It’s easy to see why an entrepreneur would want to open a Dutch Bros location: The chain has gone from pioneering the drive-thru coffee concept in 1990s Oregon to operating more than 1,000 locations in 25 states (and counting). While Dutch Bros started as a rapidly scaling franchise, the chain’s current ownership model is a little more complicated. Learn about Dutch Bros franchise costs, the chain’s current ownership model, and additional franchising ideas in our guide.
Is Dutch Bros a Franchise? Understanding the Ownership Model
Dutch Bros Coffee’s current ownership model allows only people from within the chain to become operators—often after many years of managerial experience at the company. This allows the company to manage its culture, brand, and service standards more closely.
Did You Know?
While Dutch Bros Coffee began franchising in 1999, the chain switched to a company-owned model in 2017, which meant individual entrepreneurs could no longer purchase and operate a location.
For external Dutch Bros franchise partners who purchased locations before 2017, the company allowed them to follow preordained development agreements and open additional shops within their “territory” over a set period. Today, though, most new Dutch Bros developments are directly managed by the company.
Can You Open or Buy a Dutch Bros Location? What’s Actually Possible?
The most feasible approach to opening your own Dutch Bros location would be to work your way up from within the company. For example, you could get hired as a “Broista,” eventually become a shift leader, then work your way up the corporate ladder while expressing interest in becoming an operator (essentially a regional manager). This is the primary way Dutch Bros opens new locations.
It is still possible for a “legacy” franchise partner to open new Dutch Bros locations within their assigned region, but this depends on the specific development deal that was signed before Dutch Bros changed its ownership model. This method is only viable for existing, long-term franchise partners.
Alternatives to a Dutch Bros-Style Coffee Franchise
While it’s possible to operate a Dutch Bros location, the path isn’t realistic for everyone. If your dream is to operate your own coffee shop with built-in branding, marketing, and training support, you may instead consider franchising a:
- PJ’s Coffee, a rapidly expanding small-to-medium drive-thru/cafe coffee chain
- Biggby Coffee, a medium drive-thru/cafe coffee chain with similar types of drinks
- Scooter’s Coffee, a medium-to-large drive-thru coffee chain of similar size and scale
How Much Does a Dutch Bros-Style Franchise Typically Cost?
While several different factors impact the total cost of a Dutch Bros-style franchise, you can generally expect to invest the following, according to NerdWallet:
- A total of $168,900–$638,000 to operate a PJ’s Coffee, including a weekly royalty fee and a $35,000 franchise fee
- A total of $186,850–$369,100 to operate a Biggby Coffee, including an ongoing 6% royalty fee, a 3% ad royalty fee, and a $15,000 franchise fee
- A total of $331,000–$638,000 to operate a Scooter’s Coffee, including an ongoing 6% royalty fee, a 2% ad royalty fee, and a $40,000 franchise fee
According to the last SEC filing Dutch Bros Coffee made before changing its ownership model, the cost to franchise a Dutch Bros location was broken down as follows:
- A franchise fee of $30,000–$50,000, depending on whether it was a first or second regional location
- A 5% ongoing royalty fee based on gross sales
- A 1% ad royalty fee based on gross sales
These numbers indicate that the above alternatives may deliver a franchising experience similar to that of Dutch Bros Coffee without requiring you to be an internal employee.
