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FDD Talk 2015: The Haagen-Dazs Franchise Opportunity (Financial Performance Analysis, Estimated Costs, and Other Important Stuff You Need to Know)

by Franchise Chatter on October 26, 2015

in FDD Talk 2017: Food Franchises, Franchise Earnings, Frozen Dessert Franchise, Ice Cream Franchise

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Haagen-Dazs Exterior

In this FDD Talk 2015 post, you’ll learn the following:

  • Section I – Background information on the Haagen-Dazs franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a Haagen-Dazs franchise, based on Item 7 of the company’s 2015 FDD
  • Section III – Presentation and analysis of Haagen-Dazs’s financial performance representations, based on Item 19 of the company’s 2015 FDD, including information on the:
  • 2014 average gross sales for the 178 traditional Haagen-Dazs Shops that:  (1) were in operation during all of the 2014 calendar year; and (2) with respect to which the franchisor received sales information for all of the 2014 calendar year
  • number and percentage of traditional Haagen-Dazs Shops in the sample that generated 2014 sales of over $1 million; from $900,001 to $1 million; from $800,001 to $900,000; from $700,001 to $800,000; from $600,001 to $700,000; from $500,001 to $600,000; from $400,001 to $500,000; from $300,001 to $400,000; from $200,001 to $300,000; and less than $200,000, respectively

Section I – Background Information

The idea for Haagen-Dazs actually dates all the way back to the early 1920s. A young man by the name of Reuben Mattus decided to channel his entrepreneurial drive into creating the finest ice cream possible. His mother already had an ice cream business in which he worked, selling their products out of a horse-drawn wagon on the busy streets of the Bronx, New York. As the family business grew during the next several decades, Mattus always insisted on using the finest of ingredients.

It was in 1960 that Mattus and his wife, Rose, decided to launch a new company. They chose Haagen-Dazs for its name in order to convey the idea of old-world traditions and craftsmanship. At first, the company focused on just three flavors: vanilla, chocolate, and coffee. After perfecting those, Mattus became quite creative with his recipes, and customers quickly developed deep loyalty to the brand, and all through word-of-mouth advertising.

By 1973, the brand was available throughout the USA. But it wasn’t until 1976 when daughter Doris opened the first independent Haagen-Dazs shop. The idea took off and spread rapidly. In 1983 the chain was sold to The Pillsbury Company, which promised to keep up the high standards. Pillsbury was in turn purchased by General Mills in 2001, who licenses the brand to Nestlé, who actually makes the products through one of its subsidiaries. The brand is now known around the world as the ultimate super-premium ice cream.

The number of US locations has declined since 2011, when it had 251, to its current 208 stores. Its distribution through grocery stores, however, is much wider, and includes more than 50 countries.

Here’s how Haagen-Dazs keeps the sweet tooth satisfied in the ice cream market:

Frozen Treats

Over the years, Haagen-Dazs has expanded its offerings to include the first ice cream bars for adults (introduced in 1986), frozen yogurt (introduced in 1991), and sorbet (introduced in 1993).

Fresh Flavors

Haagen-Dazs doesn’t take the introduction of new flavors lightly. It has to be just right to make it into the line-up. Among its 24 distinctive classic flavors are vanilla swiss almond, butter pecan, dulce de leche, pralines and cream, rum raisin, and white chocolate raspberry truffle.

Its newest lineup, the Artisan Collection, includes such temptations as applewood smoked caramel almond, chocolate caramelized oat, ginger molasses cookie, spiced pecan turtle, and tres leches brigadeiro.

Flexible Options

Haagen-Dazs shops can come in three varieties. Inside malls and lifestyle centers, the footprint can vary from 500 to 1,200 square feet, while street-front shops tend to span anywhere from 800 to 1,200 square feet. There is also a kiosk option, however, that only takes up 175 to 200 square feet.

Free Cone Day

The chain has made Free Cone Day an annual tradition on May 12. At participating locations, customers can come into the store between 4pm and 8pm and get a free kiddie-sized cone of ice cream, sorbet, or gelato.

Haagen-Dazs often uses Free Cone Day as a vehicle to promote the introduction of one or two new flavors.

Section II – Estimated Costs

  • Please click here for detailed estimates of Haagen-Dazs franchise costs, based on Item 7 of the company’s 2015 FDD (updated).

Section III – Financial Performance Representations (Item 19, 2015 FDD) and Analysis

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