Dutch Bros is like any other coffee chain out there, including how they operate when it comes to franchising.

Dutch Bros has been my favorite place to grab coffee for well over a decade now.

So much so, that I actually wanted to have one of my own.

I’m here to share exactly how their franchise requirements work and what their business currently looks like, in detail. 

Is Dutch Bros Coffee A Franchise You Can Own?

Dutch Bros no longer affers a franchise program for potential owners.

According to the Dutch Bros website, all Dutch Bros are now company-owned locations, and franchisees can no longer open a Dutch Bros location.

While it's unfortunate that Dutch Bros is no longer offering franchise opportunities, this decision may actually work in favor of potential investors.

By keeping all stores company-owned, Dutch Bros can maintain positive relations and meet the high standards their customers have come to expect from the brand. [1]

Additionally, the company's emphasis on promoting from within means that if you're passionate about the brand and willing to put in the hard work, there may still be opportunities to grow and advance within the organization.

While owning a Dutch Bros franchise is no longer an option, there are still plenty of ways to get involved with this beloved coffee chain.
New Dutch Bros location coming soon sign

DBs Franchising History Explained

Dutch Bros (named after the founder's immigrant grandparents) is a privately held coffee chain with a rich history.

It was founded in 1992 by brothers Dane and Travis Boersma in Grants Pass, Oregon. The business started as an espresso machine bought to serve complimentary drinks to friends. 

In the early years of the business, the company operated under a franchise model, with the Boersma brothers partnering with friends and family members to open new drive-through locations across the Pacific Northwest.

In 2008, Dutch Bros shifted to an internal growth model, which meant individuals interested in opening a Dutch Bros location had to be existing employees with at least three years of experience working for the company.

By 2017, the company made the decision to stop offering franchises altogether.

This move allowed the company to ensure that all locations were consistent in branding, customer experience, and quality.

Since then, Dutch Bros has expanded rapidly, opening new spots across the western United States, serving quality caffeinated beverages.

How Much Does a Dutch Bros Franchise Make?

 A Dutch Bros franchise can make anywhere from around $570 – $650K total revenue, depending on the location. 

The average profit for a Dutch Bros store owner at an estimated $124,000 annually.

Factors like labor cost, product waste, employee theft, and higher wait times can all affect total revenue, as well. 

Dutch Bros drive thru location

Previous Financial Requirements & Fees Of Dutch Bros Franchisees

While there are no longer offers Dutch Bros franchise opportunities, it's crucial to thoroughly understand the costs associated with any potential Dutch Bros franchise before investing.

Some franchises may have low initial fees, but additional expenses like payroll, technology, or training fees may arise later.

Take your time to study the costs and consider reaching out to former franchisees for their perspective.

Here are some past requirements of Dutch Bros franchises:

Fees or Expenses

Amount

Liquid capital (liquid cash requirement)

$150,000

Net Worth

$500,000

Total Initial Investment Range

$150,000-$500,000

Franchise Fee

$30,000

According to median sales estimates for Dutch Bros, a 20% profit margin can lead to potential franchisees recouping their investment in approximately 2.75 years, which is shorter compared to other franchise opportunities.

Additionally, along with the franchise fee, Dutch Bros had an ongoing royalty fee of 5% of gross sales or $1,300 per month.

These royalty fees were separate from the initial franchise fee. The corporate office collected it to maintain good standing as a Dutch Bros coffee franchise operator.

Dutch Bros Average Sales, Revenue & Profit Analysis

Although Dutch Bros no longer offers franchising opportunities, its impressive financial performance is worth noting considering a franchise opportunity.

In 2020, despite the challenges posed by the pandemic, the company reported a 7.7% growth in net sales, thanks in part to its drive-thru model.

The company's 328 locations generated an estimated $494 million in system-wide sales, with an average revenue per store of around $1.5 million in gross sales per unit.

In 2020 alone, Dutch Bros opened 53 new outlets, contributing to its continued success.

The brand's performance during the pandemic highlights its ability to adapt to changing market conditions.

That makes it an attractive option for investors seeking opportunities in the coffee industry. Here are some key financial metrics of the Dutch Bros franchise:

  • Revenue was $497.9M in 2021.
  • Peak quarterly revenue was $186.4M in 2022(q2).
  • Revenue growth from 2020 to 2021 was 52.06%.
  • Annual revenue for 2021 was $497.9M, a 52.06% growth from 2020.
  • Dutch Bros Coffee has 16,500 employees, and the revenue per employee ratio is $30,174.
Person holding a drink in front of Dutch Bros Coffee Shop

Dutch Bros SWOT Analysis (What You Need To Know)

Strengths

Dutch Bros Coffee has several strengths that give it a sustainable competitive advantage.[2]

  • Strong brand equity and awareness, high margins, and a strong balance sheet allow Dutch Bros to invest in new projects and diversify its revenue streams.
  • The company also has a first-mover advantage in several segments and strong relationships with suppliers and other supply chain members.
  • It has developed unique solutions in organizational culture and supply chain and can navigate regulations and the domestic market environment.

Weaknesses

Dutch Bros Inc also has weaknesses that limit its ability to build a sustainable competitive advantage due to a lack of resources and capabilities.

  • Lack of critical talent in technology and digital transformation.
  • Organizational culture is dominated by turf wars within various divisions, leading to information silos that can result in missed opportunities.
  • Integration of technology is not yet harnessed in front-end processes.
  • Project management is too internally focused, which can lead to poor public relations and customer backlash.
  • Low return on invested capital in certain areas, such as organizational culture and supply chain.
  •  Their business model can be easily replicated, as intellectual property rights are difficult to implement in this industry.

Opportunities

Dutch Bros can take advantage of various macro-environmental factors, including economic growth, policy changes, technological innovations, consumer preferences, and political developments.

These factors present opportunities for the company to strengthen its market position or expand further. Some of their significant opportunities are:

  • Dutch Bros can tap into international talent and bring it into the domestic market by expanding into international markets. This can also help expand organizational culture and supply chain.
  • They can explore adjacent industries to further market growth and extend current products and services.
  • They can cater to loyal and new customers by diversifying their brands and adding various features based on customer preferences.
  • They can reduce the number of offerings in the market and focus marketing efforts on the most successful products.
  • Machine learning and artificial intelligence can improve efficiencies, lower costs, and transform processes.
  • They can use the trend of increasing disposable income to expand in adjacent areas by building a new business model where customers pay progressively for using its products.

Threats

Threats are external factors that can impact the business model of Dutch Bros.

  • Dutch Bros’ expansion plans in China may be affected by increasing tensions between the US and China.
  • The rising inequality in developed and developing countries may reduce demand for Dutch Bros' products.
  • Dutch Bros should reduce its dependence on debt for expansion to prepare for any potential rollback of easy credit policies.
  • Changes in government regulations, especially related to environmental and labor safety, can impact Dutch Bros operations.
  • Developments like Brexit, foreign exchange crises, and growing protectionism may impact Dutch Bros' international expansion plans.
  • Higher environmental taxes may increase logistics and packaging costs for Dutch Bros in developed markets.
Dutch Bros drinks lined up in a row

Are Dutch Bros Shops Involved In The Community?

Nowadays, it's increasingly common for entrepreneurs to want to positively impact their communities. 

That’s one of the many reasons why I was motivated to look into opening one, myself. 

One of Dutch Bros' core values is giving back to their communities and supporting local organizations.

Dutch Bros is committed to making a difference in the lives of people living with Lou Gehrig's disease.

Since the death of co-founder Dane Boersma due to this condition, Dutch Bros' drive-through locations donate one day's profits from their drinks to the Muscular Dystrophy Association annually.

This is just one example of how the company seeks to support those in need.

Another way the coffee shop gives back is through "Buck for Kids Day." On this special day, proceeds from sales at Dutch Bros locations are gifted to local non-profit organizations that support youth in the community.

By supporting these organizations, Dutch Bros is investing in the future of their communities and helping to make a positive difference in the lives of children and families.


Frequently Asked Dutch Bros Franchise Questions

How much is the Dutch Bros franchise owner's salary?

A Dutch Bros franchise owner salary could have been between $50,000 to $250,000 annually. While it can be profitable, the average income is not high for a franchise owner.

How rich is the owner of Dutch Bros?

The owner of Dutch Bros, Travis Boersma, has an estimated net worth of $2.1 billion. That’s a big accomplishment as the owner of a once small coffee shop chain that started as a coffee cart headquartered in downtown Grants Pass, Oregon.

What makes Dutch Bros successful?

Dutch Bros Coffee is successful due to its high-quality, premium private bean blend with a wide range of customization available. This is all done at affordable prices and with excellent customer service.

Are there any alternative franchises?

For an alternative franchise to Dutch Bros, many other businesses franchise, and you may be interested in The Human Bean. It's a small coffee shop franchise that uses a drive-thru model similar to Dutch Bros.

Are coffee franchises profitable?

A coffee franchise can be profitable depending on location, competition from other chains, cost structure, pricing strategy, marketing, and management. A strong brand reputation, unique offerings, efficient operations, and effective marketing campaigns are essential for success.

Who is Dutch Bros’ target audience?

Dutch Bros caters to a younger demographic by offering various tasty, delicious, unique hot and cold beverages made fresh daily.

Who is Dutch Bros biggest competitor?

Dutch Bros Coffee’s biggest competitors are Starbucks, Scooter’s Coffee, Dunkin Donuts, Caffe Bene, Peet's Coffee, and Caribou Coffee. Many other coffee chains could be considered competitors.

Summary

While its not currently possible to start my own Dutch Bros coffee shop, its not to say it will never be a possibility in the future.

In fact, with their growth and success, I can see them offering franchise opportunities like they did at one point.

Meanwhile, I still love supporting my local Dutch Bros stores by visiting and enjoying their delicious coffee drinks and other beverages.

References:

1. https://www.dutchbros.com/contact-us#question-360014496614
2. https://www.investopedia.com/terms/s/swot.asp

ShayAnne Weeks

Author

ShayAnne Weeks
Shay is a fun-loving content writer and DJ who enjoys traveling the world whenever, wherever possible. The lifeblood that makes it all attainable has always been a strong cup (or 3) of coffee.

My favorite drink? I'd go with... A Café Cubano con Leche

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