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.
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 Häagen-Dazs as well as other Baskin Robbins ice cream shops nearby.
We will analyze the potential A performance measure used to evaluate the efficiency of an investment or compare the efficiency of a number of different investments. ROI tries to directly measure the amount of return on a particular investment, relative to the investment’s cost. and whether the The amount of funds necessary to begin operations of a business or franchise including the first three months of operation. is worth the profit of 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.
The initial total investment needed for beginning operations is between $90,985 and $625,185 if you are opening your first Baskin Robbins franchise.
|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|
a- Sub-Total Initial Franchise Fee $12,500 to $25,000
b- Sub-Total Build Costs $258,000 to $470,521
c- Sub-Total Other $22,400 to $111,600
TOTALS $90,985 to $625,185
Continuing Franchise Fee: 5.9% of gross The total amount in dollars made in the business before expenses are deducted. See also Gross Revenue.
Advertising Fee: 5% of total gross sales
This is significantly higher than other franchises in the industry.
Baskin Robbins has a series of requirements if you want to open a franchise. These requirements include having a Value of all the non-financial and financial assets of a business buyer. There is usually a minimum net worth requirement to qualify as a franchisee and for bank financing. of at least $200,000 per unit and a $100,000 liquidity and going through the application process.
Some additional application requirements are:
|Regions||Total Number of Restaurants in Sample||Average Sales||% Restaurants at or Above Average|
|Total Continental U.S||882||$419,003||43.65%|
|West – South||240||$478,025||42.50%|
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.
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.
|12 days ended December 26,2020||352 days ended December 14,2020||December 28, 2019||December 29, 2018|
|Franchise fess and royalty income||17,279||550,154||596,169||563,499|
|Advertising fees and related income||14,199||440,871||474,387||455,368|
|Operating costs and expenses|
|Amortization of intangible assets||2,283|
|Other operating costs and expenses||189||2,759||3,861||4,113|
|Total operating costs and expenses||16,671||441,927||478,248||459,481|
|Other income (expense), net:|
|A payment from a borrower or deposit-taking financial institution to a lender or depositor of an amount above repayment of the principal sum, at a particular rate. In Vetted Biz, it is typically the additional rate of a loan a business buyer would pay off… income||1||133||409||550|
|Foreign currency gain (loss), net||3||(32)||(93)||(178)|
|Total other income, net||4||101||316||372|
|Income before income taxes||15,507||568,388||614,370||580,688|
|Provission for income taxes||162||3,067||3,779||3,452|
Baskin-Robbins is a When the earnings in a given period of time is more than the expenses in a business. 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.
|Outlet type||Year||Outlets at the Start of the Year||Outlets at the End of the Year||Net Change|
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.
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.