Frequently Asked Questions for Franchising

• How did SPR Coffee get its start?
  2、What is SPR Coffee's style?
  3、How is SPR Coffee different from other coffee chains?
  4、How does SPR Coffee's development model differ from those of other coffee chains?
  5、What is SPR Coffee's intelligent coffee operating system? What items are included at different franchising fee levels?
  6、What are the advantages of the SPR Coffee chain in view of its long franchising history?
  7、Where can SPR coffee shop locations be found?
  8、What is the most appropriate size for a SPR coffee shop?
  9、How much time is needed from initial discussions to store opening?
  10、What is the term of an SPR Coffee franchise contract?
  11、How should franchise stores employees be hired?
  12、How many employees does a coffee shop usually need?
  13、How is coffee shop personnel training handled?
  14、Can a new SPR coffee shop expect to be immediately profitable?
  15、How to decide what products to sell in a coffee shop?
  16、How should product prices be set?
  17、How are coffee shop products and materials purchased?
  18、Can some of the equipment in the SPR Coffee operating system be adjusted?
  19、Are products purchased from headquarters more expensive than those on the open market?
  20、What follow-up services does headquarters provide to operating franchise stores?
• 

• 1、How did SPR Coffee get its start?
  SPR Coffee is the SPR Group's coffee business system China founded by the SPR Holding Company. After developing coffee-related products in Illinois and other places during the 1980s, SPR engaged coffee specialists to develop the SPR Coffee intelligent coffee shop and coffee bar operating system after investigating the global coffee market. SPR established its flagship coffee shop in the beautiful port city of Qingdao, China in 2001. SPR also established its franchise chain management and operating system at this time; this system includes the elements of engineering and design, education and training, purchasing and logistics, product R&D, customer development, planning, and publicity (Please see the History of SPR Coffee on page 4 for further information).

• 2、What is SPR Coffee's style?
  SPR Coffee has a nostalgic style combining espresso with jazz, and strives to transform simple coffee products into a boundlessly creative vision of life. SPR Coffee seeks to create a romantic atmosphere of family warmth, friendly hospitality, and shared happiness. SPR Coffee changes purely commercial spaces into little corners of paradise. Because they want to make sure that every penny from our franchisees is spent where it will do the most good, our design team avoids waste and ostentation, and gives coffee shops an elegance that is timeless and gets better the more you look at it. Our design personnel have consequently put extreme effort into such aspects as store appearance, light boxes and lamps, bar operations, decorations and atmosphere, walls and paintings, menus and counters, floors and hung ceilings, tables and chairs, product displays, stairs, and toilets. Furthermore we have adopted a semi-self-serve business model in order to provide even better service to customers and stand out from ordinary coffee shops, and we use high-pressure extraction to give customers the most fragrant, aromatic coffee.

  3、How is SPR Coffee different from other coffee chains?
  Although Starbucks currently dominates the American-style espresso coffee shop market, it does not use a franchising business model. Instead, syndicates must apply directly to Starbucks' American headquarters for regional agency rights, and must open direct-selling stores within the region. Starbucks does not permit individual franchise stores. As a consequence, many people who would like to run this kind of coffee shop have no way to join the Starbucks chain system. Starbucks' US headquarters currently wants all of its coffee shops in China to be direct-selling stores. Most other coffee shop chains offer Asian- or European-style coffee brands, including some local brands. Although these coffee shops sell coffee alone, as well as all kinds of beverages, in fact they are primarily restaurants serving steak or simple meals. As mentioned above, SPR Coffee has a nostalgic style combining espresso with jazz. It is a typical, authentic, specialized coffee shop.
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  4、How does SPR Coffee's development model differ from those of other coffee chains?
  Different coffee chains have employed a number of different development models. As far as geographical direction of development is concerned, some coffee chains first established footholds in primary cities, and then moved into secondary and tertiary cities. On the other hand, some chains developed first in secondary and tertiary cities, and only later moved into primary cities. But regardless of the direction, these stores tend to have the same characteristics, namely large territories, large amounts of investment—often exceeding ¥1 million—very high personnel costs, and difficult management. Many chains of this type entered China at an early date, but nowadays their stores are rather hard to find. But thanks to SPR Coffee's taste and atmosphere, the stores can attract customers in markets of any size. As a result, the chain is thriving throughout China after only a few short years.

  5、What is SPR Coffee's intelligent coffee operating system? What items are included at different franchising fee levels?
  SPR Coffee's intelligent coffee operating system is the core of its coffee shops. This system includes a coffee bar working area, an ordering area, a cake and pastry area, a display area, a menu area, various equipment areas, an ice-making area, a washing area, and a storage area. Moreover, this coffee operating system can be taken apart and reassembled in order to meet the specific needs of different environments. Stores also include customer seating areas containing tables and chairs, plus atmospheric furnishings such as murals, a mantelpiece, lamps, light boxes, floor tiles, and special color combinations; these elements shape a coffee shop's overall appearance. Different levels of franchising fees basically correspond to different coffee bar dimensions and different equipment, and naturally include different operating facilities. (see the explanation of university-type, intelligent-type, and exclusive-type on page 32)

  6、What are the advantages of the SPR Coffee chain in view of its long franchising history?
  Advantages include strong support from headquarters; emphasis on trust and commitment; a good reputation, a low threshold, low investment needs, and low risk; fast store opening, a comprehensive training system; even inexperienced proprietors can easily open stores; quickest store opening cycle; most efficient store opening service; superior products and equipment give professional coffee shop appeal; a fashion trend leader; induces an extremely high second look rate, vigorous follow-up support; and a comprehensive training system. Even more importantly, in order to give even more coffee lovers an opportunity to own their own coffee shop, we have introduced the special "three waived fee" plan, namely no management fees, no security fee, and no training fee. This plan greatly reduces franchisees' investment needs and operating risk.

  7、Where can SPR coffee shop locations be found?
  We encourage franchisees to find and arrange suitable store locations, and we recognize that proprietors have the best knowledge of the local business environment and potential store sites. Of course our headquarters also assesses proposals and gives recommendations. Back to Top
  
  8、What is the most appropriate size for a SPR coffee shop?
  An SPR coffee shop can be located in a space as small as nine square meters. Of course there is no room for tables, chairs, or other facilities in such a tiny store, which must therefore focus on take-out traffic and cannot keep customers in the store for very long. There will be sufficient room for tables and chairs when the store area exceeds 50 square meters, and a unique indoor coffee shop atmosphere can be created. When the store area exceeds 100 square meters, the proprietor can add more distinctive dishes and broaden sources of income.

  9、How much time is needed from initial discussions to store opening?
  Once you have decided to open an SPR coffee shop and signed a franchise contract, the amount of time needed to open the store will depend on the specific details of the store. If you have finalized your plans for the store, and can quickly provide us with relevant drawings, we can send supplies to the store as soon as furnishing and license-application tasks have proceeded sufficiently far along. A franchise store can normally be opened in roughly one month.

  10、What is the term of an SPR Coffee franchise contract?
  In accordance with our regulations, we always sign five-year contracts with franchisees. Extension procedures can be performed when a contract expires.

  11、How should franchise stores employees be hired?
  In order to lessen costs and facilitate store management, we encourage franchisees to perform local recruiting on their own initiative. Our headquarters will bear responsibility for training. We can provide relevant management forms to franchisees, which will help them to recruit appropriate employees within a short period of time.

  12、How many employees does a coffee shop usually need?
  The number of employees will depend on the store's area, business items, and operating hours. For instance, an intelligent coffee shop with an area of 60 square meters that is open from eight o'clock in the morning until 11 o'clock in the evening will need two to three employees and one manager. A store that is open from seven o'clock in the morning until one o'clock the following morning, and serves coffee, pastries, meal packages, salads, sandwiches, and cakes, will need five to seven employees and one manager. Additional kitchen staff will be needed if a coffee shop has a kitchen. But no matter what your situation, headquarters will provide reasonable staffing recommendations when you get your franchise. Back to Top
  
  13、How is coffee shop personnel training handled?
  The franchisee should provide a list of personnel to SPR Coffee headquarters before the store opens. We will arrange an appropriate time and ask personnel from various franchise stores to come to a training location specified by our headquarters for training. The content of training includes professional knowledge, management tasks, practical working methods, and other items.

  14、Can a new SPR coffee shop expect to be immediately profitable?
  The profitability of a coffee shop depends on such factors as choice of store location, the proprietor's business skills and attentiveness, and degree of employee concern for the store. We hope that all franchise stores will be profitable. In order to ensure profitability, headquarters will send advisory personnel to franchise stores that are preparing to open; these personnel will assist with store management, sales promotions and publicity, service attitude, and product methods.

  15、How to decide what products to sell in a coffee shop?
  SPR Coffee headquarters provides different types of menus to franchise stores so that they can make a selection. But of course different menus are suitable for different types of coffee shops. Headquarters also encourages franchise stores in different geographical locations to increase their sales opportunities by adding distinctive local products or products suited to local tastes. We ask, however, that products be reported to us and receive approval from headquarters before they may be sold; this is done to ensure that SPR Coffee stores retain their characteristic style throughout the country. Back to Top
  
  16、How should product prices be set?
  Products that are the same throughout the country are sold at the fixed prices set by headquarters. But if a store is located in an area where people have different purchasing ability, it can use product combinations or sales promotion methods to adjust effective prices. Franchisees should price locally-oriented products on the basis of local consumer habits, and should obtain approval from headquarters before selling the products.

  17、How are coffee shop products and materials purchased?
  Depending on their type, products and materials may be either purchased from headquarters or purchased by the store on its own. Products and materials bearing SPR trademark or specifically provided by headquarters must be purchased from headquarters in order to ensure consistency nationwide. These products and materials include such expendable as coffee beans and paper cups. Franchise stores should purchase these items by placing monthly orders with headquarters; headquarters will immediately ship the items to individual stores. In the case of goods with short shelf lives that can be easily obtained locally, such as fresh vegetables, milk, and bread, etc., headquarters will help franchise stores to find acceptable local suppliers, so that the stores can obtain these supplies locally.

  18、Can some of the equipment in the SPR Coffee operating system be adjusted?
  The SPR Coffee operating system embodies the bulk of SPR's coffee shop know-how. Since the content of this system was established on the basis of knowledge accumulated over many years of practical work, it cannot be condensed or adjusted.

  19、Are products purchased from headquarters more expensive than those on the open market?
  Headquarters promises franchise stores that the prices of the products it provides will always be less than those of products of the same grade or brand on the market. Because headquarters obtains products from suppliers in large quantities, it naturally can obtain low prices, and it hopes to give franchise stores more room for profitability by passing on these low prices.

  20、What follow-up services does headquarters provide to operating franchise stores?
  As a franchisee, you will never feel alone and unaided after you have joined the SPR Coffee family. Our headquarters provides a series of follow-up service measures: Apart from regular consulting services, we also provide occasional store service visits, the franchise store return home plan (involving regular refresher training), notification of newly-develop products, mobile classroom training, sales promotion activity design notification, and special application services. This all-inclusive service system enables franchise stores to focus on their business without additional worries.     Back to Top Back to Top