Baskin Robbins Franchise Cost Too High For Franchise Profits



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.

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

Visit the franchise profile on Vetted Biz: https://www.vettedbiz.com/baskin-robbins-franchise/

Want to speak with a franchise specialist about Baskin Robbins or another franchise? Click here: https://share.hsforms.com/1ZtNM19w4R8WIXyNa_97N7w4e0xw

00:00 Introduction
00:42 Franchise Fee, Investment Range, On-Going Royalty & Advertising Fee
01:05 Requirements To Be A Baskin Robin Franchise
01:41 Time to Recoup Investment
02:18 Locations
03:04 Conclusion

#BaskinRobbinsFranchise #BaskinRobbinsFranchiseCostTooHighForFranchiseProfits #VettedBiz

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.

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

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:

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

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.

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.

The number of franchises has 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 a 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.

Visit the franchise profile on Vetted Biz: https://www.vettedbiz.com/baskin-robbins-franchise/

Want to speak with a franchise specialist about Baskin Robbins or another franchise? Click here: https://share.hsforms.com/1ZtNM19w4R8WIXyNa_97N7w4e0xw

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