Coffee-Bike: The franchise opportunity

Franchise: Coffee-Bike
Description: A mobile, self-sufficient coffee shop with a unique design.
Started in: 2010
Founders: Tobias Zimmer and Jan Sander
No. of franchises: Over 90
Coverage: UK, Germany, Netherlands, Austria, Romania, Czech Republic, Kuwait, Qatar, Saudi Arabia
Average cost per franchise: £10,550 (rental model) or £21,500 (purchasing model)
Website: https://coffee-bike.com/en/

Tobias Zimmer and Jan Sander founded Coffee-Bike in 2010. During their university studies, the duo identified that coffee is a high-margin product and by running a coffee shop this margin gets diminished by the high fixed costs.

They later saw someone on holiday selling coffee on a mobile stand and realised that this could be the solution to eliminate the fixed cost structure, and decided to develop their own Coffee-Bikes with an international business concept behind it.

From having only a few franchisees in Germany, the Coffee-Bike system has now expanded to franchisees in eight countries – inside and outside of Europe.

Moving into franchising

So how did you move into franchising?

We realised we couldn’t grow by operating bikes ourselves, managing employees and leading the company simultaneously. Franchising enabled us to grow the business exponentially and, at the same time, allowed many people to become entrepreneurs themselves.

Where did Coffee-Bike open its first franchises?

The first franchisees started at the beginning of 2011 in Germany.

How successful were those original franchisees?

Our first franchisees joined us when there were less marketing activities, we had less experience in the mobile coffee shop sector and the IT infrastructure wasn’t as comprehensive as it is now. Nevertheless they did very well. Our contract period is four years and first franchisees have begun to renew their contracts from 2011 as our system is sustainable and they want to continue being our partners.

The franchise opportunity

What makes the Coffee-Bike franchise different/unique?

Coffee is a great, high-margin product, but selling coffee in itself is no innovation. However our concept and the fact that the Coffee-Bike is manufactured by hand in our headquarters is certainly unique and many features make our tricycle stand out. On only 3m² of space, we have developed a complete, self-sufficient coffee shop. It can be operated for up to 14 hours without any external water or electricity connection.

What services do you offer?

The Coffee-Bike concept is one of the fastest growing and most innovative franchise systems in Germany. Our partners sell delicious organic coffee specialities, tea, fresh orange juice and snacks at their Coffee-Bikes, at locations and times they choose themselves. The Bikes can offer the whole product portfolio of a normal Coffee-Shop everywhere. Customers can also book them for private, public and corporate events.

How big is the market opportunity?

Over the last eight years, coffee consumption in the United Kingdom has increased by about 15% and this figure will double over the next 10 years. Another advantage is the steady growth in the consumption of sustainable, organic products in the UK.

Therefore our CO² neutral concept with a certified organic product portfolio is completely in line with current trends.

How many franchisees do you have today?

Today we have more than 90 franchise partners (including multi-unit entrepreneurs) who are active all over the world.

How is the brand marketed?

Our latest innovation in marketing is our GPS tracker for each Coffee-Bike, launching in 2016. People will be able to see all Bike locations live on our website and via the App which will make our mobile system even more visible to the public.

Of course we also carry out traditional marketing through our website, Facebook, Twitter, online franchise portals, offline fairs and the press. We also acquire events for our partners (they are also free to acquire their own events).

The perfect franchisee

What do you look for in potential franchisees?

We are not looking for a particular type of person regarding age or personal background. We welcome anyone who is motivated, has a passion for coffee, has good communication skills and the commitment to deliver an excellent service.

We have a Franchise Consultant who gives our partners all round support and we also operate an Event Portal featuring a wide range of events which our partners can sign up to. But we also expect our franchisees to take their own initiative, proactively look for events to attend and to run some of their own marketing.

So do franchisees work from an office, or are they home-based? Is it part-time or full-time?

Our franchisees are neither stuck in an office, nor do they have to stay at home. They can choose where and when they would like to work. They can also decide whether to work full-time or part-time.

How are franchisees vetted?

There are only a few steps to becoming our franchise partner:

• Online enquiry via our website or our franchise portals
• Participation at our FID
• Receipt of the precontractual clarification and the test login to our Online Shop
• START-Up Call: Analysis of your individual situation (via phone or in person)
• Signing of the franchise contract
• Hand-over and training

What do you offer franchisees that sign-up?

New partners receive comprehensive online and offline training and go through an 18-step-programme with our Franchise Consultant. Everyone gets accompanied every step along the way towards self-employment. There are also technical experts who are always happy to help.

We conduct extensive marketing and write a press release for every new partner. Franchisees can access several resources including an online shop, a tool for controlling the financials , an extranet with email templates and our Event Portal to sign up for events.

How much do franchisees pay and what are the ongoing franchise fees

The Coffee-Bike costs £12,490 (purchasing model) or £260,21 per month (rental model). The only ongoing fees are the franchise fee (12p) and the marketing fee (2p) charged for every coffee sold. On any other sold items (tea, hot chocolate, orange juice, snacks) there is no fee. There is no minimum monthly revenue target.

Success and growth

How successful are some of the franchisees today?

Most of our franchisees are very successful. They are benefitting from a low fixed costs structure and the extremely high profit margin for coffee. The best proof of concept is that some franchisees have already purchased their second and third bikes within their first years of operation.

How is the brand looking to grow?

We are growing quite fast. Our vision is to have 400 Coffee-Bikes across worldwide locations by 2019.

What is the potential of the business?

There is a big potential in the mobile coffee market and each franchisee is free to shape their own development. Whether you would like only one Bike or several, you are free to decide.

What will the challenges be in achieving that?

We provide our franchisees with a complete package of support. But the partners themselves need to put in the effort, sell the coffee, provide great service and acquire events. This might be challenging at times.

What awards has the business won?

Coffee-Bike is a multi-award winning business:

• 2011: First prize “Best Newcomer Germany“
• 2011: Finalist “DurchSTARTer 2011“ (5.000 €) – Federal Ministry of Economics
• 2012: First prize “Gründercampus Niedersachsen” (18.000 €) – Lower Saxony Ministry of Economics
• 2012: Finalist at the “enable2start 2012“ – Financial Times Germany