Baskin Robbins Franchise in 2024: Costs, Fee & FDD
Explore the sweet success of owning a Baskin Robbins franchise. Learn about startup costs, ongoing fees, revenue potential, and what it takes to scoop up profits in this thriving ice cream business.
Table of Contents:
Baskin Robbins, the world-renowned ice cream franchise, has been serving up delicious scoops of joy since 1945. Founded by brothers-in-law Burt Baskin and Irv Robbins, the brand started with a vision to offer high-quality, creatively flavored ice cream. Over the decades, Baskin Robbins has become synonymous with its “31 flavors” concept, promising a different flavor for each day of the month. With more than 7,500 locations across 50 countries, Baskin Robbins has solidified its position as a leader in the ice cream industry, catering to a diverse range of customers, from families to ice cream enthusiasts of all ages.
At its core, Baskin Robbins offers an extensive variety of ice creams, frozen desserts, and beverages, including ice cream cakes, sundaes, and milkshakes. The brand is known for its innovative and seasonal flavors, which keep customers coming back for more. Whether it’s a scoop of their iconic Mint Chocolate Chip or a custom-made ice cream cake for a special occasion, Baskin Robbins serves up something for everyone. The brand has also expanded its menu to include non-dairy and plant-based options, appealing to a broader audience and staying ahead of industry trends.
Baskin Robbins operates a robust franchise model, with the majority of its stores owned by independent franchisees. The company offers a comprehensive support system, including extensive training programs, marketing assistance, and a streamlined supply chain. Franchisees benefit from the brand’s strong reputation, global recognition, and a loyal customer base that enjoys a nostalgic yet ever-evolving menu. As a franchisee, you’ll be part of a community that prides itself on quality, creativity, and customer satisfaction.
Baskin Robbins Franchise Insights
- Baskin Robbins has over 7,500 locations worldwide, making it one of the largest ice cream franchises in the world, demonstrating the brand’s extensive global reach and popularity.
- Known for its “31 flavors” slogan, Baskin Robbins has introduced more than 1,300 unique ice cream flavors since its founding, appealing to a broad and diverse customer base.
Baskin Robbins Franchise Key indicators
Unit Growth YOY (%)
-2%
vs industry 1%
Total U.S. Franchised Units
978
3-Year Failure Rate
16%
vs industry 11%
Sales-to-Investment ratio
1.1:1
How much does it cost to open a Baskin Robbins franchise?
Understanding the potential investment size and capital requirements is crucial when considering opening a Baskin Robbins franchise. These financial commitments, including initial franchise fees, equipment costs, and ongoing operational expenses, impact the feasibility and profitability of the venture. Thoroughly evaluating these factors ensures that potential franchisees are prepared for the financial responsibilities and can make informed decisions about their ability to sustain and grow the business, ultimately contributing to long-term success.
Min & Max Investment
Opening a Baskin Robbins franchise involves several key costs, which are outlined in Item 7 of the Franchise Disclosure Document (FDD). You can see a breakdown of the costs to open a Baskin Robbins below from the most recent Item 7 below:
| Type of Expenditure | Minimum Investment | Maximum Investment |
|---|---|---|
| Initial Franchise Fee | $25,000 | $25,000 |
| Real Estate Development | $123,000 | $267,000 |
| Equipment, Fixtures, and Signs | $115,000 | $197,760 |
| Restaurant Technology System | $15,000 | $29,500 |
| Licenses, Permits, Fees, and Deposits | $7,000 | $20,000 |
| Opening Inventory | $5,000 | $8,000 |
| Miscellaneous Opening Costs | $9,500 | $28,000 |
| Uniforms | $400 | $800 |
| Insurance | $3,500 | $8,300 |
| Travel and Living Expenses While Training | $1,000 | $15,000 |
| Marketing Start-Up Fee | $3,000 | $6,000 |
| Additional Funds for First 3 Months of Operation | $0 | $52,500 |
| Total Estimated Initial Investment | $307,440 | $657,860 |
Item 7 in the Franchise Disclosure Document (FDD) is the “Estimated Initial Investment” section. It outlines the total costs a franchisee can expect to incur when starting a franchise, including the initial franchise fee, equipment, inventory, real estate, and other startup expenses. This section is crucial because it provides potential franchisees with a detailed understanding of the financial commitment required, helping them assess affordability and plan their investment strategy effectively.
Required Capital
To open a Baskin Robbins franchise, you’ll need to meet certain financial requirements to ensure you’re well-prepared for the investment.
- Initial Investment The total estimated initial investment ranges from $307,000 to $658,000. This includes the franchise fee, real estate, construction, equipment, initial inventory, and additional funds for operational expenses. Assuming that you will finance your franchise investment, you should plan to have 20% of the total investment amount in the form of equity (cash) for the investment.
- Liquid Assets Requirement Baskin Robbins typically requires franchisees to have a minimum of $100,000 in non-borrowed personal resources (liquid assets) to cover unforeseen expenses and maintain financial stability during the startup phase.
- Net Worth Requirement The recommended net worth for potential franchisees is at least $200,000, ensuring that you have a solid financial foundation to support your business.
How much does a Baskin Robbins franchise owner make?
Calculating the salary of a Baskin Robbins franchise owner involves analyzing gross sales to determine total revenue, assessing operational efficiency to understand profit margins, and accounting for franchisor fees and additional expenses such as rent, utilities, and payroll. Effective management of these factors can significantly impact the profitability and financial success of a Baskin Robbins franchise owner. This comprehensive financial analysis helps estimate net profits, from which the owner’s salary can be derived. A clear understanding of these factors ensures accurate salary projections and financial planning for sustainable business operations.
Baskin Robbins Revenue & Gross Sales
Baskin Robbins franchises have an estimated median gross sales of $526,729. This is substantial for the frozen dessert category of the franchise industry. Additionally, this reflects consistent growth due to continued consumer demand and shows potential for solid financial returns for franchisees.
Which key factors impact the average revenue performance of Baskin Robbins franchisees?
Recent improvement in Baskin Robbins franchisee gross sales revenue can be attributed to several factors. The introduction of new and seasonal flavors, combined with effective marketing campaigns, played a significant role in attracting more customers. Additionally, Baskin Robbins’ expansion of its non-dairy and plant-based offerings appealed to health-conscious consumers, broadening its customer base. The brand’s strategic focus on customer experience, including online ordering and delivery services, also contributed to higher sales and increased customer engagement. These combined efforts led to a notable improvement in franchisee gross sales revenue.
Baskin Robbins Franchise Operational Costs
Running a Baskin Robbins franchise involves several key operational costs that are essential to maintaining the business’s daily operations and ensuring customer satisfaction.
- Food and Beverage Costs This includes the expenses for purchasing high-quality ingredients, ice cream, toppings, and beverages needed to create the delicious treats that Baskin Robbins is known for.
- Labor Costs Salaries, wages, and benefits for employees, including those working in customer service, ice cream preparation, and management roles.
- Rent or Mortgage Payments The cost of leasing or owning the property where your Baskin Robbins store is located, including monthly rent, property taxes, and insurance.
- Utilities Expenses for electricity, water, gas, internet, and other utilities required to run the store.
- Maintenance and Repairs Costs associated with the upkeep of your store’s equipment, fixtures, and building, including routine maintenance and unexpected repairs.
- Supplies and Inventory This includes costs for kitchen supplies, cleaning products, office supplies, and inventory management.
- Insurance Various insurance policies, including property, liability, and worker’s compensation insurance.
- Technology and Equipment Costs for maintaining and upgrading point-of-sale systems, freezers, and other essential equipment.
- Miscellaneous Costs Other operational expenses such as licenses, permits, and professional fees.
Managing these operational costs effectively is crucial for the success of your Baskin Robbins franchise. By staying on top of these expenses and ensuring smooth day-to-day operations, you’ll be better positioned to maximize profitability and maintain the high standards that Baskin Robbins customers expect.
Baskin Robbins Franchise Fees
Owning a Baskin Robbins franchise involves paying ongoing fees that are essential for brand support and operational assistance.
- Royalty Fee Baskin Robbins charges a Continuing Franchise Fee (CFF) of 5.9% of gross sales, paid weekly based on the seven-day sales reporting period.
- Advertising and Marketing Fees Franchisees contribute a Continuing Advertising Fee (CAF) of 5.0% of gross sales, which includes 2.5% of gross sales for Single Delivery Outlets (SDOs).
- The Center Annual Subscription Fee Franchisees are required to pay an annual subscription fee of $300 for access to resources provided by the brand, as well as an additional training fee of $2,750 per person for any mandatory training programs.
- Additional Fees There are additional fees for training programs, technology, and other items provided by Baskin Robbins that may be applied.
These ongoing fees are crucial to consider when planning the financial aspects of owning and operating a Baskin Robbins franchise. They help cover the costs of brand support, marketing, and operational assistance provided by the company.
Baskin Robbins Franchise Earnings
The earnings of a Baskin Robbins franchise owner can vary significantly based on factors like location, sales volume, and operational efficiency. However, on average, Baskin Robbins franchisees enjoy steady revenue streams.
Based on the most recent financial data, Baskin Robbins franchisees have median gross sales of $526,729. From these gross sales figures, we calculate that owner-operators earn approximately $79,009, reflecting an operating margin of 15%. For those opting for a semi-absentee model, earnings may be slightly lower due to the additional costs associated with hiring a manager and/or assistant managers to support in daily operations and management.
How to Open a Baskin Robbins Franchise
Becoming a Baskin Robbins franchisee involves several key steps, from the initial inquiry to the start of operations. Here’s an overview of the process:
- Initial Inquiry You or your franchise specialist submits an initial inquiry basic information about your interest and background. You should also conduct thorough research on the franchise, including seeing all of the information available on the Vetted Biz franchise intelligence platform, including access to the most recent Franchise Disclosure Document (FDD).
- Application If your initial inquiry is accepted, you’ll be invited to complete a more detailed application. This application will ask for comprehensive information about your personal and professional background, financial status, and reasons for wanting to become a Baskin-Robbins franchisee.
- Interview Process Following a successful application, you’ll participate in a series of interviews. These may include phone and in-person meetings with Baskin-Robbins representatives, who will assess your business acumen, leadership skills, and alignment with the company’s values and culture.
- Background and Financial Check A thorough background check and financial review will be conducted to ensure you meet Baskin-Robbins’ standards for franchisees.
- Evaluation The evaluation process is competitive and rigorous. Only a select number of applicants will proceed to the next stage, which may involve additional assessments and interviews.
- Approval Once approved, you’ll discuss potential locations for your Baskin-Robbins shop. The corporate team will assist in selecting a site that meets the company’s criteria.
- Training Program Before opening, you’ll undergo an extensive training program provided by Baskin-Robbins. This training covers all aspects of running a franchise, including operations, customer service, marketing, and management.
- Site Selection and Build-Out The corporate team will guide you through the site selection process and assist with the build-out of your store. They will provide support in managing the construction, design, and equipment setup.
- Pre-Opening Preparation As your store is being built, you’ll continue your training and prepare for the launch. This phase includes hiring and training staff, setting up supply chains, and planning marketing strategies.
- Grand Opening Once the store is ready, you’ll host a grand opening event. Baskin-Robbins will provide support to ensure a successful launch and attract customers.
- Ongoing Support After opening, you’ll receive ongoing support from Baskin-Robbins’ corporate team, including marketing assistance, operational guidance, and regular evaluations to ensure the continued success of your franchise.
Pros & Cons
Pros
Brand Recognition: Baskin-Robbins is one of the most well-known ice cream brands worldwide, which can attract a large customer base and provide a significant competitive advantage.
Proven Business Model: Baskin-Robbins has a long-standing, successful franchise system with a track record of profitability, offering a clear roadmap for franchisees.
Product Variety: Baskin-Robbins is famous for its wide variety of flavors, which can attract a diverse customer base and keep the menu exciting and fresh.
Marketing Power: Baskin-Robbins invests in national and local marketing campaigns, ensuring consistent brand visibility and customer engagement.
Cons
Seasonality: Ice cream sales can be highly seasonal, with higher revenue in warmer months and lower sales during colder periods, which can affect cash flow.
Operational Demands: Running a Baskin-Robbins franchise requires a strong commitment, particularly in managing day-to-day operations and ensuring high customer satisfaction.
Competition: The ice cream and frozen dessert market is competitive, with numerous local and national brands vying for consumer attention, which could impact sales.
