Ever wondered what it takes to run one of the UK’s most beloved coffee chains? Costa Coffee has established itself as a household name, with its signature brews and cosy cafes spread across the country. But owning a piece of this successful brand comes with its share of costs, qualifications, and requirements.
In this blog, we’ll explore the Costa Coffee franchise cost, the steps to becoming a franchisee, and whether it’s the right investment for you. If you’re considering stepping into the coffee shop business, keep reading to find out all the essential details.
Why Is Costa Coffee a Popular Choice for Franchise Investors?
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Costa Coffee is not just a coffee shop; it’s a globally recognised brand with a loyal customer base. As of 2025, it operates in over 30 countries, making it a trusted name for coffee lovers everywhere. But why is it such a popular choice among franchise investors in the UK?
- Proven Business Model: Costa Coffee offers a tried-and-tested formula for success.
- Brand Loyalty: Its long-standing reputation means franchisees can expect a steady customer flow.
- Support System: Costa provides comprehensive training, marketing assistance, and operational support, ensuring franchisees have the tools they need to succeed.
With its strong market presence and support, Costa Coffee is a top pick for aspiring entrepreneurs.
How Much Does It Really Cost to Start a Costa Coffee Franchise?
Starting a Costa Coffee franchise involves a significant financial investment. The total cost depends on factors such as the store type, location, and size. Below is an in-depth breakdown of the costs associated with opening a Costa Coffee franchise:
| Cost Category | Estimated Range (£) | Description |
| Franchise Fee | 20,000 – 30,000 | A one-time fee paid to Costa Coffee to secure the rights to operate under their brand name. |
| Store Fit-Out | 150,000 – 500,000 | Costs for renovating and designing the store to match Costa Coffee’s specifications and standards. |
| Equipment | 50,000 – 100,000 | Includes coffee machines, grinders, display cases, furniture, and other essential equipment. |
| Initial Stock | 5,000 – 10,000 | Inventory of coffee beans, syrups, cups, and other consumables to start operations. |
| Working Capital | 25,000 – 50,000 | Funds to cover operational expenses such as payroll and utilities until the business becomes profitable. |
| Legal and Professional Fees | 5,000 – 10,000 | Costs for solicitors, accountants, and other professionals needed to set up the business. |
Total Investment: £250,000 – £800,000
Additionally, franchisees must account for ongoing costs:
- Royalty Fee: Costa Coffee charges 6-7% of net sales as a royalty fee for using its brand and systems.
- Marketing Fee: Franchisees contribute around 2% of net sales to a national marketing fund that supports brand promotion.
The costs will vary depending on the store type you choose. For example, a large retail park unit with a drive-thru facility will require a higher investment compared to a small high-street store.
Factors That Impact the Cost
- Location: Urban areas with high foot traffic generally have higher real estate and fit-out costs.
- Store Type: Drive-thru units or large stores require higher initial investment than compact kiosks.
- Size of the Store: Larger stores mean higher costs for furniture, equipment, and inventory.
What Are the Key Qualifications and Requirements to Open a Costa Coffee Franchise?
Costa Coffee looks for franchise partners who share their passion for quality, customer service, and business success. While previous experience in the food and beverage industry can be advantageous, it’s not always mandatory. However, there are specific qualifications and requirements you must meet to become a Costa Coffee franchisee:
Financial Capability
You must demonstrate the financial capability to invest between £250,000 and £800,000, depending on the store type and location. This includes the initial investment as well as working capital to sustain operations in the early stages.
Business Acumen
Costa Coffee prefers franchisees with a strong background in business management or entrepreneurship. You should have the ability to make strategic decisions, manage staff, and oversee daily operations effectively.
Hands-On Commitment
Franchisees are expected to be actively involved in the business, particularly during the early stages. This means overseeing operations, managing staff, and ensuring that the store upholds Costa Coffee’s high standards of quality and service.
Multi-Unit Potential
While Costa Coffee allows you to start with a single store, they prefer franchisees who have the potential and ambition to manage multiple units as their business grows.
Local Market Knowledge
Understanding the local market and community is crucial. As a franchisee, you’ll need to select a store location that fits Costa Coffee’s target customer profile and complements the surrounding businesses.
Alignment with Brand Values
Costa Coffee places a strong emphasis on sustainability, ethical sourcing, and customer satisfaction. Franchisees are expected to align with these values and represent the brand positively.
What Is the Application Process for a Costa Coffee Franchise?
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Becoming a Costa Coffee franchisee is a multi-step process designed to ensure only the most qualified and committed individuals are selected. Here’s an expanded look at the application process:
Step 1: Initial Inquiry
Start by submitting an expression of interest through Costa Coffee’s official franchise website. This involves filling out a form with basic information about yourself, including your background, financial capabilities, and reasons for wanting to join Costa.
Step 2: Preliminary Assessment
Once your inquiry is received, Costa Coffee’s franchise team will review your application. They’ll assess whether you meet their financial and experience criteria before moving forward.
Step 3: Initial Interview
If your preliminary application is successful, you’ll be invited to an interview. This can be conducted virtually or in person and is an opportunity for Costa to learn more about your skills, goals, and enthusiasm for the brand.
Step 4: Detailed Application and Business Plan
You’ll then be required to submit a comprehensive business plan. This should include:
- Your vision for the franchise
- Financial projections
- Market analysis of your preferred location
- Staffing and operational strategies
Costa will use this plan to determine if you have a clear and realistic understanding of what it takes to run a successful franchise.
Step 5: Due Diligence
During this stage, Costa conducts background checks and verifies your financial information. They’ll confirm that you have the required funds and resources to invest in the franchise.
Step 6: Panel Interview
You’ll present your business case to a panel of Costa Coffee executives. This is a more formal interview where you’ll need to demonstrate your business knowledge, commitment to the brand, and strategic thinking.
Step 7: Site Selection
If you pass the panel interview, you’ll work with Costa’s property team to identify and approve a suitable location for your store. They’ll provide guidance on finding high-footfall areas and assessing lease agreements.
Step 8: Final Approval
After the location is confirmed, you’ll sign the franchise agreement and any other necessary documents. This is the official green light to move forward with your store setup.
Step 9: Training and Setup
Before your store opens, you’ll undergo comprehensive training in Costa Coffee’s operations, customer service, and business management. During this time, your store will also be fitted out to meet Costa Coffee’s design and operational standards.
Timeline for the Application Process
The entire process, from initial inquiry to store opening, typically takes 6 to 12 months, depending on factors like location selection and store setup time.
What Are the Different Store Types and Locations for Costa Coffee?
Costa Coffee offers a variety of store formats to cater to different customer needs and locations. The flexibility in store types makes it easier for franchisees to align their business with local market demands. Here’s an in-depth look at the store types available:
1. High Street Stores
These are Costa Coffee’s traditional coffee shops, typically located in busy town centres and urban areas. They are designed to serve a steady stream of walk-in customers who are looking for a place to relax, work, or socialise.
- Key Features:
- Spacious seating areas for dine-in customers.
- Full-service coffee and food menu.
- High visibility and accessibility in busy areas.
- Best Locations: High streets, shopping districts, and business centres with high foot traffic.
- Cost Considerations: Generally, high street stores have higher rent costs due to prime real estate locations.
2. Retail Park Units
Retail park units are larger stores, often featuring drive-thru facilities. These stores cater to a broader range of customers, including those who prefer takeaway services.
- Key Features:
- Drive-thru service for convenience.
- Ample parking for customers arriving by car.
- Larger store layout to accommodate more customers.
- Best Locations: Retail parks, suburban areas, and locations near major roadways.
- Cost Considerations: These units typically require higher investment due to the size of the premises and the drive-thru setup.
3. Travel Hubs
Costa Coffee operates compact stores in airports, train stations, and service areas. These stores are strategically located to serve busy travellers who need quick access to coffee and snacks.
- Key Features:
- Smaller footprint, focused on takeaway service.
- Optimised for high customer turnover.
- Simplified menu to cater to busy customers.
- Best Locations: Airports, railway stations, and motorway service stations.
- Cost Considerations: While the rent in travel hubs can be high, these stores generate significant revenue due to constant customer flow.
4. Shopping Centre Kiosks
Costa Coffee also offers small-format kiosks in shopping centres and malls. These stores are ideal for capturing the attention of shoppers who want a quick coffee break.
- Key Features:
- Limited seating or no seating, with a focus on takeaway.
- Compact size, designed for efficient operations in smaller spaces.
- Best Locations: Malls, shopping centres, and department store entrances.
- Cost Considerations: These are more affordable to set up compared to high street stores, but revenue may be lower due to the smaller size and menu offerings.
5. Costa Express
Costa Express is a self-service coffee bar format, offering high-quality coffee in non-traditional locations. These are automated coffee machines installed in places like petrol stations, office buildings, and convenience stores.
- Key Features:
- Low-cost entry option with minimal setup requirements.
- Operates without direct staff involvement.
- Offers Costa Coffee’s signature coffee through state-of-the-art vending machines.
- Best Locations: Petrol stations, supermarkets, offices, and hospitals.
- Cost Considerations: Costa Express has the lowest initial investment, but the revenue is also lower compared to full-service stores.
Factors to Consider When Choosing a Location
Selecting the right location is critical to the success of your Costa Coffee franchise. Here are some key factors to consider:
- Foot Traffic: High foot traffic areas, such as high streets or shopping centres, are ideal for maximising sales.
- Accessibility: Ensure the location is easy to access for both pedestrians and vehicles.
- Demographics: Choose a location that aligns with Costa Coffee’s target audience, which includes professionals, students, and families.
- Proximity to Complementary Businesses: Locations near offices, gyms, schools, or retail stores tend to attract more customers.
- Parking Availability: Retail park units and drive-thru stores should have ample parking to cater to customers arriving by car.
- Cost of Occupancy: Assess the rent, utilities, and other operational costs associated with the location.
How Profitable Can a Costa Coffee Franchise Be in the UK?
Owning a Costa Coffee franchise can be highly lucrative, given the brand’s strong reputation, consistent demand, and support for franchisees. However, profitability depends on several factors, including location, store type, and operational efficiency.
Revenue Potential
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A typical Costa Coffee store in a high-traffic area can generate revenues of over £1 million annually. Smaller formats, like kiosks or Costa Express machines, generate less revenue but are still profitable due to lower setup and operational costs.
- Profit Margins: Successful Costa Coffee franchisees report profit margins ranging between 15% and 20% of annual revenue after accounting for expenses.
- High Performing Stores: Drive-thru units and stores in prime locations, such as travel hubs, often outperform traditional high street stores in terms of revenue.
Key Factors That Influence Profitability
- Location:
- High foot traffic areas, such as busy high streets, travel hubs, and retail parks, tend to generate higher revenues.
- Poorly chosen locations with limited visibility or accessibility can significantly reduce profitability.
- Store Type:
- Larger stores with drive-thru facilities tend to attract more customers but come with higher operating costs.
- Smaller formats, like kiosks, may have lower revenue potential but also have lower operational expenses, making them a cost-efficient choice.
- Operational Efficiency:
- Maintaining high standards of customer service, minimising waste, and controlling costs are crucial for profitability.
- Efficient staffing is also key to managing labour costs without compromising customer satisfaction.
- Competition: Areas with limited competition from other coffee chains or independent cafes are more likely to yield higher profits.
Breakdown of Typical Expenses
Here’s an overview of the expenses that impact a franchisee’s profitability:
| Expense Category | Description |
| Cost of Goods Sold (COGS) | Includes the cost of coffee beans, syrups, food items, and packaging. Typically accounts for 25-30% of sales. |
| Labour Costs | Salaries for baristas and managers, which account for 20-25% of revenue. |
| Rent and Utilities | Varies by location, often accounting for 10-15% of revenue. |
| Franchise Fees | Royalty (6-7% of net sales) and marketing fee (2% of net sales). |
| Other Operating Expenses | Cleaning, maintenance, insurance, and equipment repair costs. |
Maximising Profitability
Here are some strategies for increasing profitability as a Costa Coffee franchisee:
- Focus on Prime Locations: Choose areas with high visibility and customer traffic.
- Offer Excellent Customer Service: Create a welcoming environment to encourage repeat visits.
- Upsell and Cross-Sell: Train staff to recommend add-ons, such as pastries, to increase average spend per customer.
- Control Costs: Monitor expenses such as utilities, labour, and inventory to reduce waste.
- Embrace Costa Express: Consider adding Costa Express machines to diversify revenue streams in non-traditional locations.
Long-Term Potential
Once a franchisee establishes a successful first store, Costa Coffee often supports expansion into multi-unit operations, allowing franchisees to open additional locations. This can significantly boost profitability over time.
Conclusion
Starting a Costa Coffee franchise requires significant financial investment, passion, and dedication. With a trusted brand, comprehensive support, and multiple store formats, Costa Coffee offers a solid business opportunity for the right entrepreneur.
If you meet the qualifications and are ready to make the investment, this could be your chance to join one of the UK’s most successful coffee brands. Take the first step by reaching out to Costa Coffee for more information today!
Frequently Asked Questions
How much is the initial investment for a Costa Coffee franchise?
The total initial investment can range from £250,000 to £800,000, depending on store type and location.
What kind of training does Costa Coffee provide?
Costa Coffee provides comprehensive training programs covering operations, customer service, and management.
What are the ongoing fees for a Costa Coffee franchise?
Franchisees are required to pay a royalty fee (6-7% of net sales) and a marketing fee (around 2% of net sales).
How long does it take to open a Costa Coffee franchise?
The process can take 6 to 12 months, from application to store opening.
Can I operate multiple Costa Coffee franchises?
Yes, Costa prefers franchisees with the potential to manage and grow multiple units.
Do I need experience in the food and beverage industry?
While it’s not mandatory, having experience in the food, retail, or customer service industries can be advantageous.
What factors should I consider when choosing a location?
Look for high foot traffic, local demographics, parking availability, and proximity to complementary businesses.
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