Some franchise opportunities may look great when you take the briefest look at them, but when you start digging closer, some things end up revealing themselves.
If you’re looking and thoroughly considering opening a franchise, you know there are many different options to look at.
I’ve previously covered how you can open an IV therapy clinic as an example.
In this article, I’ll dive deeper into Baskin-Robbins franchise fee & costs.
However, you shouldn’t just consider this cost if you’re making a decision about whether to buy a franchise.
To cut right to it, the franchise fee for a Baskin-Robbins ranges between $28,300 and $31,300 as stated in their FDD. In comparison, the overall cost to open a Baskin-Robbins ranges between $307,440 and $657,860.
All these numbers can be found in their FDD.
With that said, there are other fees that are much more important for the ongoing operations of the business.
Baskin-Robbins franchise fees & costs
A lot of people get caught in the franchise fees and the costs listed at the top of Baskin-Robbins’ FDD. However, those are not the numbers that are the most important once you get started on the daily operations of the business.
Once you’ve determined that you’re going to start doing your due diligence on Baskin-Robbins, you’ll want to look into their FDD (the franchise disclosure document).
Each company you’re looking into is required to give you an FDD before proceeding which outlines a lot of different things, like litigation, training, fees, and more.
While Item 3 talks about litigation against the company, Item 5 and Item 6 will talk about relevant fees. Item 5 talks about initial fees whereas, which includes things like the franchise fee. In comparison, item 6 talks about ongoing feed. Neither of these should be disregarded.
Item 6 is where it gets interesting because it describes the terms of what you’ll be paying on continuous basis.
In item 5, there’s a considerable section on the marketing start-up fee associated with opening, reopening, relocating, or remodeling a location. In those instances, you are required to spend marketing fees of at least $6,000, which is considered the standard marketing start-up fee. This fee can be waived in certain situations. That number increases to $10,000 if your restaurant is of the “combo restaurant type”. If you’re moving an existing Baskin-Robbins, the marketing fee is $3,500.
In addition to making sure you understand the structures, know what you’re committing to. For instance, in the same item. It specifies that you may be required to pay reimbursement of expenses if you or your architect aren’t prepared for a scheduled meeting. While those fees aren’t specifically outlined, they’re still aspects of starting a Baskin-Robbins franchise that you will want to be aware of.
Item 5 also specifies when certain amounts are due. While I could go into further detail on those specific outlined dates and due requirements, they’re more relevant for you to know if you choose to proceed.
This brings us to the next meaty part where we’ll discuss “other fees,” as listed in Item 6. In item 6, you’ll find various fees you’re required to pay on a continuous basis
When you open a Baskin-Robbins franchise, you’re paying 5.9% of gross sales in royalties, which is due on or before Thursday of each week. In addition, you’re expected to pay 5% of gross sales in continuing advertising fees. When you add the two numbers together (the 5.9% and the 5%), that’s the continued payments you’ll make weekly between royalties and advertising.
This number, sitting at 10.9% is rather high, if you ask me. While there are other franchises that are higher or similar, it’s not low. My issue with these high percentages in the food industry is that it’s an industry where margins are already hard. You open a location, and suddenly you have spoilage and employees falling sick.
You will also want to be mindful it costs $2,750 per person for training, which is something you’ll have to budget for when you open a Baskin-Robbins franchise. Baskin-Robbins also maintains the right to get insurance for you if you fail to get it yourself.
I always advice that it’s important you think about a potential exit before you even get started. Baskin-Robbins specifies fees related to transferring the business, too, which will need to be paid in certain events.While these transfer fees aren’t unusual, they’re just something for you to keep in mind.
For a Baskin/Robbins restaurant, there’s a $7,500 transfer fee for a majority interest in the business. For a combo restaurant, that number is $20,000. In regards to the fees, there’s nothing incredibly surprising in the FDD, but these are just numbers you need to be aware of before getting started.
There are tons of different franchising opportunities out there besides Baskin-Robbins. If you’re 3 to 6 months (or less) out from wanting to start a franchise, use the contact form to make sure we get in touch and make sure to find the right business opportunity for you.
