Dippin Dots Franchise in 2024: Costs, Fee & FDD
Thinking of investing in a Dippin’ Dots franchise? Discover the costs, opportunities, and key factors to consider before making your decision. Read our full analysis to learn if this innovative brand is the right fit for you!
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Dippin’ Dots, founded in 1988 by Curt Jones, revolutionized the ice cream industry by flash-freezing it into small pellets using liquid nitrogen. This innovation set the brand apart, earning the nickname “ice cream of the future.” The company quickly gained popularity, especially in high-traffic areas like amusement parks and sports venues, offering a fun, futuristic take on traditional ice cream.
The core product is its signature flash-frozen ice cream in a variety of flavors, with additional offerings like frozen yogurt, slushes, and ice cream sandwiches. Dippin’ Dots’ appeal is strong among families, children, and young adults, drawn to its unique texture and the ability to customize their dessert with different flavor combinations.
Dippin’ Dots operates over 100 locations in the U.S. and internationally, reaching customers in over 30 countries. With mobile units and kiosks, the brand has grown to serve tens of thousands of customers daily in places like malls, movie theaters, and amusement parks.
Franchisees receive comprehensive training in operations, marketing, and customer service. Ongoing support includes regional meetings and operational guidance, along with a relatively low-cost investment compared to other dessert franchises, making Dippin’ Dots an attractive option for entrepreneurs looking for a unique and innovative business opportunity.
Dippin’ Dots Franchise Insights
- Dippin’ Dots was founded in 1999 and has become a recognized brand within the dessert industry, particularly in the Restaurants & Food sector. As of now, it has 246 locations in the U.S., all of which are franchised, meaning there are no corporate-owned units.
- The brand’s signature flash-frozen ice cream is a highly differentiated product, with the unique texture and custom flavor combinations appealing to a broad demographic, particularly families and young adults. The fun, interactive experience that Dippin’ Dots provides makes it an especially popular choice in entertainment and leisure settings.
- Dippin’ Dots is an iconic brand, often referred to as the “ice cream of the future,” which continues to resonate with customers who seek fun and innovative dining experiences. The company has cultivated a loyal following through its distinct product offerings and its strong presence in major entertainment venues.
Dippin’ Dots Franchise Key indicators
Growth YOY (%)
3%
vs industry 1%
Total U.S. Franchised Units
246
3-Year Failure Rate
5%
vs industry 10%
How much does it cost to open a Dippin’ Dots franchise?
Understanding the potential investment size and capital requirements is crucial when considering opening a Dippin’ Dots 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 Dippin’ Dots 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 Dippin’ Dots below from the most recent Item 7 below:
| Type of Expenditure | Minimum Investment | Maximum Investment |
|---|---|---|
| Initial Franchise Fee | $35,000 | $35,000 |
| Grand Opening Advertising Materials Expenditure | $500 | $2,500 |
| Credit Card and Gift Card Processing | $755 | $800 |
| Office and Retail Supplies | $100 | $500 |
| Opening Inventory | $2,500 | $5,250 |
| Insurance | $1,500 | $2,500 |
| Printing and Signage | $499 | $5,000 |
| Equipment (Freezers, etc.) | $65,700 | $84,900 |
| Leased Warehouse and Cold Storage | $5,000 | $20,000 |
| 20 Ft. Box Truck Monthly Payments to Lease/Own | $1,000 | $2,000 |
| Travel, Lodging, Meals, etc. for Initial Training | $1,500 | $2,500 |
| Real Estate and Improvements | $2,400 | $120,000 |
| Security Deposit and Prepaid Rent | $500 | $10,000 |
| Miscellaneous Startup Costs | $12,500 | $32,500 |
| Additional Funds (6 months) | $10,250 | $63,500 |
| Total | $139,704 | $386,950 |
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 Dippin’ Dots franchise, the required capital involves both the initial investment costs and a net worth requirement set by Dippin’ Dots. Let’s take a closer look below:
- Initial Investment As shown above, the total estimated initial investment ranges from $139,700 to $386,950. This includes all the startup costs such as the franchise fee, real estate, construction, equipment, initial inventory, and additional funds for initial operating 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 For a franchise of this type, liquid assets (cash or easily accessible assets) could range from approximately $50,000 to $100,000. This would be important to cover ongoing operating expenses and provide financial flexibility.
- Net Worth A typical requirement for a franchise in the dessert or food industry could be in the ballpark of $300,000 to $500,000 in net worth, though it can vary based on the specific franchise system.
How much does a Dippin’ Dots franchise owner make?
Calculating the salary of a Dippin’ Dots 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 Dippin’ Dots 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.
Dippin’ Dots Revenue & Gross Sales
Unfortunately, the specific median gross sales for Dippin’ Dots franchises are not publicly available. However, based on the overall growth of the brand and its expansion to 246 U.S. locations, Dippin’ Dots appears to be performing well in the marketplace, especially in high-traffic areas like amusement parks and malls. The brand’s popularity and unique product offering have contributed to its continued success and customer loyalty in the dessert sector.
Which key factors impact the average revenue performance of Dippin’ Dots franchisees?
Several factors likely contributed to the performance of U.S. franchisee median gross sales for Dippin’ Dots this past year compared to the prior year. Firstly, the brand’s strong presence in high-traffic, entertainment-heavy locations such as amusement parks, sports arenas, and malls may have led to increased customer volume, particularly as venues recovered from pandemic-related restrictions. Additionally, Dippin’ Dots’ innovative, fun product offering continues to attract families, young adults, and new customers seeking unique experiences, further boosting sales. The franchise’s ability to operate mobile units and kiosks also offers flexibility, allowing franchisees to reach different markets and capitalize on seasonal demand. Marketing efforts, such as brand collaborations and promotions, may have played a role in driving increased awareness and foot traffic, contributing to a positive performance year-over-year.
Dippin’ Dots Franchise Operational Costs
When opening a Dippin’ Dots franchise, aside from general franchise-related costs, there are several primary ongoing operational costs to consider:
- Inventory and Supplies Regularly replenishing the frozen ice cream products, toppings, and other ingredients will be a significant ongoing expense. Managing inventory levels to meet demand without overstocking is key.
- Labor Costs Hiring and compensating staff to run the location, including wages, benefits, and potential overtime, depending on your hours of operation. Labor costs can vary depending on location and the size of the staff required.
- Lease and Utilities The cost of leasing the physical space, whether it’s a kiosk, a store, or a mobile unit, along with utility expenses (electricity, water, refrigeration) to keep products at the correct temperature.
- Equipment Maintenance Regular maintenance and repairs for equipment such as refrigeration units, freezers, point-of-sale systems, and other machinery will ensure smooth operation and prevent downtime.
- Packaging and Consumables Costs for disposable items like cups, cones, napkins, straws, and other packaging materials that are needed to serve customers.
- Insurance Ongoing premiums for general liability insurance, workers’ compensation, and other types of coverage necessary to protect the business.
These are critical ongoing expenses that will contribute to your operational budget and need to be factored into your financial planning.
Dippin’ Dots Franchise Fees
When opening a Dippin’ Dots franchise, there are several ongoing fees that franchisees should consider to ensure they maintain compliance and smooth operations. These fees are related to product purchases and advertising contributions, among others. Here’s a breakdown of the relevant fees for running a Dippin’ Dots location:
- Royalty Fee The fee depends on the quantity of units sold, with a set amount per bag of bulk ice cream products and per pre-pack unit sold. Additionally, up to 6% is charged on ancillary items (non-Dippin’ Dots manufactured food, drink, and/or non-food approved items). These fees are due weekly, every Friday by 5:00 PM CST.
- Advertising Fund Contributions This fee depends on the quantity of ice cream products sold, with a set amount per bag for bulk ice cream and per pre-pack unit sold. Contributions also apply to ancillary items at up to 2% of the retail price.
- Additional Fees While the royalty and advertising fund contributions are outlined, there may be other fees or changes that the franchisor can introduce, such as modifications to these fees with written notice. Additionally, franchisees should be aware that Dippin’ Dots might elect to forgo certain fees and charge a continuing royalty fee not to exceed 6% of gross sales.
It’s important to stay informed about any changes to these fees and ensure the business can accommodate these ongoing expenses.
Dippin’ Dots Franchise Earnings
Unfortunately, Dippin’ Dots does not publicly disclose detailed earnings data or median gross sales, so it’s challenging to provide specific estimates for franchise earnings. However, based on industry standards and the typical performance of dessert franchises, earnings will largely depend on factors such as location, the size of the operation, and the franchisee’s management.
For a franchise like Dippin’ Dots, a well-positioned store in a high-traffic area such as a shopping mall or amusement park can generate higher sales, particularly in peak seasons.
How to Open a Dippin’ Dots Franchise
Becoming a Dippin’ Dots franchisee involves a series of steps, starting from initial inquiry to launching 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).
- Franchise Application After reviewing the information, you’ll need to complete a franchise application. This includes providing details about your background, financial standing, and why you’re interested in the franchise opportunity. Dippin’ Dots will review your application and determine if you meet their criteria.
- Discovery Day Next, you may be invited to attend a Discovery Day, where you can meet the franchisor’s team, visit the headquarters, and ask any remaining questions. This gives you the opportunity to get a deeper understanding of the brand and what’s involved in running a franchise.
- Signing the Franchise Agreement If you decide to proceed, you’ll sign the franchise agreement. This formalizes your commitment to becoming a franchisee and outlines the terms of your relationship with Dippin’ Dots, including fees, royalties, and operational guidelines.
- Training and Support After signing the agreement, you will begin training. Dippin’ Dots provides comprehensive training that covers the product, operations, marketing, and customer service. This prepares you for managing the day-to-day operations of your location.
- Site Selection and Build-out Once your training is complete, you will work with the franchisor’s team to select a suitable location for your franchise. Dippin’ Dots provides guidance on site selection, lease negotiation, and the build-out process to ensure your location meets their standards.
- Opening Operations After your location is ready, you’ll receive support to launch your franchise. This includes setting up inventory, staffing, marketing, and grand opening promotions. Once everything is in place, you can officially open your Dippin’ Dots location and begin operations.
Pros & Cons
Pros
Unique Product Offering: Dippin’ Dots is known for its innovative, flash-frozen ice cream, which offers a fun, interactive experience that differentiates it from traditional ice cream vendors. This can attract a wide variety of customers, particularly in high-traffic entertainment venues like amusement parks and malls.
Established Brand: With over 100 locations in the U.S. and an international presence, Dippin’ Dots is a recognized and trusted brand. Its “ice cream of the future” image gives it a unique position in the dessert industry, creating a strong foundation for attracting customers.
Flexible Business Model: Dippin’ Dots offers flexibility in how you can operate the franchise. With mobile units and kiosks available, you have the option to reach different customer segments, including seasonal or event-based markets, expanding your potential customer base.
Cons
Dependence on Seasonal Traffic: Many Dippin’ Dots locations are in high-traffic areas like amusement parks and sporting arenas, which can make sales highly seasonal. Your business could experience fluctuations in revenue based on time of year, weather, and event schedules, leading to potential instability.
Limited Financial Transparency: Dippin’ Dots does not provide detailed financial data or median gross sales in their Franchise Disclosure Document (FDD), making it difficult to assess potential earnings accurately. This lack of transparency can make it harder to predict profitability.
Intense Competition: While Dippin’ Dots has a unique product, it still faces significant competition from other dessert brands, including traditional ice cream vendors, frozen yogurt shops, and newer dessert trends. Maintaining a competitive edge in a crowded market could require additional marketing efforts and innovative offerings.
