Success Stories

Starbucks Franchise Success Story

Inspired by the coffee-loving culture of southern Europe, the Starbucks Coffee Company has successfully brought its delicious brand of coffee to Americans all over. With an exquisite assortment of whole bean roasts and fine espresso beverages coming from the finest coffee growing regions around the world, Starbucks also boasts a selection of pastries, sweets and even coffee brewing supplies for home use. Yet at one point Starbucks was not as accessible to consumers as it is today. First started up in 1971 as a small store in a Seattle shopping center, Starbucks now, however, is one of the country's - and the world's - most popular coffee shop chains.

Surprisingly, however, it took over a decade for the business to start expanding. In fact, it was as late as 1983 that Howard Schultz, the marketing and retail director, made a trip over to Italy and discovered the potential for creating a real culture of coffee here in the United States. After running it by the owners, Schultz was able to convince them that Starbucks was the way to bring this trend to North America. Beginning by setting up a shop in the downtown area of Seattle, the number of stores soon grew to about 20 after which Shultz got together with a group of venture capitalists and was able to purchase - and change the name - of Starbucks. The company quickly expanded thanks to a series of wise business moves. These included attaining the important affiliation with Barnes and Nobles booksellers, launching well-executed mail order strategy, and a profitable IPO in 1992. Due to its success, Starbucks has become the model for a whole new type of coffee marketing and beverage culture in America. The amount of Starbucks coffee shops open today numbers just under 6,000 worldwide.

Although Starbucks does not put up franchises for sale, or even engage in sub-franchising, there are certain agreements that interested parties can seek. That's because while the company manages its stores directly, or via subsidiaries, it will also develop business relationships with other corporations, companies or groups of persons. The way it works is that this body is then allowed to build up and manage stores in the prearranged area of business.

For international endeavors, there are a select number of different models of business that Starbucks currently engages in. One of these is the joint venture scheme, in which the company affiliates itself in a mutually beneficial partnership with another organization. Inside the United States, this can be likened to the company's current relationship with Barnes and Nobles. Another type of structure employed by Starbucks is the license agreement, which gives a smaller company the right to conduct its operations, while being wholly owned by the Starbucks Coffee Company. The third way that Starbucks conducts its international operations is by direct company ownership. In this structure, Starbucks takes the role of the immediate owner and maintains an unobstructed presence in managing and developing the store sights of a particular place of business development and commerce.