Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

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Franchise Costs: Detailed Estimates of Baskin-Robbins Franchise Costs (2016 FDD)

by Franchise Chatter on June 19, 2016

in Franchise Costs, Frozen Dessert Franchise, Ice Cream Franchise

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Baskin Robbins Interior

Detailed Estimates of Baskin-Robbins Franchise Costs Based on Item 7 (Estimated Initial Investment) of Baskin-Robbins’ 2016 Franchise Disclosure Document

1.  Initial Franchise Fee:  $12,500 to $25,000

2.  Real Estate Development:  $11,000 to $122,000

  • Real estate/space development costs vary considerably according to the type of Restaurant, fair market values in your area, local building and health code requirements, your real estate interest (leasehold or ownership), location, and whether you, your landlord, or the franchisor develops the Restaurant.
  • Your initial investment may be significantly lower if the franchisor or your landlord develops the location, but in that case, your annual rent will probably be higher.
  • 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 free standing building on leased land, it can cost from $200,000 to $300,000 more.

3.  Equipment, Trade Fixtures, and Signs:  $33,000 to $128,000

  • This amount includes estimated costs of furniture, furnishings, installations, equipment, trade fixtures, small-wares, 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 range includes tax and delivery estimated at 10%.

4.  Electronic Cash Register / Retail Technology System:  $10,950 to $13,600

  • The price range reflects equipment configurations and solution costs for one to two point of sale systems. If your Restaurant has a drive-thru, you can expect to purchase additional equipment.
  • Please note that in addition to the cost of the point of sale 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 above does 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.
  • For a sample set of 7 stores built by franchisees between January 2013 and December 2015 in Baskin-Robbins’ current Flavors 1.0 building design, the franchisees reported an average Build Cost of $173,500. Build Costs are defined as the sum of Real Estate Development; Equipment, Trade Fixtures, and Signs; Electronic Cash Register/Retail Technology System; and Licenses, Permits, Fees, and Deposits.

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

  • Your initial inventory of merchandise and supplies needed for the operation of the Restaurant may 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:  $12,000 to $27,000

  • Miscellaneous opening costs include pre-opening employee training payroll, utility deposits, petty cash, and miscellaneous expenses (e.g. sanitation books, interior landscaping plants, sound system, office supplies, licenses and permits, banking pre-opening costs, public telephone deposit, 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 above estimated range of costs is for one person to attend the Baskin-Robbins initial training program for 3 weeks, including transportation, food, and lodging.
  • Any wages or salaries that you may pay trainees while they attend training are not included in these estimates. You must also maintain workers’ compensation insurance coverage for trainees in your employ.

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 Restaurants and when a brand is added to an existing Restaurant.

12.  Additional Funds for First 3 Months of Operation:  $0 to $50,000

  • 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:  $94,350 to $402,200

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