Coffee Shop within a college

[sunshine8]

I'm really hoping someone may be able to give me some advice..I have a coffee shop with has gained a good reputation since I opened 3 years ago, the local college has apprached me with a view to opening up a coffee shop for them, they say they would rather approach a local independent shop that go with the big chains, however I am unsure of the legalities, pros and cons, and how this would normally be set up? Any information would be much appreciated

[Count-A-Strong]

Almost impossible to say as the college will have their own contract with it's own clauses tailored to how and when they want you to trade. Sounds like an opportunity not to be missed to me, as long as the deal is right. Let us know the details and come back to us.

[Maydup]

Go in with an open mind, but barter hard as they'll want a fair chunk of your profits or some sort of rent. Also be sure that you're happy with the market place. Traditionally students don't have too much spare cash and will only frequent a place if its cheap. Can you deliver cheap and cheerful? If not it could be fairly quiet as there are unlikley to be many other customers.

Check out the student union bar or cafe too, if there is one. Can you compete with it?

If you'e still interested, then negociate hard and make sure you know whats included in the deal and what's not, then sign up for as long or as short as you think fit.

Good luck!

[bimbo123456]

Just make sure you have plenty of Red Bull and Coke in stock !!

[sue11]

There are a few things that you need to consider very carefully. Firstly how big is the college? Unless it is sizeable, you will probably never get enough customers in to cover your overheads. You can get a good idea by checking out the colleges own cafe/restaurant to see how much custom they pull in (although this is not a sure fire way of telling if a competing business will be succesful or not).
The college will probably either charge you a rent or a portion of the profits. If your turnover is going to be lowish, it may be better to go for the portion of profits rather than a set rent regardless of your turnover.
Or they could go for a combination of both. As they have approached you to open up in the college, you are in quite a strong position, I would try to negotiate a rent free period and try to get a stepped rent/portion charge increasing, say over the first 3 years,
Although it is great that the college have approached you, I would ask myself why? If things were that good, why do they want to share profits with another business instead of keeping all the custom for themselves? I would ask them that question directly.
Another thing to consider is to try to get a no competition clause into the lease, that will stop any other competing business opening up in the college and taking all your hard won customers away. I can tell you that as an owner of a national franchisee sandwhich chain, if I saw that a competing business was doing well and I had the chance to open up and take their trade, I would go for it!
Best of luck, I hope if you decide to go ahead, it goes well for you, but do as much research as you possibly can before going ahead.
Sue

[sue11]

Sorry sunshine8, I meant to say either a set rent or portion of turnover, not profits! Also when negotiating a stepped rent, we nornally reduce the requiired rent, ie if it was 30K, we would suggest 28k for the first year, 29k the second and 30k the third. But you can nornally only do this if you are in a strong position as the favoured tenant.
Thanks
Sue

[DTCwordfan]

sue has covered most things

also understand what are the dynamics and business in vacation time....do they take in summer students etc

care on the liability clauses too..... plus food regulations etc (and their storage/hygiene obligations)

foreign students re dietary offerings etc as this can be a major hinderance if you have to register halal etc.

advertising and promotional rights for you?

rent, yes, go for rent free on the base fee for say two or three years and try and keep the percentages low as well - almost set a sliding scale upwards so the more successful you are the higher their reward as the principle.

clearly, clearly understand what your fixed costs are and where the breakeven is - inc loan/lawyer/set up charges as no doubt you may have to invest some dosh......

And what do the numbers look like if business is 25% off..........correspondingly its worth modelling +20% as you may have to hire extra staff and all the rest.

[Maydup]

I think the portion of turnover is preferable if you can get it as it encourages the college to support you and to contribute to some marketing and promotion.

[AlBags]

I think you'll get a good deal.
Red Bull and Coke? lol .. and condoms!

[cassa333]

Don't forget to factor in start up costs.

Have they a working kitchen in the area they are assigning for the outlet? Is there any facilities you can use? If not how much will it cost to get them etc

[Old_Geezer]

Surely Coke is such a yesteryear drug?