23.5 Degrees

23.5 Degrees Limited operates as a prominent franchisee of Starbucks in the United Kingdom, a venture it embarked on after being founded in 2012. The company's name is a nod to the geographic latitudes north and south of the equator that encompass the world's primary coffee-growing regions. It was established by Mark Hepburn and Anil Patil, both of whom brought significant franchising experience to the new enterprise. Hepburn’s background includes working with major brands like Burger King, Wimpey, and KFC, while Patil, a former barrister, had successfully built and sold a large Domino's Pizza franchise.

The company became Starbucks' first franchised business partner in the UK, opening its initial store in February 2013. This move initiated a period of rapid expansion. By September 2015, the company operated 13 stores and soon acquired 16 more from Starbucks directly. A key part of its growth strategy was championing the drive-thru model, which now accounts for over two-thirds of its locations. This focus proved particularly resilient, boosting sales during the COVID-19 pandemic. The business model centers on operating licensed Starbucks stores, generating revenue through the sale of Starbucks' range of beverages and food products to the general public. The company actively seeks premium retail sites for expansion, including locations on arterial routes, retail parks, and high-footfall high streets.

A major milestone in the company's history occurred on October 15, 2024, when Starbucks Coffee Company acquired 23.5 Degrees. At the time of the acquisition, 23.5 Degrees had grown to operate 113 stores and employ approximately 1,650 people. The acquisition increased Starbucks' count of company-operated locations in the UK to nearly 500. For the fiscal year ending August 31, 2024, 23.5 Degrees reported a turnover of £93 million and a pre-tax profit of £4.1 million, a significant increase from the previous year. Prior to the acquisition, the company had ambitious plans to grow to 300 stores. Over its lifetime, it has received substantial investment, including a total of £9 million from Connection Capital and a £17 million funding package from HSBC UK to fuel its expansion.

Keywords: Starbucks franchisee, UK coffee market, food service franchise, drive-thru coffee, retail coffee chain, Mark Hepburn, Anil Patil, restaurant operator, beverage franchise, corporate acquisition, store expansion, hospitality industry, UK retail, cafe network, coffee retail, franchising, food and beverage, quick-service restaurants, retail property development, business growth