In this FDD Talk 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 2019 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Baskin-Robbins franchise, based on Items 5 and 6 of the company’s 2019 FDD
- Section IV – Number of franchised and company-owned Baskin-Robbins outlets at the start of the year and the end of the year for 2016, 2017, and 2018, based on Item 20 of the company’s 2019 FDD
- Section V – Presentation and analysis of Baskin-Robbins’ financial performance representations, based on Item 19 of the company’s 2019 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 29, 2017 to October 27, 2018
- average sales by geographic region for continental U.S. combo 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 29, 2017 to October 27, 2018
- average cost of goods sold and labor costs by region for continental U.S. Baskin-Robbins restaurants (and separately, for combo restaurants) for the period from November 1, 2017 to October 31, 2018
Section I – Background Information
18 Things You Need to Know About the Baskin-Robbins Franchise
Unveils New Store Design
1. Near the end of November 2018, Baskin-Robbins unveiled its “Moments” concept store design which will give customers an entirely new and engaging experience when they visit Baskin-Robbins. The new store concept debuted in Fresno, California and the company will initiate a national rollout beginning in 2019.
2. The new store concept is designed to deliver on Baskin-Robbins’ commitment to bringing customers great flavors and memorable moments. The new store in Fresno offers the first look at the brand’s U.S. store of the future, with a new and modernized atmosphere that is designed to make it easy to connect with people over ice cream and create simple moments with family and friends that matter.
3. As part of its “Moments” store design, Baskin-Robbins is introducing a new product platform called “ice cream novelties” featuring premium, hand-dipped, and snackable frozen treats to give guests more variety when choosing a sweet treat. The new novelties collection will be available at select Baskin-Robbins locations in the upcoming months.
4. Key features of Baskin-Robbins’ “Moments” next generation store design include:
- Modern design: The special interior design features inviting and contemporary décor with bright colors to spark joy and optimism and creates an inviting environment for guests to create special moments.
- New ice cream dipping cabinets: An expanded row of modern and sleek glass cases prominently display premium ice cream flavors, ice cream cakes, and a new “novelties” collection.
- A modernized menu: A new product platform called “ice cream novelties” features premium, hand-dipped, and snackable frozen treats, including chocolate-dipped bananas, Polar Pizza slices, ice cream bars and smoothie bars, and indulgent, hand-dipped fancy waffle cones. An expanded toppings station also gives guests more variety and options for customization when choosing a sweet treat.
- Wall mural: A colorful wall mural features unique and interactive artwork to celebrate the key attributes of each local community and help create a strong connection between Baskin-Robbins and local guests. The mural also includes images that are intended for guests to engage with and share photos of on social media. The Fresno mural features local landmarks and features, including forest campsites and local parks.
- Flexible and modern seating: Indoor seating gives guests more options and features upholstered banquette and swivel chairs as well as high tables with bar stools. Outdoor seating will also be available.
- Garage door and window: A garage door and window that open to the outside and features a counter where guests can take a moment to enjoy their frozen treats.
- Upgraded digital menu boards: An entirely new digital menu board displays products in an engaging way with high-quality photos and video imagery.
5. Jason Maceda, senior vice president, Baskin-Robbins U.S. & Canada, said, “The unveiling of our next generation store is a key milestone in Baskin-Robbins’ nearly 75-year history and we’re so excited to give our guests a new and modernized experience when they visit Baskin-Robbins. Our new ‘Moments’ design represents our brand purpose – to spark joy and optimism and help guests create joyful moments with family and friends while enjoying great-tasting ice cream and amazing flavor variety. It’s the cornerstone of who we are as a brand and gives guests an entirely new way to experience Baskin-Robbins.”
6. Baskin-Robbins worked closely with WD Partners, an Ohio-based customer experience and branding agency, to bring the new “Moments” store design to life. From the initial concept to development, WD played an integral role in ensuring that the next generation store design would deliver on Baskin-Robbins’ vision to give guests an entirely new and innovative experience.
7. According to Carol Austin, vice president of marketing for Baskin-Robbins, “Many people today live busy, always-on lives which means that a chance to unplug, spend a few minutes with your friend, partner or child, reconnecting over a scoop or two of your favorite ice cream flavor really matters to people. That’s why we are so excited about the new ‘Moments’ store design – it’s intended to be an inviting place for guests to come enjoy the best ice cream on Earth and create that pure and simple moment.”
Launches Special Cone and Topping Promotion
8. At the beginning of April 2019, Baskin-Robbins announced its special cone and topping promotion for the month of April. This offer allows customers to upgrade from a plain waffle cone to a specialty cone plus one dry topping for one dollar more. Additionally, Baskin-Robbins added Sour Gummi Worms and Andes Mint pieces to its toppings bar.
9. On April 7, Baskin-Robbins had a Fancy Cone Sampling Day at participating locations from 3 p.m. to 7 p.m. Customers were able to try 1 oz. of ice cream with a waffle cone chip dipped in chocolate and decorated with rainbow sprinkles.
10. Also at the beginning of the month, Baskin-Robbins introduced its flavor of the month, OREO ‘n Caramel, which combines the classic flavors of cookies ‘n cream with caramel to create a delicious flavor featuring salty caramel ice cream, chocolate-y OREO cookie pieces, and a smooth caramel swirl.
11. Carol Austin, vice president of marketing for Baskin-Robbins, said, “In April, we’re celebrating spring with new flavor combinations and deals that will bring a smile to our guests’ faces. Our ‘Make It Amazing’ promotion and Flavor of the Month, OREO ‘n Caramel, are all about giving our guests new ways to experience their favorites at Baskin-Robbins.”
12. Baskin-Robbins was founded in 1953 by Burt Baskin and his brother-in-law Irv Robbins after the two decided to merge their respective ice cream parlors in Glendale, California. However, Baskin-Robbins says that 1945 is its founding year as this was when Robbins opened his first ice cream shop – Baskin opened his first ice cream parlor the following year. Both Baskin and Robbins had a love for old-fashioned ice cream and wanted to offer a wide variety of flavors made with high-quality ingredients.
13. As the number of stores grew, Baskin and Robbins recognized that to maintain the high standards they set in the beginning, each store would require a manager who had an ownership interest in its overall operation. Even though they didn’t realize it at the time, the two founders had pioneered the concept of franchising in the ice cream industry.
14. To facilitate the growth of their company, Baskin and Robbins purchased their first dairy production facility in Burbank, California in 1949. With the new facility, Baskin and Robbins were able to experiment with new ingredients and flavors.
15. In 1953, Baskin and Robbins’ separate ice cream shops were finally merged under the brand Baskin-Robbins Ice Cream. The new brand had a unique concept: offering a different ice cream flavor for each day of the 31 days of the month. Baskin-Robbins’ flavor library has grown to over 1,300, with flavors rotating each month.
16. Baskin-Robbins continued to grow over the next few decades and by the mid-1960s, there were over 400 locations in the United States. In the 1970s, Baskin-Robbins began opening international locations in countries like Japan, Saudi Arabia, South Korea, and Australia. Over the years, Baskin-Robbins has expanded its menu and was the first to introduce ice cream cakes to the public.
17. Today, Baskin-Robbins is owned by Dunkin’ Brands and is often co-branded with Dunkin’ (formerly Dunkin’ Donuts) stores. Baskin-Robbins has also been selling its ice cream in U.S. supermarkets since 2014.
Entrepreneur’s Franchise 500
18. Baskin-Robbins ranked No. 12 on Entrepreneur’s 2019 Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of Baskin-Robbins franchise costs, based on Item 7 of the company’s 2019 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on Baskin-Robbins’ initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2019 FDD.
Section IV – Number of Franchised and Company-Owned Outlets
- Outlets at the Start of the Year: 1,056
- Outlets at the End of the Year: 1,092
- Net Change: +36
- Outlets at the Start of the Year: 1,092
- Outlets at the End of the Year: 1,072
- Net Change: -20
- Outlets at the Start of the Year: 1,072
- Outlets at the End of the Year: 993
- Net Change: -79
- Outlets at the Start of the Year: 0
- Outlets at the End of the Year: 0
- Net Change: 0
- Outlets at the Start of the Year: 0
- Outlets at the End of the Year: 0
- Net Change: 0
- Outlets at the Start of the Year: 0
- Outlets at the End of the Year: 0
- Net Change: 0
Section V – Financial Performance Representations (Item 19, 2019 FDD) and Analysis
- Tables 1 and 2 and notes provide financial performance representations that are historical, and that are based on information from existing Baskin-Robbins Restaurants (exclusive of Combo Restaurants, Special Development Opportunity Restaurants, Baskin-Robbins Express, and Restaurants operating under Territorial Franchise Agreements) that have been open for business to the public for at least one year during a one-year measuring period from October 29, 2017 to October 27, 2018.
- Tables 3 to 5 and notes provide financial performance representations that are historical, and that are based on information from existing Combo Restaurants that have been open for business to the public for at least one year during a one-year measuring period from October 29, 2017 to October 27, 2018.
Part 1 – Sales Data (Tables 1, 3, and 4)
- The sales figures are compiled by using historical sales that are reported to Baskin-Robbins by franchisees. Baskin-Robbins has not audited or verified the reports.
- This sales data does not include sales tax. The vast majority of the Restaurants that comprise this data are franchised, although Baskin-Robbins affiliates may own and operate a small number of Restaurants at any given time.
- Sales in regions with a higher concentration of Restaurants that have been in operation for a substantial period of time tend to have higher sales than regions with a lower concentration of Restaurants that have been in operation for a lesser time period.
- Many of the Restaurants included in this data have been open and operating for several years. These franchisees have achieved their level of sales after spending many years building customer goodwill at a particular location.
- Your sales will be affected by your own operational ability, which may include your experience with managing a business, your capital and financing (including working capital), continual training of you and your staff, customer service orientation, product quality, your business plan, and the use of experts (for example, an accountant) to assist in your business plan.
- Your sales may be affected by Restaurant location and site criteria, including traffic count and which side of the street your Restaurant is located, local household income, residential and/or daytime populations, ease of ingress and egress, seating, parking, the physical condition of your Restaurant, the size of your site, and the visibility of your exterior sign(s).
- Additionally, many of the Restaurants included in the sales figures are freestanding Restaurants or located at the end of a strip center, and if your Restaurant is not, your sales could be substantially lower than the figures in the chart.
- Individual locations may have layouts and seating capacities that vary from the typical location.
- Other factors that could have an effect upon your sales may include consumer preferences, competition (national and local), inflation, local construction and its impact on traffic patterns, and reports on the health effects of consuming food similar to that served in the Restaurants, as well as the impact of federal, state, and local government regulations.
- Your sales may be affected by consumer preferences for certain menu items over others, changes in the menu, and regional differences in products or product demand, including whether there are products not available to you or your region but sold in other regions. Menus are continually being revised, both adding and discontinuing products and product line extensions.
- Sales may be affected by fluctuations due to seasonality (particularly in colder climates), weather, and periodic marketing and advertising programs. Inclement weather may cause temporary Restaurant closings in some areas.
- The data below reflects historical sales. There is no assurance future sales will correspond to historical sales.
- Many Baskin-Robbins franchisees actively pursue cake sales opportunities. If you do not, your sales may be negatively affected. Additionally, seasonality and weather may significantly affect sales of ice cream and related products.
- Some individual Restaurants’ sales may include wholesale accounts and other distribution outlets, which may not be available to you. Not all of these opportunities have been successful for all participating franchisees.
Part 2 – COGS and Labor Data (Tables 2 and 5)
- “COGS” means the cost of goods sold, including food, beverages, and items served or associated with the food or beverage, such as cups, napkins, straws, bags, plastic utensils, and wrapping paper.
- “Labor” means crew, management, training, payroll tax, and workers’ compensation.
- COGS and Labor are stated as a percentage of gross sales (excluding sales tax and discounts). The vast majority of Restaurants that comprise this data are franchised, although Baskin-Robbins affiliates may own and operate a small number of Restaurants at any given time.
- The cost figures from franchised Restaurants are compiled from individual Restaurants by using cost data that are reported to Baskin-Robbins by franchisees for the monthly periods November 1, 2017 through October 31, 2018. Baskin-Robbins has not audited or verified the reports, nor have franchisees confirmed that the reports are prepared in accordance with generally accepted accounting principles or in accordance with Baskin-Robbins’ definition of COGS and Labor.
- Your costs will be affected by your own operational ability, which may include your experience with managing quick-service restaurant operations, your experience building and managing an organization, continual training of you and your staff, your business plan, and using experts (e.g. an accountant) to assist in your business plan. Your costs may be negatively affected by not adhering to Baskin-Robbins’ standards and system.
- Many of the Restaurants included in this data have been open and operating for several years. Those franchises may have lower cost percentages due to years of experience managing costs. For new franchisees, COGS and Labor cost percentages may initially exceed those of experienced operators.
- There is no assurance that future costs will correspond to historical costs because of factors such as inflation, changes in menu, and other variables.
- Factors affecting your COGS include, but are not limited to, the price of raw materials; your ability to manage and implement proper controls of waste, ruin, loss, theft, and the portion sizes served to the public; regional differences; temporary shortages; seasonal and weather fluctuations; and fluctuations due to periodic marketing and advertising programs. Additionally, freight charges may be higher in some areas. If the cost of gasoline increases in the U.S., the cost of freight will rise as well.
- The COGS data below reflects average Restaurant aggregate costs. Different food and beverage items have different cost percentages. Customer demand for products varies among Restaurants and regions and if your Restaurant sells a high percentage of high cost items, your food cost percentage will be higher than if you have a lower percentage of higher cost items.
- Factors affecting your Labor include, among other things, the local labor market and any applicable federal or state minimum wage law; pending healthcare legislation, employee turnover, and your operational abilities, including your ability to train and retain employees; your compensation that may be included in labor, which varies among franchisees; menu; product mix; Restaurant layout; your salary and benefits programs; and scheduling. Restaurants must be staffed in accordance with Baskin-Robbins’ standards.
- Some franchisees purchase finished products manufactured at another location. The cost of this finished product will vary depending upon the number of Restaurants being serviced by the manufacturing location and other factors. These franchisees may pay more for food costs but may pay less for other items such as labor, equipment, distribution, and rent.
- COGS may be particularly affected by the fluctuations in the price of coffee and other items and ingredients.
- Restaurants with lower sales may have higher COGS and Labor cost percentages because of less efficiencies and economies of scale, and more waste.
- The retail sales price that you establish will also affect the COGS and Labor percentages.
- If you are in a geographic area with fewer Restaurants, you may have higher COGS as a percentage of sales due to less distribution efficiencies.
- The “Total Number of Restaurants/Combo Restaurants in Sample” in Tables 2 and 5 is a subset of the “Total Number of Restaurants/Combo Restaurants in Sample” in Tables 1, 3, and 4 because not all Restaurants or Combo Restaurants reported COGS and Labor data for the twelve month reporting period.
- All of the Restaurants or Combo Restaurants in Tables 2 and 5 reported at least one month of COGS and Labor data for the twelve month reporting period.
Table 1 – Continental U.S. Baskin-Robbins Single Brand Restaurants, Average Restaurant Sales (for the Period October 29, 2017 to October 27, 2018)
Total Continental U.S.