Franchising opportunities for a coffee shop in Romania
Coffee is an integral part of everyday life in Romania. Especially in the morning, Romanians often share a cup of coffee with their neighbors or friends, which leads to long conversations, and coffee shops become communication centers for like-minded people. Groups of people often gather in these establishments not only to spend their free time, but also to discuss current issues, business projects or simply to enjoy art. Yes, art, as coffee shops in Romania are often turned into exhibition halls and galleries for lovers of painting and other types of creativity. So it’s no surprise that in recent years, independent coffee shops have made a significant contribution to the country’s atmosphere, attracting more and more locals. The popularity of the ‘coffee to go’ and ‘home ceremony’ culture also persists in Romania, leading to an increase in the number of such establishments.
The coffee industry in Romania is growing rapidly
Soluble coffee is widely recognised and popular among the diverse consumer categories in the country, owing to its rich and fruity taste. The instant coffee market in Romania was valued at $165.5 million in 2020, at a compound annual growth rate of 5.05%. This market is forecast to reach $234 million by 2027, judging by the growing popularity and expansion of speciality cafes and coffee shops. In 2018, for instance, their number in the country increased by more than 25%. Popular chains such as McCafé, Starbucks and Caffé Nero all have a presence in Romania. The Bucharest Coffee Festival also promotes coffee culture.
Although the specialty coffee market in this country is less developed compared to instant coffee, it continues to grow due to the emergence of specialty roasters and shops catering to the demand for high quality coffee. This includes the specialty shop Hotspot Coffee, which offers its visitors the best of the invigorating beverage with on-site tasting and delivery anywhere in the country. Given this dynamically developing popularity of coffee establishments in Romania, the network of popular brands is growing both inside and outside the country. As a consequence, the practical application of coffee shop franchises in Romania is rapidly developing.
What is a coffee shop franchise and how does it work?
In light of the growing popularity of coffee establishments and the attractive atmosphere of cafes, it is not surprising that many entrepreneurs in Romania are turning their attention to coffee shop franchising. A franchise is an opportunity to operate the brand and business model of a franchisor, who offers other entrepreneurs the chance to become business owners under certain conditions. In short, buying a franchise is a partnership with a successful business that has chosen franchising to expand, but gives local entrepreneurs the right to own and operate their business. It gives the franchisee full support, brand, advice and business model. This allows newcomers to operate on a proven model without having to make complex business decisions.
The benefits of buying a franchise include a finished product, brand, marketing and support. You also become part of a larger network and receive support from the franchisor. The important thing here is to choose a franchise that is right for you.
According to experts and analysts, the largest franchise project in Romania remains the chain of convenience stores LaDoiPasi, which has been developed by the local branch of retailer Metro Cash & Carry since 2012. At the moment, about a thousand shops operate under this brand sign. Another franchise network is HotspotCoffe coffee shops with a huge assortment of high-quality Arabica and Robusta varieties to suit every taste. Here everyone will be able to find their drink, so the growth in popularity of the network is increasing every year. Another major franchise network that should not be missed is 5 To Go coffee shops (over 400 outlets across the country).
5 to go – a combination of taste, quality and success
The 5 to go coffee shop chain is looking to expand and already has more than 400 outlets across Romania. Plans include development in small and medium-sized towns and reaching 1,000 shops nationwide by 2028.
Founded in 2015, the company, which controls 49% of the branded coffee shop market in Romania, aims to achieve a turnover of €24m ($23.4m) by 2022, and double this figure if further success is achieved. The company’s revenue in 2021 has almost quadrupled compared to 2020.
5 To Go is emphasizing further regional expansion over the next five years, especially in cities with a population of at least 10,000, with the aim of reaching 1,000 shops in Romania. Over the past 12 months, the share of takeaway shops outside Bucharest has increased to 40 per cent.
In addition, the 5 to go coffee shop chain is looking to strengthen its international presence. To do so, it is considering potential new markets in Spain, Germany, Bulgaria, Poland and Moldova. The company currently operates successful shops in the UK, France, Belgium and Hungary.
The company is also looking to expand its retail operations and is exploring consumer trends that could further enrich their product range under the 5 to go private labels.
Lucianu Bedilă, one of the co-founders of 5 to go, says that consumers associate the coffee brand with the quality and variety of products. Coffee remains the backbone of the product portfolio, accounting for more than 70 per cent of total turnover. 5 to go coffee shops also support local entrepreneurs in small and medium-sized towns – becoming official coffee suppliers.
Today, 5 to go is the largest chain of branded coffee shops in Romania. It surpasses Starbucks with its 60 outlets and McCafé with about 40 outlets.
What is the best style of coffee shop franchise to choose and what do you need to be aware of when opening your coffee business?
The figures obviously testify to the Romanians’ passion for coffee. This promises many prospects for entrepreneurs looking to enter the industry. Let’s take a look at three popular styles of coffee franchises:
- Coffee House or Coffee Shop. This format creates a cosy and inviting space where people can enjoy the atmosphere and coffee. It offers a wide variety of coffee drinks ranging from classic espresso drinks to drip coffee and signature recipes. In addition to coffee, these places usually offer pastries, sandwiches, salads and desserts, and the aim is to create an atmosphere for socializing and relaxing.
- A coffee shop or coffee bar focuses on a variety of coffee drinks and trendy design. Here you will find different types of coffee, from espresso to cold brews. Coffee bars also offer light snacks and desserts. They create a modern atmosphere and offer a comfortable space for meetings and work.
- Drive-through, kiosk or take-and-go concept. This format targets customers who need quick access to coffee. These are typically drive-through coffee shops, coffee kiosks or takeaway shops located in high-traffic areas such as airports or busy streets. The focus is on speed of service and accessibility, and menus are limited for customer convenience.
There are a variety of franchise styles in the coffee industry, each offering a unique experience and approach to customer service. Based on the choice of franchise concept, aspiring businessmen should plan their actions by seeking help in accompanying them.
Each franchise offers different types of support for its franchisees, it is important to carefully study the contract and terms of co-operation to avoid unpleasant surprises. One of the key and most valuable services provided in a franchise is legal support. It is better if it is free of charge and valid for the entire term of the agreement, and will include: assistance in choosing the form of business to open a coffee shop, reviewing and adjusting the lease agreement, verification of ownership, assistance in the registration of personnel, tax advice, counseling and implementation of HACCP. The franchisee will also need assistance in: choosing a location for the coffee shop, selecting equipment, working with reliable suppliers and organizing logistics, recruiting and training staff, menu development and marketing support. These services will help the franchisee to create and develop successful coffee shops in Romania, which will further delight visitors with their uniqueness and hospitality.