Coffee Shop Feasibility Study in Tennessee

Franchise-driven coffee loans in Tennessee

Tennessee coffee and snack bar loans are large for their class, and the median is the measure that sets the cell apart. Across 124 SBA approvals from FY2017 to FY2026, worth $63.9 million, the Tennessee midpoint is $355,600, which is 1.48x the class median across the nation, and our screen finds that gap beyond the margin against both Tennessee lending in every class and coffee shops nationally. The quartile band runs from $148,750 to $600,000. Those sums buy a freestanding pad, a drive-through build or an established store, not just an espresso machine.

Franchising is the likeliest explanation. Branded concepts hold 58.1% of Tennessee coffee approvals, a majority, and franchise prototypes tend to come with site work, drive lanes and equipment packages that push loan size up. Nearly the whole book is 7(a), 123 approvals against 1 under SBA 504, and The Huntington National Bank leads Tennessee holders with 20 loans worth $8.2 million; Pinnacle Bank's 8 come to $6.1 million and Citizens Bank's 8 to $3.1 million, while United Community Bank and Brightbridge, Inc. hold 5 each. The class is heavier here than nationally, with a location quotient of 1.45x; Tennessee ranks 21 of 53 for the class, and coffee shops rank 5 of 39 among the state's classes.

Outcomes, and one figure we withhold

In Tennessee, cafe commitments issued during FY2017 to FY2024 were cancelled 11.6% of the time, a floor, rising to 14.5% at the ceiling when undisbursed commitments are counted as cancelled. The charge-off rate for this Tennessee cell is withheld: fewer than 30 Tennessee cafe loans sit in the FY2017 to FY2021 disbursement group, and we print no loss rate on a base that thin, so treat the loss record as unknown, not clean. Most of the volume is recent. Approvals ran between 3 and 5 a year through FY2020, climbed to 14 and 15 in FY2021 and FY2022, and reached 39 in FY2025 before 16 in FY2026, so many of these loans have not yet been tested by a downturn.

Testing a Tennessee coffee project

Davidson and Knox counties hold 21 approvals each, with Sevier at 10, Sumner at 9 and Williamson at 8. Most of the demand work concerns the drive-through: car counts on the approach, stacking room and turn access, and the competing brands already on the same corridor. Price the franchise's prototype build, site work and equipment at current bids. Tennessee coverage math needs an honest ramp in transactions per hour and should be stressed for the franchise's royalty and marketing charges, which come off the top. Where the borrower buys the pad, the appraisal has to value the site for a general quick-service user, because a single-brand building may not carry its cost if the concept leaves. No coding limitation or shared code applies to this class here.