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FDD Talk 2016: The Baskin-Robbins Franchise Opportunity (Financial Performance Analysis, Estimated Costs, and Other Important Stuff You Need to Know)

by Franchise Chatter on November 14, 2016

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

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Baskin Robbins Interior

In this FDD Talk 2016 post, you’ll learn the following:

  • Section I – Background information on the Baskin-Robbins franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a Baskin-Robbins franchise, based on Item 7 of the company’s 2016 FDD
  • Section III – Presentation and analysis of Baskin-Robbins’ financial performance representations, based on Item 19 of the company’s 2016 FDD, including information on the:
  • average sales by geographic region for continental U.S. Baskin-Robbins single brand restaurants that have been open for business to the public for at least one year during a one-year measuring period from October 26, 2014 to October 24, 2015
  • average sales by geographic region for continental U.S. Dunkin’ Donuts/Baskin-Robbins multi-brand restaurants in freestanding and shopping center/storefront locations (separately stated) that have been open for business to the public for at least one year during a one-year measuring period from October 26, 2014 to October 24, 2015
  • average cost of goods sold and labor costs by region for continental U.S. Baskin-Robbins restaurants (and separately, for Dunkin’ Donuts/Baskin-Robbins multi-brand restaurants) for the period from November 1, 2014 to October 31, 2015

Section I – Background Information

Baskin-Robbins has been around since 1945. Irv Robbins had previously managed an ice cream shop in Tacoma, Washington, when he was a teenager in the 1930s, but was bored with serving up traditional flavors. He shook things up by mixing in candy and fruit. But his ice cream dream had to be put on hold while he served in WWII.

It was after that when he bought his own shop in Glendale, California, called Snowbird Ice Cream. Three years later, in 1948, he invited his brother-in-law Burt Baskin (who had his own ice cream parlor called Burton’s Ice Cream Shop) to join the business. In 1953, they decided to formally merge their efforts, flipping a coin to see whose name would go first on the ice cream chain they were developing together, and Baskin-Robbins was born.

Together, they’ve developed over 1,000 different ice cream flavors, although for a long time the famous “31 flavors” was the number being served at any given time so customers could have a different flavor each day of the month.

They’ve also managed to build the world’s largest chain of specialty ice cream shops. The number of locations has grown in recent years and currently stands at 7,607 (10 company-owned; 2,493 franchised units in the U.S.; 5,104 in nearly 50 other counties).

Now headquartered in Canton, Massachusetts, and part of the Dunkin’ Brands Group (itself owned by a triumvirate of private equity companies), here’s how Baskin-Robbins continues to keep things cool after more than 70 years:

Try Before You Buy

One of the interesting things about Burt and Irv was that from the beginning they believed strongly that people should have a chance to sample different flavors before deciding which one to buy. That’s a practice that continues to this day with their famous little pink spoons.

Expanding Reach

In 2014, Baskin-Robbins made the big move to start selling its branded ice cream in supermarkets. It’s a smart move for a brand that has been struggling since the turn of the millennium. It allows the company to get its product in the hands of consumers who don’t live anywhere near one of its shops, and also raises brand awareness for those not familiar with it.

Healthy Ice Cream?

Among today’s increasingly health-conscious consumers, can an ice cream shop really survive? Well, you have to give the chain credit for trying to do something to seem healthier. In 2008, it launched “BRight Choices” to offer healthier choices via a full menu of “better-for-you” frozen treats. It has also removed all trans fats from its ice cream.

The Original 31

Ever wonder what the original 31 flavors were back in the 40s and 50s? Here they are: Banana Nut Fudge, Black Walnut, Burgundy Cherry, Butterscotch Ribbon, Cherry Macaroon, Chocolate, Chocolate Almond, Chocolate Chip, Chocolate Fudge, Chocolate Mint, Chocolate Ribbon, Coffee, Coffee Candy, Date Nut, Egg Nog, French Vanilla, Green Mint Stick, Lemon Crisp, Lemon Custard, Lemon Sherbet, Maple Nut, Orange Sherbet, Peach, Peppermint Fudge Ribbon, Peppermint Stick, Pineapple Sherbet, Raspberry Sherbet, Rocky Road, Strawberry, Vanilla, and Vanilla Burnt Almond.

Section II – Estimated Costs

  • Please click here for detailed estimates of Baskin-Robbins franchise costs, based on Item 7 of the company’s 2016 FDD.

Section III – Financial Performance Representations (Item 19, 2016 FDD) and Analysis

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