Franchise Costs: Detailed Estimates of Baskin-Robbins Franchise Costs (2020 FDD)

Updated July 5, 2020.

Detailed Estimates of Baskin-Robbins Franchise Costs Based on Item 7 (Estimated Initial Investment) of Baskin-Robbins’ 2020 Franchise Disclosure Document

1.  Initial Franchise Fee (20-year term):  $12,500 to $25,000

2.  Real Estate Development:  $15,000 to $211,600

• Real estate/space development costs vary considerably according to the type of Restaurant, real estate values in your area, your real estate interest (leasehold or ownership), location, size of site, code requirements, and other factors, including labor, as well as whether you, your landlord, or the franchisor develops the Restaurant. Depending upon how your deal is structured, you may pay some or all of the actual cost.

• Your initial investment may be significantly lower if the franchisor or your landlord develops the location, but in that case, your monthly rent will probably be higher. Your rent will likely be based on development costs and reflect a rate of return on the landlord’s initial investment, as well as other factors.

• Commercial leases are typically “triple net” leases, requiring you to pay rent, all taxes, insurance, maintenance, repairs, common area maintenance costs, merchants’ association fees, and all other costs associated with the property. You may also have to pay percentage rent.

• Costs to develop the land, building, and other site improvements include architectural, engineering and legal fees, exterior landscaping, electrical and water hookup, paving, sidewalks, lighting, etc. Some local governments may charge an additional amount for utility connections to offset their costs for maintaining water and sewer plants; these amounts are not included in the above figure.

• The low end of the range above is the estimated cost for you to negotiate a build-to-suit lease in which the landlord incurs most development costs, and you make a lease deposit. The high end of the range above assumes the most typical deal for the upper range for this brand, leasehold improvements within a landlord’s building.

• If you elect to buy land, it can cost an additional $100,000 to $1,200,000 (and more). If you elect to build a freestanding building on leased land, it can cost from $200,000 to $300,000 more.

• These estimates are based on the franchisor’s experience and information provided by construction managers and franchisees.

• Additional development costs include, among others, architectural, engineering, and legal fees. These estimates do not include extraordinary costs due to extensive redesign, permitting, variances, environmental issues, legal obstacles, bringing utilities to space, excessive permit fees, etc. In addition, if you are planning to add a drive-thru, your costs will increase.

3.  Equipment, Fixtures, and Signs:  $37,035 to $230,000

• This amount includes estimated costs of furnishings, installations, equipment, trade fixtures, smallwares, and certain other items on the Restaurant premises, the amount and specific items of which will vary depending upon the location, size, and condition of a particular Restaurant.

• Cost ranges include tax and delivery estimated at 10%.

4.  Restaurant Technology System:  $2,050 to $11,200

• The price ranges reflect minimum to maximum for equipment configurations and solution costs, site preparation, and installation for one to two POS systems. You may need additional POS systems depending on the size and configuration of your Restaurant. If your Restaurant has a drive-thru, you can expect to purchase additional equipment.

• Please note that in addition to the cost of the POS equipment, you will be required to pay monthly and/or yearly maintenance and user fees.

5.  Licenses, Permits, Fees, and Deposits:  $2,000 to $5,500

• The ranges do not include government imposed “impact fees.” The franchisor estimates such fees, when imposed, can be $87,000 or more in some markets. Some local governments may also require a performance bond, which is not included in the above range.

6.  Opening Inventory:  $5,000 to $8,000

• Your initial inventory of merchandise and supplies needed for the operation of the Restaurant will include ice cream, soft serve ice cream, frozen yogurt, cakes, and other products for resale; containers and other paper, plastic, or similar goods; fountain supplies (cones, fruits, toppings, syrups, etc.); dry ice; maintenance and cleaning materials; office supplies; and miscellaneous materials and supplies.

7.  Miscellaneous Opening Costs:  $9,500 to $28,000

• Miscellaneous opening costs include pre-opening franchisee employee training payroll, utility deposits, petty cash, and miscellaneous expenses (e.g. interior landscaping plants, sound system, office supplies, licenses and permits, banking pre-opening costs, etc.).

8.  Uniforms:  $400 to $800

9.  Insurance:  $3,500 to $8,300

• You must provide commercial general liability coverage with minimum limits in the amount of $2,000,000 per occurrence, employment practices liability coverage with minimum limits in the amount of $1,000,000 per occurrence, all risk property coverage, plate-glass coverage, and employers’ liability and workers’ compensation insurance, in accordance with the franchisor’s published standards.

10.  Travel and Living Expenses While Training:  $1,000 to $9,000

• The franchisor pays the cost of the initial training program for a new Restaurant. However, you must pay for training materials, including the cost of the sanitation exam (if applicable to your area), uniforms, accommodations, wages, and travel expenses, if any, for you and your employees.

• If you attend the initial training program in a location other than one of the franchisor’s training facilities, then you may be charged certain additional costs such as travel and related expenses for the trainers, your portion of the costs for the meeting room, and such other costs as may reasonably be incurred.

• You must also pay for training programs conducted during the term of your Franchise Agreement if the franchisor believes such training is needed.

• The above estimated ranges of costs are for one person to attend the Baskin-Robbins initial training program for three weeks, including transportation, food, and lodging.

• There may also be additional training time needed to achieve required competency levels. The amount of time required is a function of the individual’s ability to personally demonstrate the competencies. This may increase your cost for travel, hotels, and meals for you and/or your designated representative.

• If you live close to the training facility, your costs may be on the lower end of the range.

• Any wages or salaries that you may pay trainees while they attend training are not included in these estimates. You must also maintain worker’s compensation insurance coverage for trainees in your employ.

• You must pay a $100 cancellation fee per individual per class per day if you cancel a scheduled class with less than a week’s notice. All cancellation fees must be paid in full before a network’s learner can register for any future classes.

11.  Marketing Start-Up Fee:  $3,000 to $5,000

• Marketing Start-Up fees are used to promote the opening, remodeling, transferring, or relocating of your Restaurant, and are applicable for new, remodeled, relocated, or transferred Restaurants and when a brand is added to an existing Restaurant.

12.  Additional Funds for First 3 Months of Operation:  $0 to $52,500

• You may or may not need working capital to support ongoing expenses that are not covered by sales revenue. New businesses may generate negative cash flow. These figures are estimates and the franchisor cannot guarantee that you will not have additional expenses in the first three months of operation.

13.  Totals:  $123,952 to $558,830