How to Finance a Shibam Coffee Franchise: Arabic Coffee House
By Chris Cornella
A Shibam Coffee franchise loan funds a Yemeni coffee house serving traditional spiced coffees, Adeni milk tea and honey-drizzled pastries alongside a full espresso bar. Shibam Coffee Co. is listed on the SBA Franchise Directory, which opens the door to SBA 7(a) financing, but the brand publishes few cost details, so careful work with the Franchise Disclosure Document (FDD) is essential.
This article covers what Shibam Coffee shares about its cafes, the costs to confirm before borrowing, the financing options that fit a coffee house and what the brand’s SBA directory notes mean.
US Professional Funding is not affiliated with, sponsored by or endorsed by Shibam Coffee Co.; the name is used only to describe the business. Figures from the franchisor’s disclosure document and website can change, loan programs vary, and every loan is subject to approval. Nothing here is legal, tax or investment advice, and buyers should review the current FDD with a franchise attorney and accountant.
Shibam Coffee Franchise Loan at a Glance
- Concept: a Yemeni coffee house offering traditional Yemeni coffees and teas, espresso drinks, refreshers and Middle Eastern pastries.
- System size: the company’s locations page lists 24 cafes across Michigan, Ohio, Illinois, Pennsylvania, West Virginia, New York, Georgia, Texas, Alabama, Kentucky and Florida.
- Franchise inquiries: accepted through the company’s website, which asks about your target market, business or management experience and timeline.
- Fees and investment: not published on the company’s website; the investment ranges on the inquiry form are for screening only and do not represent franchise costs.
- Sales channels: dine-in, a mobile ordering app, catering and an online shop.
- SBA Franchise Directory: listed as Shibam Coffee Co. under code S8222, with notes on lease documents and lien position.
What Is Shibam Coffee?
Shibam Coffee Co. describes its mission as bringing authentic Yemeni coffee, rich culture and community impact to every cup, with a heritage it says stretches back generations in Yemen. Most of its cafes are in Michigan, and the system has expanded into Ohio, Illinois, Pennsylvania and several Southern and Eastern states.
The menu. Shibam’s menu centers on Yemeni coffee preparations such as Mufawar, Sana’ani, Jubani and Rad’ai, along with Qishr, a drink brewed from coffee husks. The tea list features Adeni tea, a spiced milk tea, plus Yemeni and Moroccan mint teas. A full espresso bar serves lattes, cortados, pour-overs and specialty drinks like a pistachio latte, and refreshers round out the cold menu. Pastries include sabaya, a flaky layered pastry served with honey, as well as honeycomb, milk cake and basbousa.
Why the concept matters to lenders. A coffee house built around lounge seating and social visits can draw traffic later in the day than a morning-focused coffee shop, which changes staffing and sales patterns. Lenders still underwrite each cafe on its own site, staffing plan and projections, and they will want to understand how a newer, fast-growing system supports its owners. Our article on financing an emerging franchise explains how lenders approach younger brands.
Shibam Coffee Franchise Costs
Shibam Coffee does not post its franchise fee, royalty or estimated initial investment on its website. Its franchise inquiry form asks candidates to choose a general investment range, but the company states that this field does not represent a stated franchise cost. Request the FDD early and build your budget from Items 5, 6 and 7.
Initial franchise fee. Item 5 lists the fee, when it is due and any multi-unit or development fees.
Real estate and build-out. Most coffee houses lease retail space, and Yemeni cafes often devote more room to seating and lounge areas than grab-and-go coffee shops. Build-out costs depend on plumbing, electrical capacity for espresso machines and ovens, ventilation and finishes. Our article on restaurant build-out financing covers how lenders fund construction.
Equipment. Expect espresso machines and grinders, brewing equipment for traditional coffees and teas, refrigeration, pastry cases, ovens or warming equipment, ice machines, furniture and point-of-sale systems.
Opening costs and working capital. Opening inventory of coffee and spices, training travel, grand opening marketing, insurance, deposits, permits and additional funds for the first months should all appear in Item 7.
Total investment. When you receive the FDD, confirm that the Item 7 line items add up to the stated total. A typical coffee house Item 7 includes:
- Initial franchise fee
- Leasehold improvements and construction
- Furniture, fixtures and signage
- Coffee, tea and pastry equipment
- Technology and point-of-sale systems
- Opening inventory and supplies
- Training travel and grand opening marketing
- Deposits, permits, insurance and professional fees
- Additional funds for the initial operating period
Ask the franchisor whether any equipment, coffee or pastries must be bought from approved suppliers, since that affects both your opening budget and ongoing margins.
Ongoing Fees and How They Affect Your Loan
Item 6 of the FDD lists the royalty, any marketing or brand fund contribution, technology and app fees, transfer and renewal fees, and any remodel requirements. Because Shibam does not publish these on its website, read Item 6 closely before you build projections.
How lenders factor these costs in. Royalty and marketing contributions usually come off gross sales before rent, labor, product costs and debt service. Lenders will also look at the cost of imported coffee and spices, the labor needed to cover the cafe’s operating hours and any fees tied to app ordering. They want to see enough cash flow left after all of these to cover loan payments with a cushion.
Franchisor Requirements for New Owners
Shibam Coffee does not publish minimum net worth or liquid capital requirements. Its inquiry form asks for:
- Your current location and the market you want to develop
- Your general investment range
- Your business or management experience
- Your desired timeline, from as soon as possible to a year or two out
The approval process. After an inquiry, expect conversations with the franchise team, receipt of the FDD, a waiting period before signing and work on site selection and lease negotiation. Ask about training length and location, opening support and how the company helps owners source traditional coffee and spices.
Lenders will set their own expectations for cash, credit and experience regardless of the franchisor’s screening.
Ways to Own a Shibam Coffee
Opening a new cafe. Most owners will open a new location in leased space. Lenders underwrite the request on projections, the lease and build-out budget, and the owner’s finances. Our page on restaurant start-up financing explains how we approach a new unit.
Buying an existing cafe. If an existing Shibam location becomes available, its sales history gives a lender something concrete to underwrite. The transfer requires franchisor approval under Item 17 of the FDD. Read about buying a franchise resale.
Opening multiple cafes. Owners interested in a market rather than a single site should ask whether Shibam offers development agreements and how they are scheduled and priced.
Financing Options for a Shibam Coffee Franchise
SBA 7(a) loans. Because Shibam Coffee Co. is on the SBA Franchise Directory, SBA 7(a) financing is often the best fit for a Shibam Coffee franchise loan. One loan can cover the franchise fee, build-out, equipment and working capital.
SBA 504 loans. The SBA 504 program finances owner-occupied real estate and long-lived equipment. It fits when an owner buys a building for the cafe, and the directory notes below about lien position are especially relevant to it.
Conventional term loans. Borrowers with strong credit and collateral may use a conventional business loan, particularly when adding a cafe to an existing group or buying a location with proven results.
Equipment financing. Espresso machines, grinders, brewers, pastry cases, ovens and refrigeration can often be financed separately to preserve cash. Learn more about restaurant equipment financing and leasing.
Working capital and lines of credit. A new cafe needs cash for payroll, inventory of imported coffee and spices, and marketing while the customer base builds. See our restaurant working capital options.
Seller financing on resales. On a resale, a seller may carry part of the price. Seller notes are typically subordinate to the senior loan, and SBA program rules may limit their terms.
SBA Loans for Shibam Coffee Franchisees
The SBA Franchise Directory lists franchise brands whose agreements have been reviewed for SBA eligibility, and SBA lenders generally require a listing before making an SBA-guaranteed loan to a franchisee. A listing does not approve any borrower.
Shibam’s directory listing. Shibam Coffee Co. is listed under code S8222 with two notes:
- Lease Addendum and Collateral Assignment of Lease: when the real estate where the cafe is located will secure the SBA-guaranteed loan, these lease documents may not be executed. In plain terms, documents that give the franchisor rights to take over the location’s lease cannot be signed when the lender is relying on that real estate as collateral.
- Lien position: the lender or certified development company must make sure it obtains the correct lien position on all collateral, as SBA loan program rules require. This mainly affects how the lender documents its security interest, and your attorney should confirm that franchise documents do not conflict with it.
For owners who lease their space and do not pledge real estate, the first note may not apply, but the lender will still review the lease documents at closing.
Loan size. The SBA 7(a) program maximum is currently $5 million, though program rules can change. A single cafe typically falls well within that limit. Our SBA loan calculator can help with early estimates; results are for planning only and are not an offer or approval.
How Lenders Evaluate a Shibam Coffee Deal
Personal credit and financial history. Every Shibam Coffee franchise loan begins with a review of credit, tax returns and a personal financial statement, and a personal guarantee is expected.
Net worth and liquidity. Lenders look for cash for the equity injection plus reserves after opening.
Industry and management experience. Food service, hospitality or retail management experience strengthens the request. If you are new to the industry, a strong cafe manager and franchisor training help.
Business plan and projections. Model daily traffic across morning, afternoon and evening, average ticket, pastry attach rates, catering and app orders, and the fees in Item 6. Show a realistic ramp-up.
The FDD and franchise agreement. Lenders review the term, renewal and transfer terms in Item 17, and Items 3 and 4 for litigation and bankruptcy history. Item 19 shows whether the FDD includes financial performance representations. See how lenders read an FDD.
Site and lease. Visibility, parking, evening foot traffic and lease length matter, and lenders generally want the lease to cover the loan term.
Multi-Unit Growth
Shibam’s spread to 24 cafes across 11 states shows that owners are opening in new markets. If you plan more than one cafe, review any development schedule carefully. Lenders usually finance the first cafe, then underwrite additional units using its results along with the new site’s projections.
Real-World Scenarios
A first-time owner using SBA 7(a). A former retail manager opens a cafe in a suburban shopping center. An SBA 7(a) loan covers the franchise fee, build-out, equipment and working capital, and the lender reviews the lease documents in light of the directory notes.
An owner buying the building. An investor buys a small freestanding building for a cafe and uses an SBA 504 loan for the property, with the lender confirming its lien position under the directory note.
An existing owner adding a second cafe. After a year of results, an owner opens a second location in a nearby city, financing it with a conventional loan supported by the first cafe’s cash flow.
Common Mistakes to Avoid
- Using the inquiry form’s investment ranges as a budget instead of the FDD’s Item 7
- Overlooking the lease document restrictions in the SBA directory notes
- Underestimating labor for the cafe’s full operating hours
- Ignoring the cost of imported coffee and spices in projections
- Leaving too little working capital for the first months
For more pitfalls, read restaurant loan mistakes to avoid.
Next Steps to Finance Your Shibam Coffee Franchise
Step 1: Submit an inquiry and request the FDD. Review Items 5, 6, 7, 10, 17 and 19 with a franchise attorney.
Step 2: Review your finances. Prepare a personal financial statement and confirm available cash.
Step 3: Talk with a financing specialist. Compare SBA 7(a) and conventional options.
Step 4: Choose a site. Get a letter of intent and contractor bids for the build-out.
Step 5: Build your business plan. Include projections, staffing and local marketing.
Step 6: Apply and close. Submit the loan package and coordinate lease and franchise documents with your lender.
Shibam Coffee Franchise Loan FAQs
How much does a Shibam Coffee franchise cost?
Shibam does not publish its investment estimate on its website. The current FDD’s Item 7 table gives the estimated initial investment and its line items.
What is the Shibam Coffee franchise fee?
The fee is disclosed in Item 5 of the FDD and is not posted on the company’s website.
Can I get an SBA loan for a Shibam Coffee franchise?
Yes, the brand is listed on the SBA Franchise Directory as Shibam Coffee Co. under code S8222, so SBA lenders can consider it. Each borrower must still qualify.
What do the SBA directory notes mean?
When the cafe’s real estate secures the SBA-guaranteed loan, the Lease Addendum and Collateral Assignment of Lease may not be signed, and the lender must secure the correct lien position on all collateral.
How many Shibam Coffee locations are there?
The company’s locations page lists 24 cafes in 11 states.
Do I need coffee shop experience?
The company’s inquiry form asks about business or management experience; confirm specific requirements with the franchisor. Lenders favor food service or management experience.
Does Shibam Coffee offer financing?
The website does not describe franchisor financing. Check Item 10 of the FDD.
Can I finance equipment separately?
Yes. Espresso machines, brewers, ovens and refrigeration can often be financed through equipment loans or leases.
Can I buy an existing Shibam cafe?
When one is available and the franchisor approves the transfer, a resale can be financed using the cafe’s actual sales history.
What royalty does Shibam charge?
The royalty and other ongoing fees are listed in Item 6 of the FDD.
Final Thoughts
Shibam Coffee pairs a distinctive Yemeni coffee menu with an SBA directory listing, a useful combination for buyers. A strong Shibam Coffee franchise loan request starts with the FDD, a complete build-out and equipment budget, careful handling of the lease documents and realistic projections for daytime and evening traffic.
US Professional Funding helps franchise owners finance start-ups, acquisitions, equipment and working capital. Learn more about our franchise financing and restaurant financing solutions.
