Real Estate For Investors: Starbucks Builds Customized Stores

Feb 6, 2014

Most chain restaurants aren’t known for their architectural originality. Like clones of each other, they populate the commercial landscape with building after building of the same colors and dimensions.

Part of the phenomenon is due to branding. Having restaurants that look the same helps customers associate the business’ its image with its products. Cost is also a factor. Making each building the same is faster and less prone to unforeseen zoning problems.

Despite the obvious advantages of having each franchise location look the same, one chain restaurant, Starbucks, has decided to go against the grain and design locations that are entirely unique to their locale.

The goal is to get customers to associate the uniqueness of a franchise’s appearance with the originality of its products. Heading into 2014, Starbucks has designed a total of eleven unique franchise locations, with many more planned for the future.


As one would expect, Starbucks’ decision to depart from traditional franchise restaurant design doesn’t stem from a love of unique aesthetics. Based on a series of recent customer surveys, Starbucks executives discovered that people were beginning to associate the coffee house with “fast food” restaurants. With McDonalds currently challenging Starbucks in the coffee drinks market, there couldn’t be a worse time for Starbucks to be associated with the golden arches.

In terms of investment real estate, Starbucks has been one of the biggest success stories of the past 15 years. Headlining the list of the best real estate for investors several years in a row, Starbucks properties have capitalized on many features that make fast food chains so profitable: unique food that’s available in minutes, the option of driving through instead of dining in, and a menu of relatively low-priced products that are affordable on almost any budget.

However, by portraying Starbucks as a player in the fast food market, these benefits have worked a bit of reverse magic. While an inclusion in the fast food category would never sink the coffee chain, it could indeed spell lower capitalization rates for Starbucks franchises, as fast food chains interlope on its market.

If you are considering making a property investment in a Starbucks franchise, it may be worthwhile to target one of the uniquely designed locations.


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