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Earnings Claims of Top Franchises Revealed

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Franchise Costs: Detailed Estimates of Ben & Jerry’s Franchise Costs (2015 FDD)

by Franchise Chatter on February 27, 2014

in Franchise Costs, Frozen Dessert Franchise

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Ben & Jerry's Photo by saschmitz_earthlink_net

This post was updated on March 2, 2016 to reflect information from Ben & Jerry’s 2015 FDD (Item 7).

Detailed Estimates of Ben & Jerry’s Franchise Costs Based on Item 7 (Estimated Initial Investment) of Ben & Jerry’s 2015 Franchise Disclosure Document

For Full-Sized Shops (approximately 750 to 1,200 square feet)

1.  Preliminary Agreement Deposit:  $18,500

2.  Initial Franchise Fee:  $18,500 to $37,000 ($18,500, if applicable, will be credited from the Deposit)

  • If you have paid a Deposit, it will be applied toward the initial franchise fee due for your type of Shop upon signing the Franchise Agreement.
  • You will not sign the Franchise Agreement and pay the initial franchise fee until a site has been authorized.

3.  Plans, Development, and Permits:  $3,500 to $12,000

  • You must pay a design firm to prepare layout, dimensions, and preliminary drawings and to prepare final plans for construction based upon the standardized design and specifications that the franchisor provides.
  • As of the date of the Disclosure Document, the franchisor has one designated “system design firm” that you may use for the designs, specifications, and services for your location.  You may use a local design firm so long as the local design firm meets the franchisor’s qualifications.
  • Costs listed are average based on completing design work for a standard vanilla shell; sites not brought to vanilla shell basic standards will incur additional expenses.

4.  Leasehold Improvements and Construction:  $80,000 to $200,000

  • These costs are based on an estimated range of approximately $100 to $135 per square foot for each Shop. Costs may be significantly higher in certain areas such as New York, Los Angeles, and others, as well as tourist areas and coastal regions.

5.  Furniture, Fixtures, Equipment, Casework, and Smallwares:  $65,000 to $125,000

  • You must purchase certain items of equipment, including smallwares, fixtures, furniture, and trade dress, in order to open and operate the Shop as required by the franchisor’s specifications.

6.  Signage:  $5,000 to $15,000

  • The location of some shops may require additional signs and design work that may increase costs beyond the estimate in this category. Also, some franchisees may request additional signage that may increase the costs beyond the estimate in this category.

7.  Professional Fees:  $3,000 to $6,000

  • You should review the lease, Franchise Agreement, and a business plan with an attorney, accountant, and/or other consultants.

8.  POS, Internet Connectivity, and Telephone:  $4,600 to $5,300

  • You are required to purchase a Ben & Jerry’s approved point-of-sale system (“POS System”) and enter into a purchasing contract for the system hardware, software, staging, integrated credit card, help desk, and hardware warranty.

9.  Deposits:  $3,000 to $8,000

  • The estimate is for certain deposits required by landlords, utilities, and other vendors.

10.  Initial Training:  $1,000 to $3,000

  • The training costs estimated are for airfare, rental car, hotel, and meals, but do not include other items such as wages or salaries.

11.  Inventory:  $8,000 to $14,000

  • You will be required to purchase sufficient inventory to open and operate the Scoop Shop under the franchisor’s specifications.

12.  Insurance:  $500 to $2,500

  • You must obtain certain types and amounts of insurance (general liability, workers’ compensation). Insurance deposits may be required by your insurance company, for your liability insurance and workers’ compensation.

13.  Grand Opening Advertising:  $3,000

  • You must conduct a Grand Opening event within 90 days of opening your Scoop Shop. You must spend an amount up to $3,000 on activities as outlined in the Grand Opening program outlined in the Operating Manual.

14.  Subtotal:  $184,100 to $430,800

  • The estimates noted above are based on the franchisor’s estimates for the size of the Shops and the product line offered at the Shops. These estimates do not include estimates for real estate purchases should you wish to purchase the property for your Shop.

15.  Additional Funds (3 months):  $55,000

  • You will need additional funds to support on-going expenses, such as payroll, rent, and utilities, to the extent that these costs are not covered by sales revenue.
  • New businesses often generate a negative cash flow. The franchisor estimates that the amount given will be sufficient to cover on-going expenses for the start-up phase of the business, which it calculates to be 3 months.

16.  Total:  $239,100 to $485,800

  • This estimate is based on the franchisor’s experience, and that of its Parent, with respect to franchised and company-owned Shops.

For In-Line Shops (approximately 450 to 650 square feet)

  • The total estimated initial investment necessary to begin operating a Ben & Jerry’s in-line shop ranges from $207,100 to $336,800.

For Kiosk Scoop Shops (approximately 100 to 200 square feet)

  • The total estimated initial investment necessary to begin operating a Ben & Jerry’s kiosk scoop shop ranges from $158,985 to $292,850.

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