceived as a high end coffee house.
- Protein Shakes — We’ve been in the protein shake business for over 11 years and have 300 locations within in the US. We offer high protein shakes (40 grams of protein) and low calorie shake options.
- Smoothies — Our smoothies are all fresh fruit smoothies and attract a strong customer base who may or may not be interested in coffee.
- Food — Our food options include a breakfast menu, shareables, sweet treats, salads, sandwiches, flatbreads, soups and pastries.
You can view our latest menu here.
Yes, it is possible to make some changes to the menu. But we only allow that on the food menu, and those changes must be approved. We understand that some regions of the country or world have specific menu items that make sense in that market. If you have something like this, just let us know and we will evaluate that with you.