What should I check before buying a coffee franchise resale?
Look at the whole unit: morning-peak and drive-through or kiosk traffic, who holds the loyalty app’s customer data, mandated suppliers and bean contracts, how the lease ties to the franchise term, upgrades the franchisor may require, and how much the owner works the shifts.
The espresso machine matters, and there is a separate page on checking a coffee franchise’s espresso equipment.
The morning peak and how customers arrive
Ask for traffic by hour and by channel. Does the unit live on a drive-through or kiosk line, or on walk-in customers? The first can be limited by the site, the second by the surrounding foot traffic. Visit at the peak yourself and watch how the line moves, how long people wait and how many walk away.
Loyalty app, customer data and suppliers
Find out who holds the customer data from the brand’s loyalty app and what you may do with it. Ask which suppliers and bean contracts the franchisor requires, and whether any pricing is set by the system rather than by you. Those choices shape your costs and leave less room than an independent has.
Lease, term and refurbishment
Read how the lease and the franchise term fit together. A lease that ends before the franchise does, or the reverse, leaves a gap. Ask the franchisor in writing whether it will require refurbishment on transfer, and have your lawyer read both documents together before you commit to anything.
Who works the shifts
Ask how many opening shifts the owner covers and whether a trained manager can run the unit without them. A unit that depends on its owner is a different purchase from one with a settled team. Your accountant can help you read the staffing costs in the statements.
Related reading
13 pages on the same subject, grouped by topic.
Buying
- Expert answerHow do I check a coffee franchise’s espresso equipment before buying?
- Expert answerWhat should I do in the first month after buying a coffee shop?
- Expert answerCan you buy a Coffee Time franchise in Canada?
- GuideBuying a café or coffee shop in Canada
- Expert answerHow do I read a fast food franchise’s brand audit reports before buying?
- Expert answerShould I buy a pizza franchise or an independent pizzeria?
- Expert answerWhat should I check before buying a bakery franchise resale?
Due diligence
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Canadian Franchise AssociationIndustryInterested in Buying a Franchise?
- 02Business Development Bank of CanadaGovernment5 tips to finance a franchise purchase
- 03Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
- 04Business Development Bank of CanadaGovernmentAfter buying a business, what is the next step?
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