Coffee Shop Feasibility Study in Texas

Texas coffee shop and snack bar lending is a franchise business. Franchise units account for 63.3% of the 938 loans SBA approved in the state from FY2017 to FY2026, which totalled $439.5 million and rank Texas 2 of 53. Among Texas classes, coffee holds rank 7 of 39, and the location quotient of 1.54x says Texas devotes far more of its SBA lending to coffee shops than the national pattern would predict. The median loan, $348,250, is 1.45x the national median. The median and both outcome rates are not flagged against Texas lending overall or the class nationally, but the charge-off floor is the number a Texas lender will weigh hardest.

Losses in the Texas coffee cohort

Of the 302 loans disbursed in FY2017 to FY2021, 10.9% have been charged off to date, a floor, and 7.0% were lost inside five years of approval. Cancellation runs lower, at a floor of 10.3% and a ceiling of 12.2%. For a borrower, a loss record like this is a reason to build the projections from what comparable units actually did. For a lender, it argues for careful site selection rather than for avoiding the class.

Rapid growth and a concentrated lender field

Approvals rose from 68 and $15.3 million in FY2017 to 147 and $83.9 million in FY2025, with 141 and $85.9 million in FY2026. Half of the loans fall between $167,475 and $540,750, and SBA 7(a) carries 902 of the approvals against 36 under SBA 504. The Huntington National Bank holds 109 loans worth $42.8 million; Frost Bank holds 30, Citizens Bank 27, Wells Fargo Bank National Association 27 and United Community Bank 24. Capital Certified Development Corporation leads a small 504 field with 15. These counts come from SBA's record of who holds each coffee loan today.

What a Texas coffee study must test

The counties already carrying the most SBA-financed units are Harris with 149 approvals, Tarrant with 82, Collin with 70, Dallas with 67, Bexar with 66 and Denton with 63, and a study has to place the unit against those competitors on traffic counts, access and drive-through stacking. Cost testing covers the pad or end-cap build and the franchise package. Debt service coverage must be run on the brand's actual unit volumes in comparable trade areas, stressed for the slow first year that the loss floor warns about. Where a ground lease or owned pad is involved, the appraisal has to stand on its own comparables. The class has no special coding caveat, so the limits that matter are the floors themselves.