Published on 9 Apr 2021 Time 7 min read Last update by 25 Jan 2024

Paciugo Franchise Review (2024) 

gelato

Paciugo is an Italian gelato store that opened with the idea of brining silky smooth, irresistibly delicious gelato served in an environment that felt uniquely Italian. The founder Ugo Ginatta wanted to create something no one would be able to resist. And he wanted to do it better than anyone. Paciugo is the realization of his lifelong passion. In 1999 armed with a secret family gelato recipe, he moved to America and opened the first Paciugo store.

Their menu includes not only 300 gelato recipes that rotate seasonally, but also smoothies, shakes and specialty coffee.

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Management Team

The company Paciugo was founded by Ugo Ginatta and his wife Cristiana in April 2000, in Dallas, TX. They have imported Italian ingredients, machinery and techniques from their native Italy to duplicate the fourth-generation recipes from their home cities of Turin and Milan, respectively. Ugo’s son, Vincent, joined the company at the end of 2000 upon graduating in mechanical engineering. 

Since 2000, Paciugo cafes have been delighting guests with a tremendous variety of high-quality and unique menu items. Every morning, each Paciugo cafe freshly prepares its gelato, serving 30 to 38 flavors daily.

Currently, there are 35 Paciugo retail locations in the greater Dallas area, and many more cafes throughout the USA, for a total of 67 locations, including the US Virgin Islands.

Franchise Dessert Industry Analysis

Franchise Strengths

  • Artisanal, high quality gelato
  • Operationally simple, easy to learn
  • Franchisor provides training and support with suppliers and opening the store
  • Strong leadership team based in TX committed to helping franchisees grow their markets

Weaknesses

  • Success of business is highly dependent on location of the store
  • Sales impacted by weather (i.e. cloudy days)
  • Americans are still unfamiliar with gelato

Dessert Industry Franchise Opportunities 

  • Ability to adapt and grow with an emerging franchisor in an under-penetrated market
  • The gelato market is small (800 outlets) in the U.S. compared to Italy (~150,000 outlets)
  • Gelato is a low-fat and low calorie dessert
  • 90% of Americans eat ice cream regularly (CISION)

Threats in the Dessert Industry Market

  • Profitability can be negatively impacted by close location of like competitors (frozen yogurt and ice cream)
  •  Potential for gelato to not catch on with the American masses 
  • Ingredients like Pistachio and Hazelnut could become more expensive over time
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How Much is a Paciugo Franchise? 

Paciugo Franchise cost ranges from $127,060 to $268,940 according to the 2020 FDD.

How Much does a Paciugo Franchise make?

Initial Investment – Gelato Caffé Unit

Item Estimated Amount (in USD) To Whom Payment is to Be Made
Low High
Initial Franchise Fee $15.000 $20.000 Franchisor
Initial Application and Document Preparation Fee $250 $750 Franchisor
Site Selection Assistance $0 $1.000 Franchisor
First Month’s Rent and Security Deposit $2.000 $10.000 Lessor
Store Design Consulting Services $500 $1.500 Approved Suppliers
Leasehold Improvements $73.000 $186.000 Contractors
Furniture, Fixtures, Equipment, and Signage $115.000 $171.000 Approved Suppliers
Initial Training Costs $500 $4.000 Employees and Approved Suppliers
Pre-Opening Consultation $0 $1.000 Franchisor
Initial Inventory and Supplies $8.000 $10.000 Approved Suppliers
Computer Hardware and Software $4.000 $12.000 Approved Suppliers
Professional Services $1.200 $4.000 Accountants, lawyers, etc.
Opening Assistance Costs $0 $5.000 Franchisor
Opening Advertising Expenses $3.500 $10.000 Approved Suppliers
Insurance $250 $3.000 Insurance Broker
Additional Funds for first 3 Months $25.000 $50.000
TOTAL $248,200 $489,250
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Gelato Caffé Kiosk Unit

Item Estimated Amount (in USD) When Due To Whom Payment is to Be Made
Low High
Initial Franchise Fee $15.000 $20.000 Upon signing Franchise Agreement Franchisor
Initial Application and Document Preparation Fee $250 $750 As arranged Franchisor
Site Selection Assistance $0 $1.000 As arranged Franchisor
First Month’s Rent and Security Deposit $2.000 $10.000 As arranged Lessor
Design Services, Leasehold Improvements;  Furniture, Fixtures, Equipment; and Signage $68.000 $192.000 As arranged Approved Suppliers
Initial Inventory and Supplies $5.000 $5.500 As incurred Approved Suppliers
Initial Training Costs $500 $4.000 As arranged Employees and Approved Suppliers
Pre-Opening Consultation $0 $1.000 As arranged Franchisor
Opening Assistance Costs $0 $5.000 As arranged Franchisor
Computer Hardware and Software $4.000 $12.000 As arranged Approved Suppliers
Professional Services $1.200 $4.000 As arranged Accountants, Lawyers, etc.
Opening Advertising Expenses $3.500 $10.000 As arranged Approved Suppliers
Insurance $250 $3.000 As arranged Insurance Broker
Additional Funds for first 3 Months $25.000 $50.000
TOTAL $124,700 $318,250
Royalty Ad-Fund
6% 2%
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Store/ Location Type (# of Stores)  Average Gross Sales Median Gross Sales  High/ Low Actual Gross Sales
Inline Stores (16) $334.451 $275.646 $968,186 / $156,251
Mall Stores (7) $459.681 $378.017 $923,108 / $329,316
Kiosks (6) $264.047 $257.517 $366,634 / $162,077
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Store/ Location Type (# of Stores)  Average Annual Net Sales Average Cost of Goods Sold Average Labor Costs
Inline Stores (6) $309,414 (3 of 6 Stores, or 50%, Above Average) Median: $321,485 23.5% (2 of 6, or 33%, Above Aerage) Median: 24.3% 27.8% (3 of 6, or 50%, Above Aerage) Median: 27.8%
Mall Stores (8) $426,568 (2 of 8 Stores, or 25%, Above Average) Median: $359,999 23.8% (2 of 7, or 29%, Above Aerage) Median: 24.0% 22.5% (5 of 8, or 63%, Above Aerage) Median: 22.0%
Kiosks (3) $281,746 (1 of 3 Stores, or 33%, Above Average) Median: $261,565 26.7% (1 of 3 or 33%, Above Aerage) Median: 30.3% 25.7% (1 of 3 or 33%, Above Aerage) Median: 27.0%

Historical Revenue for Paciugo Franchise FDD Disclaimer:

“There was one company-owned Store and 31 franchised Stores in operation as of December 31, 2018. The one company-owned Store is not included as part of this financial performance representation. The chart below reflects historical Gross Sales information for the 29 franchised Stores (“Reporting Stores”) that had been open and operating for at least the full 12-month period ending December 31, 2018 (“Reporting Period”). Kiosks are separate from Stores, and the information for Stores is categorized by the type of location.

The amounts below are annual amounts for the entire Reporting Period. This information has not been audited or otherwise verified by us. ”Notes: Inline Stores: Of the 16 Inline Stores, 7 or 43% met or exceeded the amount of average Gross Sales.Mall Stores: Of the 7 Mall Stores, 2 or 29% met or exceeded the amount of average Gross Sales.Kiosks: Of the 6 Kiosks, 2 or 33% met or exceeded the amount of average Gross Sales.

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As provided by Paciugo item 19 2019 FDD

1- “The cost information below is provided by 17 of the Reporting Stores for the Reporting Period. We obtained this information from profit and loss statements submitted by franchisees and from point of sale and key vendor reports, where available. The Reporting Stores do not include the 12 Reporting Stores that did not submit data. This information has not been audited or otherwise verified by us.”Notes:

2- “Net Sales” is defined as Gross Sales minus complimentary meals, the face value of coupons or other promotional discounts, and voided sales. The high amount of Net Sales for Inline Category was $409,698, and the low amount was $171,695. The high amount of Net Sales for Mall Category was $911,379, and the low amount was $238,253. And the high amount of Net Sales for Kiosk Category was $364,004, and the low amount was $219,671.

3- The cost of goods sold amount includes the cost of all food, beverage, paper, and packaging used to sell products. It does not include the cost of items used to otherwise operate the Store, such as utilities, repair and maintenance, and cleaning and office supplies. The COGS is calculated as a percentage of the average weekly Net Sales amount for each corresponding category. The high amount of Cost of Goods Sold for Inline Category was 27.3%, and the low amount was 18.6%. The high amount of Cost of Goods Sold for Mall Category was 28.3%, and the low amount was 16.8%. And the high amount of Cost of Goods Sold for Kiosk Category was 33.0%, and the low amount was 16.6%.

4- The labor amount may include all labor costs for hourly and salaried Store employees, such as wages, taxes, benefits, workers’ compensation costs, and payroll processing expenses. The labor cost is calculated as a percentage of the average weekly Net Sales amount for each corresponding category. The high amount of Labor Costs for Inline Category was 32.0%, and the low amount was 21.9%. The high amount of Labor Costs for Mall Category was 28.0%, and the low amount was 19%. And the high amount of Labor Costs for Kiosk Category was 27.9%, and the low amount was 22.1%.

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