Is a Coffee Franchise a Good Investment?

Coffee shops keep opening across the UK, and a growing share of them are franchises rather than independents. That’s exactly why the question is worth asking properly: is a coffee franchise actually a worthwhile use of your money, or just a familiar name with a franchise fee attached? Buying into an established brand and building a coffee shop from scratch both have their place: franchising hands you a working model, training and a name people already trust, while going independent gives you more freedom but starts you from a blank slate. Below, we break down what that decision looks like in practice, using figures from the Hermanos Coffee Roasters franchise model to show how one established coffee brand stacks up.

What Does It Cost to Buy a Coffee Franchise?

Costs to buy a coffee franchise vary depending on the size and format of the site. At Hermanos, there are two routes into ownership. A kiosk format (15 to 25 square metres) requires a £30,000 franchise fee plus £120,000 initial investment, for a total investment of £150,000. A full store format (60 to 70 square metres) requires the same £30,000 franchise fee plus £174,000 initial investment, for a total investment of £204,000.

The franchise fee covers the right to use the brand, systems and support. The initial investment covers fit-out, equipment, signage and everything needed to open the doors. Hermanos does not offer franchise financing directly, so franchisees are encouraged to approach their own bank or a lending partner to fund the initial investment, in the same way they would for any other business loan. Where possible, Hermanos can make introductions to high street financing institutions, but it is the responsibility of the candidate to manage that process directly.

How Long Does It Take to Pay Back a Coffee Franchise Investment?

Payback timeframes depend on the format you choose. Based on the Hermanos franchise model, a kiosk has an estimated payback period of around 1.6 years, while a full store has an estimated payback period of around 2.5 years. It is worth noting that this is a payback figure rather than a breakeven figure, referring to the time taken to recover the initial investment through trading, not the point at which the business first turns a profit month to month.

Smaller kiosk formats tend to pay back faster because the initial investment is lower, even though a full store may generate higher overall turnover once established. Which format suits you best isn’t just a question of available capital and how quickly you want to recover your investment: it’s also about which experience you want to build. A kiosk is fast-paced and focused on quality coffee on the go, while a full store gives you the space to slow down, host regulars and bring the full Hermanos story to life. Either way, you’re choosing the pace you want to work at as much as the numbers.

It’s also worth keeping in mind that a payback figure is a guide rather than a guarantee. It reflects how the model has performed to date, giving you a realistic benchmark to work from rather than a promise for every site. With the right location and strong day-to-day management, there’s every reason a new franchisee can track closely to it or beat it.

What Ongoing Fees Come With Franchising Coffee?

Beyond the initial investment, coffee franchise businesses typically carry two ongoing fees. At Hermanos, franchisees pay a 5% royalty fee on sales, which contributes to the ongoing support, systems and central roastery supply that keep every location consistent. A separate 2% marketing fee on sales funds brand-wide marketing activity, rather than each franchisee having to build awareness alone from a standing start.

When comparing coffee shop franchising options, it is worth asking every brand you’re considering exactly what their royalty and marketing fees cover, since this varies from one coffee franchise business plan to another. Some brands bundle supply chain costs or equipment servicing into the royalty fee, while others keep these separate, so it pays to ask the question directly rather than assume the fee structure is the same across the board.

Is Owning a Coffee Franchise Less Risky Than Starting Independently?

Buying a coffee franchise will lower risks compared with opening an independent coffee shop, and support is where that difference shows up most. Someone starting an independent coffee shop is working everything out from scratch: sourcing suppliers, building recipes and quality standards, training staff and finding customers, all without a track record to fall back on if something doesn’t go to plan. A Hermanos franchisee starts from a different position altogether, with comprehensive initial training, ongoing coaching, detailed operations manuals and supply logistics from the central roastery already in place, so much of the guesswork that trips up independent openings has already been worked through.

Hermanos, for example, has grown from a single pop-up to 10 London locations since 2018, backed by an in-house roasting facility in Walthamstow that keeps quality and flavour consistent across every site, and has been recognised with Best Multiple Operator and Best Independent Coffee Shop at the London Coffee Festival Awards, alongside more than 22,000 social media followers. Its locations have also been ranked within the Best UK Coffee Shops and continue to be featured in leading UK publications.

That said, franchising still carries real financial commitment. Franchisees are responsible for their own funding, staffing and day-to-day running, and ongoing fees apply regardless of how the site performs in any given month. Buying a coffee franchise reduces some unknowns, but it does not remove the need for hands-on management and a genuine commitment to running the business well.

How Do Coffee Shop Brands Differ When Choosing a Franchise?

Not all coffee shop brands offer the same investment, format or level of support, so it’s worth comparing beyond the headline franchise fee. Total investment, ongoing royalty and marketing percentages, and what’s included in that fee (training, supply, marketing support) can all vary significantly from one brand to the next, so two franchises with a similar upfront cost can end up very different in what you’re actually getting for it.

A brand’s story and quality credentials matter just as much. Hermanos sources its coffee directly from farmers in Colombia, then roasts every bean at its own UK roastery in Walthamstow, so quality control stays in-house at every stage rather than being handed off to a third party. That level of care has also caught the eye of the national press, with coverage in titles like Forbes and The Independent, a sign of how the brand is perceived by people with no stake in its marketing.

What Should Go Into a Coffee Franchise Business Plan?

A coffee franchise business plan should bring together the investment and fees covered above, how you plan to fund them, and a proper cash flow forecast that accounts for staffing, stock and rent from day one, rather than assuming turnover will cover everything straight away. Treat it as the starting point for your own due diligence, ideally alongside an accountant or business advisor.

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