Tag Archives: franchise

Starbucks Phenomenon

Reading Time: 4 minutes

Coffee is one of the most popular drinks which finds its lovers all over the world. Thus, coffee industry is a great place to set up your business and start getting decent margins. However, the rivalry is flourishing there, and it’s not that easy to surprise customers with something new, while internationally known giants are taking the most of the industry. One of the best examples is Starbucks. What constitutes its popularity? Why do people choose it over and over? The article below will answer all these questions.

  1. Mission Statement

The company is consistent in their vision across all levels of the business. This consistency creates a culture of living the mission statement which, in turn, encourages everyone in the company to promote the same vision to the customers. Every employee is coached on embodying the Starbucks ways of being, which establishes a consistently fresh and delightful experience for customers:

  • Be welcoming
  • Be genuine
  • Be considerable
  • Be involved

So, it’s always pleasant to visit a place where you will be welcomed, respected, your desires will be understood and realized as best as possible.

2. Personalization

This process started with the emphasis on personalizing the process of ordering your beverage. For Customers can choose a type of milk, name the syrup they want and even specify the amount of it.

What is more, Starbucks takes into account season changes and customers’ feelings and associations about them. So, in winter customers can enjoy gingerbread flavor in iconic red cups with Christmas ornaments, autumn presents us a lovely pumpkin spice drink which warms hearts and create a whole vibe around it, etc.

The last but not least is names on cups. It facilitates baristas to differ orders of consumers to prevent any sort of a mistake. However, it’s also a smart trick to create a bond with customers because a worker writes a name by his hand (sometimes with a smiling face or a heart). Therefore, an individual sees that the drink is made for them specifically, and according to Instagram posts, the writing adds some aesthetic on the look of the cup.

3. Consistency

Starbucks has over 20,000 stores, but it doesn’t engage into the simple mass-producing path to save money. Starbucks stores are consistent with the image and the message of the brand. One of the most critical aspects of Starbucks branding is the manner in which every part of the store emphasizes the importance of crafted elements. And though signage is obviously mass-produced, it never looks mass-produced. The signage still looks like somebody made it painstakingly by hand.

Surfaces are never regular, and rarely circular, but they are generally bent and formed in odd ways to emphasize the fact that someone took time to construct it by hand. There are also pictures which show the background of the café which opens a soul of the place. Nothing there is meaningless.

4. Affordable Luxury

Starbucks isn’t famous for its low prices; they have the opposite situation. Moreover, the brand positions itself as trendy and solid. So, the brand positioning and fancy cups make customers feel superior, and it’s always noticeable if somebody enters a room with a Starbucks cup in a hand. 

5. Work or Relax in Peace

This is where Starbucks really bucks the trend. Their coffee shops have been created to make you linger.

Want to go work somewhere different for a few hours? Starbucks and their strategically placed cafeterias will let you plug in and get to work for the price of one of their coffees. Similarly, if you want to rest with a good book, simply purchase the coffee of your choice, pick a comfy-looking chair, and have at it.

No one will bother you or request that you spend more money, stay as long as you need.

6. Social Media

Their full and active presence on social media is done in a way that speaks directly to the customers. Starbucks’ promotions on social media are strategically targeted to the audience in question which enforces online visibility as well.

What’s interesting is that Starbucks’s interior and exterior designs as well as the look of their beverage motivates consumers to post on social to appear modern, stylish and to beautify their pages in general.

7. Decent App

As part of its digital prowess, Starbucks has upped the game with its app. Instead of waiting in a boring line, you can choose, order, and pay for your drink using only your phone. A quick ping will tell you your drink is ready, so all you need to do is extract yourself from that cozy chair and go get it.

You’ll find all the promotions and deals on the app too. It saves you the hassle of hunting them down. Simply open up the app and see what takes your fancy. 

8. Quality and Approach to Serving

First, the ratio of coffee to water in every Starbucks coffee brew is much higher than in most other coffee houses. This makes the Starbucks coffee produce a more intense or stronger flavor. People who are used to a less concentrated coffee might find the strong taste of Starbucks coffee bitter or burnt.

Second, the Starbucks’ barristers undergo intense training, usually over 30 hours of training on every Starbucks drink from Frappuccino to Hot Chocolates. They’re also trained on the origins of the Starbucks coffee beans make them understand the beans and how to make them taste great.

Conclusion

These aren’t the only points that explain the success of Starbucks, but they are the most noticeable for customers. Through reading the article it’s also understandable how much we value the convenience and innovations of the brand which is made to condition us come back more and more, share opinion with mates, invite beloved ones there and help the franchise to get higher and higher incomes.

Sorces:

  1. https://avada.io/resources/why-starbucks-so-popular.html#:~:text=Starbucks%20has%20been%20helping%20customers,coffee%20into%20a%20customized%20experience.
  2. https://yourdreamcoffee.com/why-is-starbucks-so-popular/
  3. https://starbmag.com/why-is-starbucks-so-popular/
  4. https://www.thecommonscafe.com/the-global-phenomenon-of-starbucks/
  5. https://medium.com/@prakritimahato22/why-starbucks-is-famous-4557a38dd2f6

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Franchise business model for your start-up

Reading Time: 4 minutes

Introduction

I have been constantly questioning myself, what are the prerequisites for an innovation-driven venture to become successful and scale rapidly. Well, I realize that the success of a start-up truly depends on the various components such as team, timing, idea, access to the resources, and many more. However, in this short article, I would like to explore the business model as the main element of a successful start-up. Specifically, we will delve deeper into the franchise business model and we will try to discover the advantages and disadvantages of the model in the modern era driven by technology.

General context

First and foremost it important to explore the franchise business model in depth before we are moving further with our exploration. Basically, in a franchise agreement, a franchisee pays royalty to a franchise provider to get access to working business models, know-how, or even trademarks[1]. The conditions of the agreement may differ according to a business context. For instance, some franchise providers require to pay separately for purchasing franchises on top of royalty. The franchises in different forms have been around for at least 5 centuries and I still find franchises increasingly relevant in our modern society.

Examples of franchises

When we think about the franchise, most frequently pictures of McDonald’s, KFC, or even Subway pop up in our brains. These humongous companies are the most successful examples of franchises with over $20 billion in revenue every year[2]. However, the usage of the franchise business model is not solely bound to the food industry. There are a plethora of franchises in the real estate, retail, travel, beauty industries. Century 21 company is an outstanding example of a successful real estate organization that provides franchises to the market. The annual revenue of the organization is nearly $1.5 billion[3]. Another example that is worth mentioning comes from the software industry, where Eazi company provides a “business in a box” solution that enables franchisees to create app development and website development business. The organization provides partners with the app building platform, training, and branding. Also, the partners are obliged to operate under the name of the Eazi company[ 4 ]. I have outlined only a small fraction of the all existent types of franchises, however, it was important to provide a small glimpse into current use cases of the model.

Franchise for a start-up?

Why to even bother with the franchise if there are plenty of other working business models for my start-up? It is crucial to separate two distinct standpoints and answer two questions. First, are you willing to start a company with minimum risks by adopting something that works already? Second – are looking for a business model that will accelerate your venture and that will help you scale?

In the first case scenario, purchasing the franchise has a plethora of advantages as well as disadvantages. First and foremost, a franchisee does not need comprehensive business expertise. Usually, when you purchase a franchise, a franchisor offers you support and training to educate you, help you to gain experience in the industry, and reduce risks. Secondly, when one buys a franchise, he gets brand recognition that has been already built. Thereby you receive access to the customer base which is very difficult to build when starting the business.[5].Finally, you are still your own boss. From another perspective, the initial investment into the franchise may be high. Also, in some agreements, you will be paying royalties additionally. Secondly, the franchisor limits your creativity, because your business cannot alter the business model that was presented to you by a franchisor. Finally, financial data is not private. All of the financial data is being shared with the franchisor.[5]

In the second case scenario, franchising your business to others brings a huge amount of opportunities. One of the main components of a successful start-up is scalability. Franchising helps to grow your business rapidly and cost-effectively [6]. Since you do not need to invest in hiring new people, renting a new place, exploring new markets. Also, it is easier from the management standpoint, because franchisees manage the business by themselves and they are highly motivated to make the business profitable. [6]. It is worth mentioning that brand recognition positively correlates with brand recognition since every franchise helps to grow your brand. On a different side, you should have a successful business in order to be able to sell the franchise. Franchising is not an investment solution, it is rather an option to scale your business and increase revenue[6]. Also, your brand awareness should be already established. Another concern, that may not be that obvious is consistency in offered products and services. In my view, it is difficult to preserve the high-level quality of service or products that are being offered by all parties in a franchise. Since I believe that some products or services may be slightly altered due to the preferences of a franchisee, thereby it may reduce quality.

Conclusion


As I mentioned in the beginning, the success of a start-up depends on numerous components and no one can guarantee to you that a certain business model will grant you success. However, if you are starting or growing your business, it is crucial to consider all possible solutions that will lead you to success. In the article, we touched upon franchise for your business and tried to uncover all pros and cons of the business model. So now you should be better familiarised with franchising and you are equipped with one more option to consider.

Sources:

  1. https://www.nexea.co/25-business-models-for-every-startup/
  2. https://www.statista.com/statistics/208917/revenue-of-the-mcdonalds-corporation-since-2005/
  3. https://www.owler.com/company/century21
  4. https://www.eazi-business.com/
  5. https://franchisebusinessreview.com/post/franchise-advantages-disadvantages/
  6. https://www.nibusinessinfo.co.uk/content/advantages-and-disadvantages-franchising-your-business
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