Scooter's Coffee

The $40,000 franchise fee is flat across all store types — a refreshingly simple structure. But Scooter's adds a mandatory $20,000 Initial Opening Support Fee due at signing of the franchise agreement, effectively making your day-one payment $60,000. Veterans don't get a fee discount; instead they receive a $20,000 product credit from Scooter's affiliate supply chain — useful but not equivalent to cash savings.

The buildout range varies significantly by format. Kiosk stores (the primary model) run $955,000-$1,523,000 all-in. End cap stores (inside an existing building) run $692,000-$1,054,000. The kiosk's high end reflects a full drive-through structure with significant site work ($639,000-$974,000 in site and building improvements) plus equipment, fixtures, and POS.

Equipment, fixtures and furniture alone run $132,000-$195,000 for kiosks, covering the specialized coffee equipment (espresso machines, grinders, refrigerators, ice makers). You're purchasing this from Scooter's affiliate supply chain — there's a vertical integration element to this franchise.

Ongoing: 6% royalty on net sales, 2% to the national advertising fund (currently), and $350/month technology fee. That technology fee looks modest until you read the 15% annual compounding increase clause. At 15% compounding: year 2 = $402/month, year 3 = $463/month, year 5 = $612/month, year 10 = $1,416/month. There's no stated cap on absolute dollar amount. The combined advertising maximum (national + local + regional) is 6% of net sales — relatively tight for a QSR-adjacent concept.

For multi-unit development agreements, you pay $20,000 per store (after the first) as a development fee. This is applied toward each store's franchise fee when you open, so it's an interest-free deposit rather than an additional cost — but it does tie up capital.

Scooter's Coffee provides robust Item 19 data covering 605 kiosk stores and 51 end cap stores that operated a full year in 2024.

Kiosk stores averaged $914,719 in gross sales in 2024, with a median of $880,794. The range is wide: $240,038 at the bottom to $2,130,325 at the top. End cap stores slightly outperformed: average $991,552, median $998,022.

The five-year growth trajectory in the data is compelling: kiosk average gross sales grew from $637,104 (2020) to $914,719 (2024) — 43% growth over four years. That's meaningful same-store growth, not just new-unit dilution.

At the kiosk average of $914,719: royalty (6%) = $54,883, ad fund (2%) = $18,294, tech fees ($350/month, growing) = ~$4,200 in year one. Combined brand obligations = ~$77,377, or about 8.5% of gross revenue.

Scooter's doesn't disclose profit margins in Item 19. A coffee kiosk's major cost drivers are food and beverage costs (typically 28-35% of revenue for specialty coffee), labor (25-35%), and rent/occupancy. At $914K in revenue with a 30% food cost and 30% labor, you have roughly $367,000 in gross contribution before occupancy, brand fees, and other operating expenses.

Scooter's Coffee grew from 555 total units in 2022 to 849 in 2024 — net growth of 294 units in three years, or roughly 98 net new locations per year. 242 franchise agreements are signed but not yet opened as of end-2024, providing a visible pipeline.

The 2024 data introduced a new element: 20 franchised closures — the first significant closure activity in the three-year window. Prior years showed 0 closures in 2022 and 2 in 2023. The jump to 20 warrants investigation. These could reflect site-specific failures, oversaturation in certain markets, or operators who expanded too quickly on multi-unit agreements and couldn't sustain the capital requirements.

Scooter's operates primarily in the Midwest and South, with the kiosk model clustered around suburban drive-through-accessible locations. Its geographic concentration means brand performance is highly tied to regional economic conditions — something Starbucks and Dunkin', with their coastal diversity, don't face to the same degree.

The technology fee compound growth clause is the most underappreciated risk in this FDD. At 15% annual compounding, a $350/month fee becomes $1,416/month over ten years. Over the full term of a ten-year agreement, you could pay $100,000+ in cumulative technology fees — before they increase further at renewal.

The site and building improvements range ($639,000-$974,000 for a kiosk) is heavily dependent on real estate. Drive-through kiosks require outparcel or pad sites, and competition from Starbucks, Dutch Bros., and other drive-through coffee chains for those same sites creates both real estate cost pressure and direct competitive exposure.

The 20 closures in 2024 deserve direct investigation. Request the Item 20 disclosure that lists all franchisees who left the system and contact them. Understanding why locations closed is essential due diligence that the FDD numbers alone don't tell you.

The maximum advertising cap of 6% of net sales across all levels is actually a ceiling, not a floor. If Scooter's raises the national fund from 2% to 4% (which the FDD permits with 60 days notice), plus local and regional requirements, you could hit 6% obligation quickly — squeezing profitability without violating any contract terms.