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Baskin Robbins Franchise Cost Way Too High (2022)

Written by: Dylan Tymkiw
Last Updated by Catalina Lima: August 19, 2022
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This article is based on the video featured above, originally recorded for Vetted Biz YouTube channel.

You might not need to be a retail expert to succeed with a Baskin-Robbins franchise.

Ice cream is one of the biggest industries in the US and worldwide and no wonder why – the ice cream industry is one of the few that lets you adapt fast to new trends and consumer preferences. Baskin-Robbins franchise is one of the biggest ice cream shop franchises and you could very well own one.

Contents

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Baskin-Robbins Franchise

Baskin-Robbins Franchising has been offering franchises since 2006 and it is located in Canton, Massachusetts.

The ice cream industry is highly competitive! Competitors of Baskin Robbins include very well known franchises in the ice cream industry like Ben & Jerry, Nestle, or Haagen-Dazs as well as other Baskin Robbins ice cream shops nearby.

We will analyze the potential return on investment and whether the initial investment is worth the profit of a Baskin Robbins franchise.

baskin robbins featured

How Much Is A Baskin-Robbins Franchise?

The standard initial fee to open a Baskin Robbins franchise is $25,000. This fee must be paid out of pocket, which means you cannot borrow money to pay for this fee. For every additional unit that you open you have to pay a $25,000 fee.

Baskin-Robbins Franchise Cost (Initial Investment)

The standard initial fee to open a Baskin Robbins franchise is $25,000. This fee must be paid out of pocket, which means you cannot borrow money to pay for this fee. For every additional unit that you open you have to pay a $25,000 fee.

Type of Expenditure Category Amount Method of Payment When due To Whom Payment is to be Made
Initial Franchise Fee (20-year term) Build Cost 12,500 to 25,000 Before opening Us
Real Estate Development Build Cost 123,000 to 267,000 Lump Sum or Financed Before opening Us or Third Parties (Your Landlord and/or Contractor)
Equipment, Fixtures and Signs Build Cost 115,000 to 197,760 Lump Sum or Financed As Incurred, Before Opening Approved Suppliers
Restaurant Technology System Build Cost 1,440 to 15,000 Lump Sum or Financed As Incurred Before Installation Approved Suppliers
Licenses, Permits, Fees and Deposits Build Cost 6,000 to 20,000 Lump Sum or Financed Before Opening Municipalities, Lessor or Us
Opening Inventorty Other 5,000 to 8,000 Lump Sum Before Opening Us and/or Approved Suppliers
Miscellaneous Opening Costs Other 9,500 to 28,000 Lump Sum As Incurred Suppliers, Utilities, Employees, Etc
Uniforms Other 400 to 800 Lump Sum Before Opening Approved Supplier
Insurance Other 3,500 to 8,300 Lump Sum or payment options Lump sum or down payment, before opening Insurance Company // Agent
Travel and Living Expenses While Training Other 1,000 to 9,000 Lump Sum As Incurred, before and during training Airlines, Rental Car Agencies, Restaurants, Hotels, etc
Marketing Start-Up Fee Other 3,000 to 5,000 Lump Sum Before Opening Us or Third Parties
Additional Funds for First 3 Months of Operation Other 0 to 52,000 Lump Sum and As Incurred During First Three Months of Operation Us, Third Parties and Employees
  1. Sub-Total Initial Franchise Fee $12,500 to $25,000
  2. Sub-Total Build Costs $258,000 to $470,521
  3. Sub-Total Other $22,400 to $111,600

TOTALS $90,985 to $625,185

Baskin-Robbins Ongoing Costs And Fees

  • Continuing Franchise Fee: 5.9% of gross sales
  • Advertising Fee: 5% of total gross sales

This is significantly higher than other franchises in the industry.

What Is Required To Open A Baskin-Robbins Franchise?

Baskin Robbins has a series of requirements if you want to open a franchise. These requirements include having a net worth of at least $200,000 per unit and a $100,000 liquidity and going through the application process.

Some additional application requirements are:

  • Food service or multi-management experience
  • Submitting a business plan
  • Being passionate about Baskin Robbins and its products

How Much Do Baskin-Robbins Franchise Owners Make?

RegionsTotal Number of Restaurants in SampleAverage Sales% Restaurants at or Above Average
Total Continental U.S882$419,00343.65%
West – North245$449,40842.04%
West – South240$478,02542.50%
Mountain West242$363,30540.50%
East155$366,51643.87%

2019-2020 Franchise Average Net Sales: $419,003

The average net sales in the US are $419,003. However, sales seem to vary significantly depending on the location of the shop. This is important to note as you decide where to open your franchise.

1- Based on a midpoint investment of $358,085 with estimated profits of $41,900 at a 10% profit margin it would take about 10 years to recoup your investment.

2- Based on a midpoint investment of $358,085 with estimated profits of $62,850 at a 15% profit margin it would take about 8 years to recoup your investment.

3- Based on a midpoint investment of $358,085 with estimated profits of $83,800 at a 20% profit margin it would take about 6 years to recoup your investment.

baskin-robbins franchise

Is Baskin-Robbins Franchise Profit Worth The Franchise Cost?

After a few years in the business, when you go to sell your franchise based on the median multiple of .44 and net sales average from 2019-2020 of $419,003 a Baskin-Robbins franchise would sell for about $184,361. This is 51% less than the midpoint initial investment of $358,085 which means you would most likely be selling at a loss.

Baskin-Robbins Franchise Income Statement

 12 days ended December 26,2020352 days ended December 14,2020December 28, 2019December 29, 2018
Revenues:    
Franchise fess and royalty income17,279550,154596,169563,499
Advertising fees and related income14,199440,871474,387455,368
Licensing fees57415,69417,57016,798
Other revenues1223,4954,1764,132
Total revenues32,1741,010,2141,092,3021,039,797
Operating costs and expenses:    
Advertising expenses14,199439,168474,387455,368
Amortization of intangible assets2,283   
Other operating costs and expenses1892,7593,8614,113
Total operating costs and expenses16,671441,927478,248459,481
Operating income15,503568,287614,054580,316
Other income (expense), net:    
Interest income1133409550
Foreign currency gain (loss), net3(32)(93)(178)
Total other income, net4101316372
Income before income taxes15,507568,388614,370580,688
Provission for income taxes1623,0673,7793,452
Net income15,345563,321610,591577,236

Baskin-Robbins is a profitable business for the franchisor with income that surpasses the half million dollars in every fiscal year.

On top of that, Baskin-Robbins is seeing stable growth. Its revenue increased 5% from 2018 to 2019, and despite the pandemic which had a huge impact on competitors like Haagen-Dazs, Baskin-Robbins only saw a decline in revenue of 4% probably thanks to their delivery and take-out options. 

How Many Baskin-Robbins Units Have Opened And Closed?

System-wide Outlet Summary

Outlet type Year Outlets at the Start of the Year Outlets at the End of the Year Net Change
Franchised 2018 1,072 8 -79
2019 993 24 -44
2020 949 57 -55
Company-Owned 2018 0 5 0
2019 0 7 0
2020 0 9 0
Total Outlets 2018 1,029 13 -36
2019 993 31 -44
2020 949 66 -55

The number of franchises have been in decay over the last three years, shrinking at a rate of over 50 outlets a year. This could be an indicator that the franchises are not performing well and that maybe they are not seeing significant profit.

Conclusion

Baskin-Robbins is one of the most popular ice cream franchises in America. Ice cream is also the most popular frozen dairy product in the US, and no matter what, people will always consume it. It is also an industry that lets you adapt to new trends without a significant investment.

If you open a Baskin-Robbins franchise you can recoup your investment in 4 to 8 years depending on your profits, which is still faster than other franchises in the ice cream industry. When you go and sell your franchise, it will be at a loss.  

A positive aspect of Baskin-Robbins its robust delivery and take-out system which they continue to advertise which helped franchisees during the Covid-19 pandemic and it can also counter the location effect which makes Baskin-Robbins more accessible to people who do not understand a lot about real estate than other franchises in the ice cream industry.

It is important to note that the number of outlets has been in decline for the last three years. Which could be an indicator that franchise owners might be doing so well.

Our suggestion is to speak to at least one franchise owner before opening a franchise yourself. And to research which would be the best location for your franchise since location has a large impact on net sales.

If you think Baskin-Robbins is the right franchise for you or you want to explore other franchise opportunities, check out our listing page on the Vetted Biz website for thousands of franchises available for your investment.

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