Starbucks

QUESTION TO ASK A FRANCHISOR

What is the background of the company and its performance record?

Starbucks was founded by Jerry Baldwin, a English teacher, Zev Siegh, a history teacher and Gordon Bowker, a writer. It was first opened in Seattle, Washington on 30 March 1971. 19,763 stores in 59 countries, while there is 129 stores in Malaysia inculding 7 stores at Johor, 3 stores at Kedah, 41 stores at Kuala Lumpur, 3 stores at Malacca, 1 store at Negeri Sembilan, 5 stores at Pahang, 12 stores at Penang, 3 stores at Perak, 1 stores at Putrajaya, 6 stores at Sabah, 5 stores at Sarawak and 40 stores at Selangor.

What is the company's current financial status?

(Refused to answer)

What are the names, address, and phone numbers of existing franchisees in my trade area?

Name        : Alpha Angle Starbucks
Address    :  Lot G25A, Ground Floor, Jusco Alpha Angle, Jalan 3/27A, 53300 Kuala Lumpur.
Telephone : +603-4149 2842

Describe how you train and mentor your franchisees.

• Provide a pre-opening training before working
• Training classes for one month.
• Train to know the coffee name, the recipe.
• Keep giving support and training
• Held an annual training program

If at some point I decided to exit the franchise relationship, how does the exit process work?

It is not allowed to exit the franchise relationship.

In what ways do you work with a franchisee who is struggling?

We will decided whether to work with or end the relationship of franchisee if there is a chance to earn more. Renovation of the current franchisee, lending money and also release some promotion item to help it. Organizing some event to raise the reputation of that franchisee.

QUESTION TO ASK CURRENT FRANCHISEES

How much does your franchise gross per year? How much does it net? Are the procedures followed to make royalty payments to the franchisee burdensome?
(Private confidential)


Are the financial projections of revenues, expenses, and profits that the franchisor provided me accurate in your judgment?
Yes, it does.


Does the franchisor give you enough assistance in operating your business?
Yes, they do. They provide the necessary training for us to let us know what is the name of the coffee and how to cook that.

How many hours, on average, do you work a week?
All the staff have to work for 6 days a week, 8 hours per day. They only have 15 minutes breaks for them to rest and having lunch.

How often do you get a vacation?

Normally I would not get a vacation, we are allowed to have a few days of vacation. I won't usually use that unless it is important and have to take leave.

Have you been caught off-guard by unexpected costs or expectations?

Until now, I don't ever encounter this problem before. The costumer here were quite friendly and also patient. Sometimes small expectation happen but it won't cause a big problem.

Does your franchisor provide ongoing training and support to you?

Yes, as what I mention just now. Before working, there is a one month training class for them to know the coffee name and other related information.

If you had to do it all over again, would you purchase a franchise in this system? Why or why not?

Yes, I will because this is my passion to do it. Besides it is also quite popular among the working people and it is also easy to make profit from it.

YOURSELF

Are you qualified to operate a franchise successfully? Do you have adequate drive, skills, experience, education, patience, and financial capacity? Are you prepared to work hard?

Yes, I.m qualified to operate a franchise. As for my skills, there are some that is adequate for me. I had 5 years of experiences to operate it, education will be enough to handle most of the situation but my patience still have to work on. I'm normally  want to get my things done quickly and if someone did not finish it in time, I will get mad and want him or her to done it now. So this is what I need to work on. As for my financial, it will be enough for me and I don't have this problem at all. I also work hard to ensure a maximum performance and result.

Are you willing to sacrifice some autonomy in operating a business to own a franchise?

This depends on the situation. If I don't have any financial problem and it is worth to do it, then I will sacrifice some autonomy in operating a business to own a franchise.

Can you tolerate the financial risk? Would business failure wipe out financially?

Yes, I can as there is always a financial risk doing business no matter how good your business is, how high profit your business is. It won't been wipe out so easily as it will rises again.

Can you juggle multiple tasks simultaneously and prioritize various projects so that you can accomplish those that are most important?
Yes, I can. There are always so many task to do so. After accepting a project, I will set a timeline for myself to do and complete it within the timeline. If there is another projects coming in, I will go through it and also the deadline to decide which to complete first.

Are you genuinely interested in the product or service you will be selling? Do you enjoy this kind of business? Do you like to sell?

Yes, I love it so much. The reason that I joining this career because I love coffee so much. Selling coffee to the customer and they enjoy it. I love to share good things to others so that they can also enjoy it.

Do you enjoy working with and managing people? Are you a “team player?”
Not really as I'm quite impatient sometimes and I need someone to complete his job immediately. But if the person works fast, done well and well co-operated with me, I'm enjoy this and this will make a good team to organize a business.

Will the business generate enough profit to suit you?
I will say it is enough for me. We open at the area of college which means it will sightly lower than open at a business area. Most of the customers are student, and normally they seldom buy it. Our target audience is more to working people, business man and lucky we choose to open it in the shopping mall and that helps to increase our profit.

Has the franchiser investigated your background thoroughly enough to decide if you are qualified to operate the franchise?
Yes.

What can this franchiser do for you that you cannot do for yourself?
The recipe as I cannot create a new coffee and clam this is from Starbucks and different people have different taste. Maybe I feel this coffee is too perfect for me but the others may not thinks so. The coffee bean from them. Although I can get the coffee bean on my own but the coffee bean they use are special, it can use the same coffee bean from different source, it will taste terrible.

THE FRANCHISER AND THE FRANCHISE

Is the potential Market for the product or service adequate to support your franchise? Will the prices you charge be in line with the market?
Yes, it do support us. As Starbucks is worldwide company and with the potential market it defined support us. The prices will also be the same as the market price.

Is the market's population growing, remaining static, or shrinking? Is the demand for your product or service growing, remaining static, or shrinking?
Well, it is growing slowly and even some teenagers start to love our coffee. We need to have more open in different places to full-fill the demand of our coffee.

Is the product or service safe and reputable?
Our products is safe and taste good. We purchase high quality coffee bean and sell them along with fresh, rich-brewed beverages. We do also sell food besides coffee. We do also have a great environment, services provided just to let our customer feel comfortable and enjoy in it. Free Wi-Fi also provided to the customers at every stores. Customers can enjoy coffee while surfing website.

Is the product or service a passing "fad", or is it a durable business idea?
Starbucks is a worldwide company that sell finest coffee for over 40 years until now. You can now see almost everyday there will be people holding a cup of Starbucks coffee in their hand. Our coffee still popular among people. It is hard for us to say it is not a durable business idea as it can still durable for many years. It is definitively a durable business idea.

What will the competition, direct or indirect, be in your sales territory? Do any other franchisees operate in this general area?
We sell coffee and also some dessert. Our competitor will be The Coffee Beans, San Francisco Coffee, Oldtown White Coffee, Gloria Jeans and Secret Recipe.

Is the franchise international, national, regional, or local in scope? Does it involve full- or part-time involvement?
Starbucks is international, worldwide company. It has more than 19763 stores in 59 countries.

How many years has the franchiser been in operation? Does it have a sound reputation for honest dealings with franchisees?
Around 14 years since 1998. We deal with them with our full responsibility and earn trust and respect of our customers and partners.

How many franchise outlets now exist? How many will there be a year from now? How many outlets are company-owned?
There were 19,763 stores exists in 59 countries while Berjaya group owned 115 stores.

How many franchises have failed? Why?
(Refused to answer)

How many franchisees have left the system within the past year? What were their reasons for leaving?
It is impossible to left the system because we don't have franchise but outlet.

What service and assistance will the franchiser provide? What kind of training program does the franchiser offer? How long does it last? What topics does it cover? Does the franchise offer ongoing assistance and training?
We make the finest coffee, dessert, a comfortable environment with free Wi-Fi internet to the customer to enjoy. As for the training program, the new employer need to attend a training course on the name of the coffee beans and also the recipe. This training course last for one month before started to working.

Will the franchise perform a location analysis to help you find a suitable site? If so, is there an extra charge for doing so?
We are not in charge in finding a site as our headquarter in charge in making this decision.

Will the franchiser offer you exclusive distribution rights for the length of the agreement, or may it sell to other franchises in this area?
It won't be sell to others as our company is a large company and it won't happen.

What facilities and equipment are required for the franchise? Who pays for construction? Is there a lease agreement?
These facilities and equipment are brew machine, supplier, table, chair, Wi-Fi, food and others. These facilities and equipment were pay by our company.

What is the total cost of the franchise? What are the initial capital requirements? Will the franchiser provide financial assistance? Of what nature? What is the interest rate? Is the franchiser financially sound enough to fulfill all its promises?
(Refused to answer)

How much is the franchise fee? Exactly what does it cover? Are there any confining fees? What additional fee are there?
Starbucks actually not franchise but outlet. They provides variety of coffee and stores for different market.

Does the franchiser provide an estimate of expenses and income? Are they reasonable for your particular area? Are they sufficiently documented?
(Refused to answer)

How risky is the franchise opportunity? Is the return on the investment consistent with the risk?
It is hard to say, it depends on the situation. Yes it might be risky and in return it might not be consistent.

Does the franchiser offer a written contract that covers all the details of the agreement? Have your attorney and your accountant studied its terms and approved it? Do you understand the implications of the contract?
We hire a lawyer to help us in this contract. Having them to explain the details and agreement.

What is the length of the franchise agreement? Under what circumstances can it be terminated? If you terminate the contract, what are the costs to you? What are the terms and costs of renewal?
(Refused to answer)

Are you allowed to sell your franchise to a third party? Does the franchiser reserve the right to approve the buyer?
No permission is allowed to sell it.

Is there a national advertising program? How is it financed? What media are used? What help is provided for local advertising?
Almost all the advertisements are done locally. Newspaper, banner and flyer are most commonly been used as a media.

Once you open for business, exactly what support will the franchiser offer you?
They will provide training course for the new employers, buy all the necessary equipment, supply the coffee beans and other necessary ingredients.

How does the franchise handle complaints from ad disputes with franchisees? How well has the system worked?
(Refused to answer)


**All Starbucks are an outlet, there are no Starbucks franchise.