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Baskin-Robbins Franchise: Sales, Costs & Profits (2022)

One of the most famous ice cream franchise, Baskin-Robbins has over 8,000 stores worldwide. No wonder it’s very popular among franchisees and entrepreneurs. Another reason for that is the low investment cost of $465,100 on average.

But is this really a good investment? With an average turnover of $316,815, you would need to wait a few years before you pay back your investment.

In this article we’ll looking at Baskin-Robbins and its latest Franchise Disclosure Document. We’ll see how much profits you can make with this business, and whether it’s a good investment. Let’s dive in!

Baskin-Robbins franchise: revenues, fees and profits

Franchise fee$25,000
Royalty fee5.0%
Marketing fee5.9%
Investment (mid-point)$465,100
Average annual sales$316,815
Investment to sales ratio0.7x
Investment payback*9.8 years (mediocre)
Minimum net worth$250,000
Minimum liquid capital$125,000
* using 15% net profit margin

🔎 How does Baskin-Robbins compare vs. other franchises? Check the ranking

What is Baskin-Robbins?

Baskin Robbins is a leading American multinational chain specializing in ice cream and cake shops. Burt Baskin and Irv Robbins founded Baskin Robbins in 1945, with its first location in Glendale, California. 

Best known for its slogan “31 flavors,” the company has more than 1,400 flavors of ice cream and has introduced vegan and non-dairy flavors.

It started franchising in 1950 and it is owned by Inspire Brands, based in Canton, Massachusetts. Today, Baskin Robbins is the largest ice cream specialty chain worldwide, with over 8,000 locations of which 2,500 in the US.

Baskin-Robbins franchise: pros and cons

Just as it is with many franchises, a Baskin-Robbins franchise presents some advantages and disadvantages.

Pros

  • Strong brand name: In the ice cream industry, the Baskin Robbins brand is well known for its tasty ice cream flavors and cakes. Over the years, it has also established its presence in the US and globally. As a new franchisee, you’ll be joining a brand that has a huge customer following and customers who already understand what you offer, so you’re guaranteed a lot of traffic.
  • Variety and rich menu: Baskin Robbins has developed over 1,400 flavors. With vegan as well as non-dairy flavors, it caters to all types of customers. It is a good option for customers looking for diverse options. It also attracts customers to newly launched restaurants to try this diverse menu and discover what is new.
  • Training and support: The chain offers extensive training and support to new franchisees. The franchisor trains its franchisees on how to produce, merchandise, serve, and package products sold in its restaurants. In addition, it offers franchisees brand training, on-the-job training, and franchise operations to successfully manage their restaurants.
  • Different franchise models: The chain has different franchise models to cater to different investors. Franchisees can choose traditional or non-traditional locations and choose to operate either the Baskin Robbins kiosk, parlor, or lounge franchise programs
  • Large target customer base: The chain has developed a wide range of tasty and quality products. As a new franchisee, you can target a very large and unique customer base looking for the best ice cream flavors, cakes, waffles, sundaes, and brownies.
  • Huge potential for expansion: The brand is growing very fast and has a global presence. This allows franchisees to scale their businesses, and one can expand from one program to another with minimal effort and costs.

Cons

  • Competition: Baskin Robbins franchise faces a lot of competition in its industry from other competitors like Dairy Queen. So, even with a strong brand name, franchisees need to employ vibrant promotional and advertising efforts to remain competitive.
  • No exclusive territory protection: The franchisor grants franchisees the rights to operate their restaurants in a specific location. Therefore, it doesn’t offer any exclusive territory protection. New franchisees may face competition from franchises granted by the parent company.

How much does a Baskin-Robbins franchise cost?

You may need to invest $465,100 to open a Baskin-Robbins ice cream parlor.

This amount may vary based on various factors (like location, current market price, etc.). According to the latest Franchise Disclosure Document, the investment range can be as low as $293,840 and as high as $636,360.

The investment amount covers every type of expenditure that may incur during the opening of a restaurant. In addition to the initial franchise fee of $25,000, the investment amount covers:

  • Build costs: real estate development, equipment, fixtures, signs, restaurant technology system, licenses, permits, fees, etc.
  • Operating expenses:  opening inventory, uniforms, miscellaneous opening costs, insurance, travel & living expenses while training, additional funds for 3 months as working capital, etc.
CostLowHigh
Initial franchise fee$25,000$25,000
Build costs$246,440$499,760
Marketing startup fee$3,000$5,000
Operating expenses$19,400$106,600
Total$293,840$636,360
Source: 2022 FDD

What is the turnover of a Baskin-Robbins franchise?

On average, a Baskin-Robbins franchise makes $316,815 in sales per year. This number is the average of the 1,592 franchises operating in 2021.

Sales depend on the format of the ice cream shop you wish to open. For example, a single brand restaurant generates 4 times as much turnover than a Combo restaurant. As a reminder, Combo restaurants are Baskin-Robbins stores that share a menu and sitting area with a Dunkin Donuts store.

Number of restaurantsMedian sales
Single brand restaurants884$462,121
Combo restaurants (free standing)503$141,049
Combo Restaurants (shopping center / storefront)205$121,497
Average1,592$316,815
Source: 2022 FDD

How profitable is a Baskin-Robbins franchise?

A Baskin-Robbins franchise makes $94,094 in profits per year on average. This corresponds to a 30% adjusted EBITDA margin.

You should note that adjusted EBITDA and net profit are not the same. From EBITDA, you need to deduct taxes, debt interest expenses, and other costs to get to net profit.

Unfortunately, Baskin-Robbins does not provide any details on net profits for its franchise or company-owned restaurants. Also, net profit is very dependent on the capital structure of a company (whether you pay back a loan for example), that’s why we use EBITDA instead to assess the true profitability of a franchise.

It’s interesting to note that the 30% adjusted EBITDA margin is on the higher end compared to similar franchises as per our intelligence (~25-27% industry average). 

Note that to calculate this number we had to use the industry average for rent (8% sales). And for COGS (28%) and labor costs (23%), we only used single branded restaurants’ financial information as Baskin-Robbins doesn’t provide Combo restaurants’ data in regards to costs.

Profit-and-lossAmount ($)As % of sales
Sales$316,815100%
COGS$(89,342)28.2%
Labor$(73,501)23.2%
Rent$(25,345)8.0%*
Royalty + marketing fees$(34,533)10.9%
Adjusted EBITDA$94,094~30%
* industry average

Is a Baskin-Robbins franchise a good investment?

If you want to open a Baskin-Robbins franchise, you might wonder whether this is a good investment from a financial perspective. In other words, you might want to know whether the profits are worth the initial investment.

Remember, depending on the format of restaurant you choose, you would have to spend on average $465,100 to open a new Baskin-Robbins franchise. In return you will receive profits.

As explained earlier, profits have different definitions. The real profits you can pay yourself as dividends as a franchisee are net profits (unlike EBITDA above).

Now, we estimate net profit to be around 15% of sales (vs. 30% for our adjusted EBITDA margin). This means you would get $47,400 per year. Compared to the investment cost of $465,100, this means you would have to wait 10 years before you can actually make a profit on your initial investment. No need to tell you this is a long period of time.

Of course, this is an average. In order to you to assess your store profits and payback period, download our business plan below. You will find a pre-built financial plan for your business plan franchise application as well as helpful reports (breakeven, return on investment, etc.).

Download the Baskin-Robbins business plan and get your franchise funded

Including a 5-year financial plan built with the latest Franchise Disclosure Document numbers

How does Baskin-Robbins compare to other franchises?

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Tim Hortonshttps://sharpsheets.io/blog/tim-hortons-franchises-costs-profits/Coffee1,242,7501,188,2401.07.0500,000100,000
Checkers & Rally'shttps://sharpsheets.io/blog/checkers-franchises-profits-sales-costs/Burger837,8471,039,7731.25.4750,000250,000
Charleys Philly Steakshttps://sharpsheets.io/blog/charleys-philly-steaks-costs-profits/Sandwich509,806786,2331.54.3500,000100,000
Buffalo Wild Wingshttps://sharpsheets.io/blog/buffalo-wild-wings-costs-profits/Chicken3,546,9002,534,1480.79.31,500,000750,000
Rita's Icehttps://sharpsheets.io/blog/ritas-ice-franchise-costs-profits/Ice Cream215,839248,3401.25.8300,000100,000
A&W Restaurantshttps://sharpsheets.io/blog/aw-restaurants-franchises-costs-profits/Burger786,750851,2121.16.2350,000150,000
Hungry Howie’s Pizzahttps://sharpsheets.io/blog/hungry-howies-pizza-franchise-costs-profits/Pizza419,682806,8991.93.5750,000200,000
Bojangleshttps://sharpsheets.io/blog/bojangles-franchise-costs-profits/Chicken1,658,0001,801,0571.16.11,000,000500,000
McAlister’s Delihttps://sharpsheets.io/blog/mcalister-deli-franchise-costs-profits/Sandwich1,424,9631,865,8611.35.11,000,000500,000
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Qdoba Mexican Eatshttps://sharpsheets.io/blog/qdoba-mexican-eats-franchise-costs-profits/Mexican659,250972,9621.54.5
Freddy’shttps://sharpsheets.io/blog/freddys-franchise-costs-profits/Burger1,453,0401,792,9291.25.41,000,000400,000
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Pizza Ranchhttps://sharpsheets.io/blog/pizza-ranch-franchise-costs-profits/Pizza3,268,3001,174,0880.418.61,000,000297,000
Del Tacohttps://sharpsheets.io/blog/del-taco-franchise-costs-profits/Mexican1,406,8501,345,3411.07.02,000,000500,000
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Which Wichhttps://sharpsheets.io/blog/which-wich-franchises-profits-costs/Sandwich330,375281,8860.322.2500,000150,000
Marble Slab Creameryhttps://sharpsheets.io/blog/marble-slab-franchises-costs-profits/Ice Cream407,360251,0520.416.7250,000100,000
Mountain Mike's Pizzahttps://sharpsheets.io/blog/mountain-mikes-franchise-profits-costs/Pizza410,900865,7130.320.0300,000100,000
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Chicken Salad Chickhttps://sharpsheets.io/blog/chicken-salad-chick-franchises-costs-profits/Healthy, Salads651,0001,202,0200.320.0750,000250,000
Golden Chickhttps://sharpsheets.io/blog/golden-chick-franchises-costs-profits/Chicken362,975917,6092.52.62,000,000425,000
Perkinshttps://sharpsheets.io/blog/perkins-franchise-costs-profits/Diner1,922,7281,729,2460.97.41,500,000500,000
Waba Grillhttps://sharpsheets.io/blog/waba-grill-franchises-costs-profits/Teryaki454,000466,5361.06.51,000,000250,000
Bruster’s Ice Creamhttps://sharpsheets.io/blog/brusters-franchises-profits-costs/Ice Cream663,925466,6960.79.5375,000150,000