Opening an LCDH/Habanos Spc/etc.

[Derboesekoenig]

I have been toying with the idea of opening a retail location (more a dream than anything), and I was curious as to the process. I know that the LCDH is the main franchise, and from there it goes Habanos Specialist, and finally, Habanos Point. I'm also aware that there are certain stages of the Habanos academy that you must attend/complete. I've sent a few emails through to Habanos SA, but no one has ever replied back to me. Also, does anyone know the stipulations to open any of these? Or a Cohiba Atmosphere--is that controlled by Habanos SA--meaning, do they pick and fund where they open one? 

More importantly, where do I even begin this process if I were to go through with it? 

[BrightonCorgi]

I would start with talking to your regional Habanos distributor and go from there.  What is your locale?

[Derboesekoenig]

I sent emails to Habanos SA and one to the regional distributor for the area I'm interested in. Haven't received anything back. I might need to make a trip over there.

I am an American citizen and I was interested in the Ukrainian market as it seems like the economy will be looking up in the coming years.

[BrightonCorgi]

29 minutes ago, Derboesekoenig said:

I sent emails to Habanos SA and one to the regional distributor for the area I'm interested in. Haven't received anything back. I might need to make a trip over there.

I am an American citizen and I was interested in the Ukrainian market as it seems like the economy will be looking up in the coming years.

I would call the regional distributor on the phone for the Ukraine.  Phone does a lot more to take one serious than emails.

[luv2fly]

1 hour ago, Derboesekoenig said:

I am an American citizen

I too have often thought about a LCDH (could never afford to launch one but I can dream).  

I would be interested to see if we (US citizens) could legally own/operate a business that deals in Cuban goods.  Even if the operation is in another country.

Please keep us posted on your findings.

[Ryan]

Habanos Nordic is the distributer for Ukraine.

Stephan Praetorius (His name is pronounced the Swedish way) is the director there. A phone number for the office can be found on the Habanos.com website.

He's a very approachable guy, perfect English, likes the cigar industry.

[Derboesekoenig]

17 minutes ago, luv2fly said:

I too have often thought about a LCDH (could never afford to launch one but I can dream).  

I would be interested to see if we (US citizens) could legally own/operate a business that deals in Cuban goods.  Even if the operation is in another country.

Please keep us posted on your findings.

This was what I was worried about. Between that and taxes, I almost feel like it would be to my benefit to hand over my citizenship and become a citizen of Cayman islands or something similar where they don't tax foreign earned income. 

[luv2fly]

18 minutes ago, Derboesekoenig said:

This was what I was worried about. Between that and taxes, I almost feel like it would be to my benefit to hand over my citizenship and become a citizen of Cayman islands or something similar where they don't tax foreign earned income. 

The fact that we still have to pay income tax to the government while living and working abroad stinks.  If you were to keep your US citizenship and become a citizen of the Caymans for example, the US does not recognize Dual Citizenship.  You can be a dual but as long as you hold a US passport, you are subject to US law first and foremost. 

Have a friend that has a US and British passport.  Said he wanted to travel to Cuba for vacation but would use his British passport.  After some research he discovered that he could still get into trouble since he is a US citizen as well.

So it appears you would have to renounce US citizenship to remove your tax liabilities (several celebs have done that if I recall correctly) and possibly the legality of dealing in Cuban goods.

Side note:  I dive in Bonaire and for years thought about opening a LCDH there. That would be my ideal retirement setup.  With the cruise ships and dive tourism, I imagine it would be a great business.  Recently a cigar shop dealing in Cuban cigars opened.  Not a LCDH or Specialist but they sell real Cubans. Very nice people.  Business seems to be booming.

Good luck! 

[MountainMilG]

When I was talking with the owner of the new LCDH in Marrakech, he said he was a huge cigar fan and it was always a dream to open one.  He was given an option of I believe three locations where he could start a store, and he decided Marrakech was the best one (I believe the other two were in the Middle East).

If finances and such checks out, I believe (and it sounds like) you're a bit at HSA's mercy as to where you may open a new store.  At least for a full LCDH. 

[bpm32]

34 minutes ago, luv2fly said:

The fact that we still have to pay income tax to the government while living and working abroad stinks.  If you were to keep your US citizenship and become a citizen of the Caymans for example, the US does not recognize Dual Citizenship.  You can be a dual but as long as you hold a US passport, you are subject to US law first and foremost. 

Have a friend that has a US and British passport.  Said he wanted to travel to Cuba for vacation but would use his British passport.  After some research he discovered that he could still get into trouble since he is a US citizen as well.

So it appears you would have to renounce US citizenship to remove your tax liabilities (several celebs have done that if I recall correctly) and possibly the legality of dealing in Cuban goods.

Side note:  I dive in Bonaire and for years thought about opening a LCDH there. That would be my ideal retirement setup.  With the cruise ships and dive tourism, I imagine it would be a great business.  Recently a cigar shop dealing in Cuban cigars opened.  Not a LCDH or Specialist but they sell real Cubans. Very nice people.  Business seems to be booming.

Good luck! 

I think I read that a lot of Americans living abroad don't end up owing much in taxes, if anything, but even the FILING of taxes can be time-consuming, confusing, and expensive. I might be misremembering, but didn't it become difficult for US citizens abroad to even open checking accounts in places like Germany because the US demand for information from foreign banks became too onerous? 

[luv2fly]

5 minutes ago, bpm32 said:

I think I read that a lot of Americans living abroad don't end up owing much in taxes, if anything, but even the FILING of taxes can be time-consuming, confusing, and expensive. I might be misremembering, but didn't it become difficult for US citizens abroad to even open checking accounts in places like Germany because the US demand for information from foreign banks became too onerous? 

Funny you mention that.  A few years ago I was talking with a friend that has an account(s) in the Caymans and he indicated that it was not much of a problem.  I will ask him again the next time I see him.

[BrightonCorgi]

LCDH will have location requirements as they require an uptown address befitting to such a brand.  Same as any high end branded franchise or company store.  Friends of friends opened one in Delhi and I remember it was quite an investment.

[sjmistry]

Interesting topic, as this is something that I pondered myself. I too have sent some e-mails but never received any responses.

Do you all think that the groundwork has been done to open officials Habanos locations in the U.S. if/when the full embargo restrictions have been lifted? Or would existing B&M shops be able to acquire products through their traditional distribution partners?

-Shake

[luv2fly]

42 minutes ago, sjmistry said:

Interesting topic, as this is something that I pondered myself. I too have sent some e-mails but never received any responses.

Do you all think that the groundwork has been done to open officials Habanos locations in the U.S. if/when the full embargo restrictions have been lifted? Or would existing B&M shops be able to acquire products through their traditional distribution partners?

-Shake

Oh I am sure that the US cigar companies have had a plan in place for decades.  I read somewhere years ago the the cigarette companies had a plan for legal pot.  IMHO, if the embargo was ever lifted, it would be a Charlie Foxtrot (cluster F).  

[Lotusguy]

Opening a LCDH requires a huge - and I mean HUGE upfront investment in inventory. Think 6 digits.

[BrightonCorgi]

2 hours ago, sjmistry said:

Interesting topic, as this is something that I pondered myself. I too have sent some e-mails but never received any responses.

Do you all think that the groundwork has been done to open officials Habanos locations in the U.S. if/when the full embargo restrictions have been lifted? Or would existing B&M shops be able to acquire products through their traditional distribution partners?

-Shake

There will be an official Habanos distributor when the time comes.  There will be grey market channels as well.  Imagine the same distribution models are Fuente, Davidoff, etc...  Habanos will be no different.

I heard that there is already a queue for investment in LCDH's in the US.  As mentioned earlier, the franchise requirements are 6 digit which makes sense.

[Derboesekoenig]

17 minutes ago, BrightonCorgi said:

There will be an official Habanos distributor when the time comes.  There will be grey market channels as well.  Imagine the same distribution models are Fuente, Davidoff, etc...  Habanos will be no different.

I heard that there is already a queue for investment in LCDH's in the US.  As mentioned earlier, the franchise requirements are 6 digit which makes sense.

This wouldn't surprise me in the least bit. However, I just don't see the embargo being lifted anytime soon. 

[Fugu]

Most - well all CDHs that I know of have started out as "normal" tobacco/cigar shops. With the owners / shops of which having a longer track record in the business before being appointed resp. given franchise as HS or LCDH. HSA is not particularly waiting for you guys when you are new to the field (should that be the case). If you don't have a cigar-biz background, or don't have at least a longer - successful - history in retail (of a similar demanding product range) - I wish you luck! Having cigars as a hobby is one thing - making a living from it as a merchant is a whole different story. I guess here are some members on the forum who'll be able to add their very personal perspective on that. 

I think the local distributor for Ukraine is Phoenicia Trading, at least according to HSA's web info.

Cheers

[luv2fly]

9 minutes ago, Derboesekoenig said:

This wouldn't surprise me in the least bit. However, I just don't see the embargo being lifted anytime soon. 

I don’t either.  As I said before, it will be a CF.

[Derboesekoenig]

Ok so that makes more sense. Get your feet wet and build the business. Get a working relationship with the distributor. I would feel more comfortable doing this anyway. Starting somewhat small. My friend is investing in wine/vintage in the Ukraine among other businesses, and I thought maybe we could do a combination of something. I want wine + other spirits, cigars, and setup a cafe which roasts in house. Always the best of each worlds, but combined altogether, if that is possible. I'm not in any hurry, but in the infant stages of researching, crunching numbers, etc. to see if this is doable. 

[Danimalia]

Just me spitballing here, but I think, if it was me, I'd be more interested in opening an independent cigar shop that sells Habanos, or a Habanos Specialists shop, than a LCDH. When you're an LCDH, you're basically a retail franchise of Habanos SA, no? Seems you'd be sacrificing a lot of independence, and judging by some of the posts I see from El Prez and others that deal with HSA, it seems they can be difficult. And the Prez isn't even an LCDH. I also am a cigar fan, in general, and enjoy many cigars from Nicaragua, DR, Honduras, etc., and would want to be able to sell some of those as well, which I believe is impossible for LCDH franchises (though I'm not positive)

Again, I'm just speculating. It could be the opposite in that the LCDH gets priority treatment, but I'd want to know for sure.

Either way, good luck!

[stogieluver]

I wouldn’t invest any capital in a business that can be taken away on a whim of the Cuban government.  

Go to Little Havana in Miami and ask around about that.

Go to the real Havana and ask the paladar and other small business owners who no longer have a business and lost everything recently due to new “regulations”.  

I would love to own a LCDH, but no way am I risking capital with the Cuban government. 

[El Presidente]

I am not sure how many LCDH are actually profitable. 

The only true benefit of the LCDH moniker is access to LCDH product.  Apparently. 

[Danimalia]

20 minutes ago, El Presidente said:

The only true benefit of the LCDH moniker is access to LCDH product.  Apparently. 

I hope I'm not asking something I shouldn't but I've always been curious. The LCDH releases are described as exclusives, yet they seem to end up being sold by plenty of non-LCDH shops and merchants. What's up with that? 

[El Presidente]

2 minutes ago, Danimalia said:

I hope I'm not asking something I shouldn't but I've always been curious. The LCDH releases are described as exclusives, yet they seem to end up being sold by plenty of non-LCDH shops and merchants. What's up with that? 

......I have no idea