FRANCHISE·WATCH·DESK

Verified — real FDD extraction

SBA-eligible · directory code S4313 since 2019

CARIBOU COFFEE

Food & Dining · independent · est. —

Caribou Coffee is a coffeehouse chain serving espresso drinks, brewed coffee, and baked goods. Franchisees operate locations ranging from kiosks and non-traditional venues to full cafes with drive-thrus.

CARIBOU COFFEE net unit count grew +2.9% from 20232025 per its FDD Item 20.

New to franchising? Start here

A franchise is a business where you (the franchisee) pay a company (the franchisor) for the right to open and run a location using their brand and system — think a local Anytime Fitness or Taco John's owned by a small-business owner, not the corporation.

Before you can buy in, U.S. law requires the franchisor to give you a Franchise Disclosure Document (FDD) — a long legal filing covering its fees, finances, and history. The numbers on this page come straight from that document:

  • Franchise fee — the one-time cost to buy in.
  • Royalty — the ongoing cut of your sales you pay the franchisor.
  • Item 20 — how many locations opened and closed, the basis for our verdict (from Proven & strong down to Distressed — or Too new to judge).

The verdict

Proven & steady

Distress

0
STABLE

A real track record with an unremarkable region of the ledger: neither the growth nor the exits stand out, for better or worse. The standout in the record: owner turnover is low.

Exit rate · latest year

6.6%

vs 8.6% across 137 food & dining systems

Cost to open

$281K–$1.5M

Item 7 total investment range

SBA loan defaults

Too few resolved

2 loans exist; too few resolved to rate

Behind the verdict

the record, factor by factor · Item 20

hi-1.0.0
Net unit growth35%

3-yr trend · Item 20 Table 1

Fair
Exit quality25%

terminations + ceased-ops vs. all exits · Table 3

Fair
Transfer / churn15%

transfers vs. base · Table 3

Strong
Promise-keeping10%

actual vs. projected openings · Table 5

Weak
Transparency15%

Item 19 disclosure + completeness

Strong

Systemwide units

2023–2025

+2.9%
480202348720244942025

Survival record

FDD Item 20 · outlet status by year

In fiscal 2025, 10 of 152 franchised outlets left the system — a 6.6% annualized exit rate, vs 8.6% across 137 food & dining systems. Not every exit is a failure — but this is the measurable floor.

Show the outlet tables
Status (FTC)202320242025
Outlets at start484480487
Opened12142
Transfers180
Terminations034
Non-renewals316
Reacquired by franchisor000
Ceased — other reasons750
Outlets at end480487494
Net change-4+7+7

The lender's view

SBA 7(a)/504 loan performance · FY1991–present

Banks have made 2 SBA-backed loans to CARIBOU COFFEE franchisees since 2016. Most are still open, so there is not yet a resolved cohort large enough to rate.

Charge-off rate

0 resolved · too thin to rate

Loss given default

avg. charged-off $ ÷ approved $

Expected loss

default rate × loss severity

Avg. loan · FY2020+

$1,654,000

what recent franchisees borrowed

Median time to default

approval → charge-off, defaulted loans

Lenders · FY21+ vs FY16–20

distinct banks lending

Charge-off rate by loan approval year (%)

SOURCE: SBA 7(a)/504 FOIA LOAN DATA (DATA.SBA.GOV), FY1991–PRESENT · MATCHED TO CARIBOU COFFEE BY FRANCHISE NAME · RESOLVED = CHARGED-OFF + PAID-IN-FULL

What it costs — and what it drags

FDD Items 5–7 · fees, investment, royalty

Buying in means a $30K franchise fee (Item 5) and a total investment of $281K–$1.5M (Item 7). The franchisor publishes an earnings claim (Item 19) — read its methodology closely.

To open (Item 7)

$281K–$1.5M

all-in investment range

Franchise fee (Item 5)

$30K

upfront, one-time

Royalty (Item 6)

5%

of sales, ongoing

If a unit does this in annual sales…$1M/yr

Your figure — cross-check against this brand's Item 19 and current-owner validation.

Royalty you'd pay / yr

$50K

5% of sales, before profit

Over a 10-yr term

$500K

royalties alone, excl. ad fund

This is not profit. It's the only money the FDD actually pins down — what you put in, and the royalty you owe on every dollar of sales. Your real take-home depends on labor, rent, food cost, and ramp-to-breakeven, none of which any FDD discloses.

Build a real pro-forma for CARIBOU COFFEE with an independent CPA

Labor record

US Dept. of Labor enforcement · franchisee-level · FY2005–present

Federal investigators have concluded 1 wage case against operators of this system, recovering $154 in back wages for 2 workers. These cases name franchisee-owned locations, not the franchisor itself.

Concluded cases

1

Back wages owed

$154

Employees affected

2

Since 2020

0

Read this carefully. The employers in these cases are individual CARIBOU COFFEE franchisees — separately owned businesses operating under the brand name — not CARIBOU COFFEE itself. The franchisor is not the respondent and in most cases is not a party. What the record shows is how this system's operators run their payrolls, which is worth knowing before you become one of them. Counts rise with system size and with age: a 20-year-old, 10,000-unit system will out-count a young one regardless of conduct. Source: DOL Wage and Hour Division concluded compliance actions, FY2005–present, most recent finding 2017.

Distress signals

news-sourced · bankruptcies, closures, lawsuits

No recent closures, bankruptcies, or major lawsuits found in the news for CARIBOU COFFEE. That's a good sign — but it reflects news coverage, not a guarantee.

Before you sign anythingfree · 30 min · no commission

A broker is paid by the franchisor to place you. An independent CPA is paid by you — and the job is pressure-testing CARIBOU COFFEE's numbers, including talking you out of a bad deal.

Talk to an independent CPA before you buy →

CARIBOU COFFEE franchise questions, answered from the filings

What percentage of CARIBOU COFFEE franchises closed last year?

In CARIBOU COFFEE's latest FDD Item 20 (fiscal 2025), 10 of 152 franchised outlets left the system — an annualized exit rate of 6.6% — compared with 8.6% across 137 food & dining systems tracked here. That counts terminations, non-renewals, and "ceased operations — other reasons." There is no official failure rate, and not every exit is a failure, but this is the measurable floor.

How much does a CARIBOU COFFEE franchise cost?

Per CARIBOU COFFEE's 2026 FDD, buying in requires an initial franchise fee of $30K (Item 5) and a total initial investment of $281K–$1.5M (Item 7).

What royalty does CARIBOU COFFEE charge?

CARIBOU COFFEE charges an ongoing royalty of 5.0% of gross sales, per Item 6 of its 2026 FDD.

Does CARIBOU COFFEE disclose earnings (Item 19)?

Yes — CARIBOU COFFEE makes a financial performance representation in Item 19 of its 2026 FDD. Read it closely: franchisors choose which units and which metrics to include.

Is CARIBOU COFFEE a good franchise to buy? Health score, exit rate & costs (2026) · Franchise Watch Desk