The Starbucks company is a coffeehouse that is quite peculiar in India compared to its activity in lots of other countries. Instead of offering traditional franchise opportunities, Starbucks has entered the Indian market through a 50:50 joint venture of which Tata group owns 50% through Tata Consumer Products and Starbucks Inc. own 50% through Starbucks Coffee Company. This partnership means that there is no way an individual entrepreneur can go out and buy equity in Starbucks and open and run a Starbucks Franchise in India.
Investment Considerations for a Starbucks Outlet in India
While direct franchising isn't available, understanding the financial aspects of establishing a Starbucks outlet can provide insight into the scale of investment required:
Initial Setup Costs
- Real Estate: It might sound obvious but getting the right place is very important. These monthly rents could be between ₹2 lakh to ₹10 lakh and depends on the city’s visibility and the site.
- Store Renovation and Design: Starbucks company standards include aesthetically appealing interiors which come with higher initial interior setting costs between 200, 000 and 500,000 Rupees.
- Equipment: The quality coffee machines, grinders and all other essential paraphernalia may range from ₹25 lakhs to ₹50 lakhs.
- Licensing and Permits: Acquisition of licenses needed for operating food businesses like FSSAI and GST as well sanitary and safety clearances may cost about ₹5 lakhs to ₹ 10 lakhs.
Total Estimated Investment
With reference to the factors above, the total investment to set up a Starbucks store in India may Cost between 60 lakhs and 1.5 crores.
Operational Expenses and Profitability
Ongoing Expenses
- Staff Salaries: Pay scales depend on the employees’ experience and working location.
- Utilities: The common expenses include light bills, water bills and any other utilities.
- Inventory: Inventory control of coffee beans, pastries and other consumables must be done and effectively managed .
Revenue Potential
Starbucks needs to know that if it operates and locates its store well in India; it can record good sales revenues. For example, a single store or rather outlet may generate over ₹93,000 per day equating to approximately ₹30 lakh per month.
