Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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Franchise Costs: Detailed Estimates of Dippin’ Dots Franchise Costs (2014 FDD)

by Franchise Chatter on July 20, 2014

in Franchise Costs, Frozen Dessert Franchise

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Dippin' Dots Photo by newwavegurly

Detailed Estimates of Dippin’ Dots Franchise Costs Based on Item 7 (Estimated Initial Investment) of Dippin’ Dots’ 2014 Franchise Disclosure Document

1.  Initial Franchise Fee:  $15,000

2.  Grand Opening Advertising Materials Expenditure:  $500 to $2,500

  • Grand opening activities vary greatly based upon the location you select and the local rates for services selected (for example, printing and advertising). Dippin’ Dots requires you to spend a minimum of $500 on Grand Opening Advertising. However, you may spend more.

3.  Credit Card and Gift Card Processing:  $755 to $800

  • You agree to enter into an agreement with an approved supplier for the ability to conduct credit card and gift transactions at your store. You also agree to enter into an agreement to sell and accept Dippin’ Dots gift cards through DDF.
  • As part of this Agreement, you may be required to purchased card-reading equipment at an estimated cost of $755. After that, you will be responsible for a fee on card transactions that will be deducted by ACH Debit pursuant to the Agreement with the approved supplier.

4.  Office and Retail Supplies:  $100 to $500

  • You agree to the importance of image and agree to use only the supplies Dippin’ Dots specifies or approves. Dippin’ Dots will only allow office and retail supplies that support the image of the System in the marketplace. Supplies of this nature include the format, type, decoration, and style as they relate to retail and office supplies.
  • These costs are based on Dippin’ Dots’ estimate of the initial supplies.

5.  Opening Inventory:  $2,500 to $5,250

  • Minimum inventory will fluctuate because of seasonal sales. This may cause the initial inventory investment to be greater or less.
  • Dippin’ Dots retains the right to change the minimum and maximum levels in response to changing market conditions. The franchisor will work with you to organize and balance inventories.

6.  Insurance:  $1,500 to $2,500

  • You will be required to purchase insurance prior to the opening of your Franchised Business in the types of coverages and amounts specified in the Franchise Agreement. Because of price fluctuations between different insurance carriers, you should obtain quotes from carriers of choice before proceeding.

7.  Printing and Signage:  $499 to $5,000

  • Dippin’ Dots will specify the outdoor and indoor signs and graphics, and only those that it approves are permitted to be used.
  • You, at your expense, will prepare, construct, and erect the signs and graphics in accordance with any requirements of governmental authorities and the landlord. The costs of fabricating and installing approved signs and graphics can vary depending upon local market conditions.

8.  Equipment (Freezers, etc.):  $65,700 to $84,900

  • You will be required to purchase and/or lease and install the office/kitchen equipment necessary to operate your Franchised Business in accordance with Dippin Dots’ then-current trade dress specifications.
  • You will be required to purchase the freezers necessary to operate your Franchised Business. This estimate will not only cover an initial order of 40 route delivery freezers, 5 storage freezers, a tent, and a serving freezer with shipping, but it will also cover the cost of equipment for either a kiosk or a store as well.
  • You can expect initial cash outlays to be lower if the items can be leased rather than purchased or if any compatible items are included with the lease for the Premises.

9.  Leased Warehouse and Cold Storage:  $5,000 to $20,000

  • You will be responsible for leasing warehouse space to store Dippin’ Dots Products you order for your Franchised Business.

10.  20 Ft. Box Truck Monthly Payments to Lease or Own:  $1,000 to $2,000

  • You will be responsible for purchasing or leasing a truck to service your accounts in your territory. Monthly costs will vary depending on size, type, and age of the truck.

11.  Travel, Lodging, Meals, Etc. for Initial Training:  $1,500 to $2,500

  • You will be responsible for all out-of-pocket expenses, workers’ compensation insurance, and all employee compensation along with federal and state taxes for the trainees plus a Training Fee of $75 per day per person for any additional training beyond the requirements of Basic Management Training.
  • The typical costs of training that you will bear are the Training Fee, transportation, lodging, compensation, and meals. The estimate is for items that are non-discretionary in nature.

12.  Real Estate and Improvements:  $2,400 to $120,000

  • For the first year of your investment in the Franchised Business, rent is estimated to range from $2,400 to $120,000 for the leased location, which will depend on numerous factors. More specifically, the lease range for kiosks is estimated to be from $2,400 to $90,000 and the range for an in-line fixed location store is estimated to be from $14,400 to $120,000.

13.  Security Deposit and Prepaid Rent:  $500 to $10,000

  • You will be required to pay rent, and may be required to pay a security deposit at the beginning of your lease or license agreement with the landlord or operator.

14.  Miscellaneous Start-up Costs:  $12,500 to $32,500

  • Miscellaneous expenses include:  leasehold improvements; incorporation fees, fictitious name registration, legal review and other professional fees; rental deposits; licenses and permits; attorneys fees; and point-of-sale system.

15.  Additional Funds (6 months):  $10,250 to $63,500

  • These additional funds should be sufficient to keep the Dippin’ Dots Franchise in operation for 6 months and capable of covering the excess of expenses over cash flow from the store, covering employee salaries and taxes, inventory replenishment, insurance premiums, rent, utilities, and other normal expenses that are associated with the day-to-day business operation of the Franchise.
  • The additional funds estimate does not include any payments to you during the start-up period.
  • In preparing this estimate for additional funds needed for the operation of a Dippin’ Dots franchise, the franchisor relied on its institutional experience gained from the sale of hundreds of Dippin’ Dots franchises over the past 14 years.

16.  Totals:  $119,704 to $366,950

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