Cafe Franchise in Rural Areas

[Marketinggirl03]

Hello,

I'm a 28 yo from the Netherlands. My family owns a small but cute farm without any animals but ideal for a small cafe. However, I have read now a lot that restaurants and cafes are not really a highly profitable market to go into. I have worked in cafe in the past and really enjoyed it though. Do you think there is potential for a franchise concept for a cafe within farms or locations outside the cities?

Cafe Franchise Model: I would target specifically locations on the country side because I believe there are not enough cafes or restaurants. If there are restaurants they often provide the same menu. I could envision a cafe franchise model which provide a location within small villages to go to for good coffee, cake and ice cream (breakfast only if profitable).

I noticed a lot of old farms are not used because maybe they don't know how to start a business there, and cafes within those farms could be really a great opportunity.

What do you think?

 

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[MJ DeMarco]

What do you think?

Interesting idea, and it would have different economics than a cafe in a city with a huge rent payment in some building.

Problem is, how many customers can you serve in the middle of nowhere on a farm?

@MTF would be a customer for this type of thing, maybe he can chime in.

 

[Marketinggirl03]

Interesting idea, and it would have different economics than a cafe in a city with a huge rent payment in some building.

Problem is, how many customers can you serve in the middle of nowhere on a farm?

@MTF would be a customer for this type of thing, maybe he can chime in.

Yes, that's true. I believe this would be the biggest disadvantage and challenge at the same time. The concept would have to be so good, that people around the area would come in. They might not want to go to the big cities because it's too far and too crowded but would be willing to come to a town over.

 

[socaldude]

What do you think?

I've talked to people who own coffee shops and many fail because you have to sell so many cups of coffee or they have a bad location.

You need quality equipment and ingredients which is pricey, a good location and some spin or creative complementary business model that goes with the cafe.

When I lived in Mexico. There was this coffee shop by my apartment. I love coffee so I would go there often. It felt like I was the only customer. It was always empty. Every time I drove past there, the owner was just sitting inside by himself on his laptop. There was no way he was making money. I would talk with the guy but never summoned the courage to ask if he was profitable because I kind of already knew the answer.

 

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[Marketinggirl03]

I've talked to people who own coffee shops and many fail because you have to sell so many cups of coffee or they have a bad location.

You need quality equipment and ingredients which is pricey, a good location and some spin or creative complementary business model that goes with the cafe.

When I lived in Mexico. There was this coffee shop by my apartment. I love coffee so I would go there often. It felt like I was the only customer. It was always empty. Every time I drove past there, the owner was just sitting inside by himself on his laptop. There was no way he was making money. I would talk with the guy but never summoned the courage to ask if he was profitable because I kind of already knew the answer.

Good point with the complementary business model. Do you have something in mind which you have seen before? I am totally with you that selling coffee would be a hard foundation for generating profit.

 

[MTF]

Interesting idea, and it would have different economics than a cafe in a city with a huge rent payment in some building.

Problem is, how many customers can you serve in the middle of nowhere on a farm?

@MTF would be a customer for this type of thing, maybe he can chime in.

I imagine this could work if it were combined with a rural stay in a beautiful natural area with lots of stuff to do. You could have a nice room or a small cottage on the farm, go on a hike, and then come back and chill out at the cafe.

The problem is that the Netherlands doesn't have anything like that (sorry for being blunt, @Marketinggirl03). It's all flat, boring, human-altered terrain that probably won't attract many nature lovers. Maybe it could work near the Veluwe National Park though I doubt it would be interesting enough.

 

[Stargazer]

I would say a quarter of the farms near me have cafes on site. Not because they started cafes as such but because they started farm shops on site and then naturally expanded to adding a cafe if lots of people came to the farm shop.

A cafe in itself is not a great reason to jump in your car and go off to a farm. There is the 'main event' so to speak ie Going to buy produce direct from the farm. Grabbing Tea & Scones is secondary.

Are farm shops a thing in Netherlands?

Dan

 

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[Eurojanek]

@Marketinggirl03 I would advise you not to. You see caffe is a impulse sale product. That means: location where people walk by, see the Cafeterie walk in and buy by impulse. I know margins on caffee are 1000-1500% but in countryside it will not work.
In Poland there is that guy Andrzej Jacek Blikle, he is a mathematics and informatics profesor. Funnily enough he's also a master confectioner, funder and owner of 15 confectioneries in Warsaw, he also franchises his shops. There's that interviev where he talks about it that I would strongly advise you to watch before pulling a trigger on your idea. Unfortunatelly it's in polish with no subtittles. But I'm sure in todays world with apps and AI there's a way around it.
Interviev Andrzej Blikle youtube
He's also an author of the book "A Teal Doctrine of Quality" a different Tale but great read anyways.

 

[NewManRising]

It could work if you turn the farm into a ranch or resort where visitors come to visit for a reason, and the café or restaurant is an add-on. I don't think people will drive out of their way just to visit a café.

Perhaps even add lodging if possible. If you could transform the farm into a resort or ranch of some sort, then these ideas would bring in more visitors and money. I'd say, focus on a reason to bring people there and add the café once you know you'll have visitors.

I've visited ranches/homes/farms that sold gems/stones, plants, art, jewelry, had animals to show off, or it was just a beautiful natural landscape to come and see, etc. If there is a compelling reason for people to drive out there, then you can sell gifts or food/drinks at a café. You just got to give people a good enough reason to visit.

 

[AnNvr]

I have been in coffee for almost a decade, from brewing to roasting, sales, till doing back-end B2B and B2C.

I'd say analyze your target audience and the national market demand before pulling any trigger, because you want to make sure you have value proposition for the right audience otherwise no sales, no money, no franchise.

Can you franchise a coffee shop?

I.e. : here in Australia you can franchise your coffee shops, especially regional. Gloria Jeans and The Coffee Club are two examples and they outweigh Starbucks stores. They serve what Australians like to consume and offer a consistent line base that for the people is good enough to pay for it.
Question - What does the coffee customer base in the Netherlands consume? What to they look for?

Would that work in remote areas?

I.e. : The mentioned above are dominant in regional areas because are low serviced areas, the competition is close to nothing and more people are relocating to regional. Likewise for independent businesses. A little coffee shed in Bundaberg, a small town in regional Queensland. 6 months after opening they were grinding 100Kg per week. Yes, there are other estabilished cafe in the area and no, they don't make a dime.
Question - Is it the same in the Netherlands?

I see coffee shops shutting down in less than 3 yrs and a few printing tons of money. The latter built a brand and a target audience. Probably as any other business, I think.

Wish you the best for everything you'll be trying to achieve

 

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[Devilery]

I have a real-life example of a cafe opening in a rural place. A few years ago, a couple from a bigger city came to my hometown with a population of no more than 2000 people. 20 minutes away there's a town with maybe 3000 people (which has a few cafes), 40 minutes away with about 25,000 (but it has dozens of cafes and restaurants, from fast food to high-end).

They bought a literal shack that I'd imagine needs to be torn down, but it was good enough to operate from in the summer (inhabitable in winter), and they had plenty of customers from day one as there was only 1 more cafe in the town but this was new, by the river, outdoor seating, etc.

Over summer they had people coming from cities that are an hour or two away, always packed. Every tourist, everyone passing by came here. They also have an amazing location, it's right across the bridge that enters the town.

Now they recently bought a part of an old pub if that's what it's called - it's a massive building with lots of history and heritage. They now had a legit inside restaurant space, clean interior, etc. It's always packed at the end of the week, year-round, plus they offer catering for events.

Will they ever be millionaires? Probably not but they do have a very successful cafe/restaurant in a town with a population of 2000.

 

[Panos Daras]

I imagine this could work if it were combined with a rural stay in a beautiful natural area with lots of stuff to do. You could have a nice room or a small cottage on the farm, go on a hike, and then come back and chill out at the cafe.

The problem is that the Netherlands doesn't have anything like that (sorry for being blunt, @Marketinggirl03). It's all flat, boring, human-altered terrain that probably won't attract many nature lovers. Maybe it could work near the Veluwe National Park though I doubt it would be interesting enough.

So untrue man what a miss. So many people here are active and sportive going on hikes no matter the weather and the flat terrain. Also many Van Gogh paintings depict Dutch landscapes.

I think it is a good idea. I think something like a Cafe + animals + kids toys + indoor cafe+ parking spots. In the Netherlands also good customer service is an easy value skew. But it greatly depends on how big the village is and how accessible the farm is by bicycle and car.

 

[Antifragile]

Hello,

I'm a 28 yo from the Netherlands. My family owns a small but cute farm without any animals but ideal for a small cafe. However, I have read now a lot that restaurants and cafes are not really a highly profitable market to go into. I have worked in cafe in the past and really enjoyed it though. Do you think there is potential for a franchise concept for a cafe within farms or locations outside the cities?

Short answer, no.

Cafe Franchise Model: I would target specifically locations on the country side because I believe there are not enough cafes or restaurants. If there are restaurants they often provide the same menu. I could envision a cafe franchise model which provide a location within small villages to go to for good coffee, cake and ice cream (breakfast only if profitable).

You need traffic for this to work. And by definition, you've removed traffic by going into a country side ... where there are few people.

I noticed a lot of old farms are not used because maybe they don't know how to start a business there, and cafes within those farms could be really a great opportunity.

What do you think?

I think:

1. "maybe they don't know how to start a business there" is a smug statement. Never assume that a business doesn't exist because "they" don't know how to start it. You too don't yet seem to know much about business, let alone creating a franchise.
2. Retail is not some mysterious cat that never existed anywhere - retail is about people, a lot of people to make it work. Rural areas with low income and few people = hence no cafe's that you saw. If there was a huge demand for it, there would have been plenty of cafes.
3. It's a simple math problem for you. Start by doing the math:
   • Location and Lease: The cost of renting or purchasing a suitable space for your coffee shop will depend on factors like location, size, and local real estate market conditions. To be clear, just because your family owns the property, doesn't mean you should treat it as "$nil rent". Use market.
   • Equipment: Essential equipment like espresso machines, grinders, brewers, and refrigeration units can cost anywhere from $10,000 to $50,000.
   • Inventory: You'll need a well-stocked inventory of coffee beans, syrups, milk, tea, pastries, and other consumables. The cost of these items will vary based on your menu and customer preferences.
   • Staffing: The cost of hiring and training your team, including baristas, managers, and support staff, will be a significant ongoing expense.
   • Licenses and Permits: Depending on your location, you may need to obtain various licenses and permits to operate your coffee shop legally.
   • Marketing and Advertising: Promoting your new coffee shop through various channels like social media, local events, and traditional advertising can help attract customers.
   • Insurance: It's wise to invest in business insurance to protect your coffee shop against unexpected events.
   • Utilities and Operational Expenses: Ongoing costs like rent, utilities, insurance premiums, and maintenance expenses should be considered.
   • Professional Services: You may need to hire professionals like accountants, lawyers, or consultants to help with various aspects of your business.

What are your costs? Now, what kind of revenue would you need to cover those costs? How many customers, at what prices, buying what kind of coffee and food?

Once you do the math, come back and tell us - what do YOU think?

What do you think?

 

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[RicardoGrande]

Hello,

I'm a 28 yo from the Netherlands. My family owns a small but cute farm without any animals but ideal for a small cafe. However, I have read now a lot that restaurants and cafes are not really a highly profitable market to go into. I have worked in cafe in the past and really enjoyed it though. Do you think there is potential for a franchise concept for a cafe within farms or locations outside the cities?

Cafe Franchise Model: I would target specifically locations on the country side because I believe there are not enough cafes or restaurants. If there are restaurants they often provide the same menu. I could envision a cafe franchise model which provide a location within small villages to go to for good coffee, cake and ice cream (breakfast only if profitable).

I noticed a lot of old farms are not used because maybe they don't know how to start a business there, and cafes within those farms could be really a great opportunity.

What do you think?

If Hunt Brothers can do it in the U.S. in towns with less than 300 occupants, you can definitely work something out in NL.
Maybe you can event copy their "Rent out equipment and sell them the inventory" business model?

NOTABLE! - IDEA - Surprisingly simple stupid businesses- that somehow work

Like any good TFF member, I spend any possible downtime listening to talks with founders. I like hearing about people getting off the ground and getting started, and how quickly (or not) they were able to take off. A big, painful recurring theme is that there seem to be a lot of what I call...

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[G-Man]

I live in a town of 2,500 and the coffee shop on the town square is pretty generally slammed. He seems to make most of his money on sweets - ice cream and outrageous cookies. The product is legitimately good, and it's a "family destination", i.e, it's the designated after baseball/football/whatever else stop for families with kids. If your pool of potential customers is small (because geography) you need to get the same small group of people in the door over and over, and family is the best way to do that, at least in rural TX.

*I have no idea if they're actually making money*, just that they're surprisingly busy.

Again, the product is actually good. I would do horrible horrible things to get one of them cookies, but I'm past the age where I can throw down 1,200 calories of pure sugar in a single sitting.

 

[pmusu]

NL is full of road bikers, maybe a customer segment that can reach a farm with relative ease. Is there any service you can provide to them? Any reason why they should stop at your place during or after their ride?

 

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[MichelleWood]

Cafes on rural properties in Australia are very common. When I say rural, I mean outside of the town itself, not in the main street. Some are so popular they become a destination in themselves, as in people make a booking and take a day trip to the location. An example is Caldermeade Farm and Cafe. It started as a dairy farm, now they do milking tours and have a cafe. They're located on a main highway and hour or so along the way to a famous attraction (Penguin Parade). So it's a welcome respite to those making the longish journey to/from the region. Location critical, needs to be 'convenient' perhaps on the way to another? Even if the farm didn't have animals, a 'theme' or 'item' would help attract people.

Whilst the cafes in towns might be franchises, those on rural properties are not. I have visited many, personally I love that they are all different, they have personality of the owner imprinted all over. Don't get me wrong, I am a huge fan of Gloria Jeans (Australia's answer to Starbucks) I love the consistency with the coffee quality. However if I'm out in the country - I would chose an off-the-beaten-track, character-filled, local produce cafe every time.

Maybe re-frame to a hybrid-franchise model? For example; a consultancy firm that helps people set up cafes of regional farms/properties. You could help the potential owners with choosing theme appropriate to location (that way it doesn't feel cookie cutter). You could do deals with national suppliers for the big stuff coffee machines, refrigeration units, display cabinets etc and sell the 'set up' as a package - with upgrade or leasing deal so they've always got new equipment (which your company gets commission on?). You could take care of marketing on an ongoing basis - busy cafe owners don't have time for that.

Just spit ballin' here.