Cotti Coffee has launched a franchise programme in the UK with no franchise fee, trade title Propel reported on 29 October. The fee waiver lowers the cost of joining. It does not cover the rest of what opening a shop costs.
01What the brand has announced
According to L'Express Franchise, reporting Propel, the chain has opened seven shops in London since February. Its first shop outside London, on New Street in Birmingham, is due to open later this year.
The company is offering partners no franchise fee and global brand support. It is looking for partners across the UK.
The coverage does not say whether partners pay a royalty, supply charges or a marketing levy. It gives no figure for fitting out a shop and no investment range.
02What a no-fee franchise still costs
The franchise fee is the price of joining a network. It is only one line in the cost of opening.
A new coffee shop still needs a fit-out, equipment and opening stock. It also needs working capital to pay wages and rent while sales build.
Most franchise agreements also carry ongoing fees. These are usually a share of your sales, paid every month.
03What a lender will want to see
A lender looks at the whole cost of opening, not just the fee. It then checks whether the forecast can cover the repayments after every ongoing fee.
So ask any franchisor for every fee in writing before you commit. Our new guide on how franchise fees work explains what to ask for and how to compare two fee models.
When you know the full cost, we can help you look at franchise finance options for opening your first unit.
