How To Open An Ice Cream Shop Franchise: A Detailed Step-by-Step Guide
Want to open an ice cream shop franchise? Here’s a step-by-step guide to help you do it.
Aidan ToborAuthor
Opening an Ice Cream Shop Checklist
So many things go into opening an ice cream shop. With this free PDF checklist, you'll set your new business up for success.
Get free downloadOpening an ice cream shop franchise is a tantalizing opportunity to indulge in a business that’s all about joy, creativity, and community. However, navigating the path to franchise ownership involves more than just a love for ice cream; it requires a solid understanding of the market's financial potential. According to a promising Statista report, revenue in the Ice Cream market amounts to $103.40bn in 2024, and the market is expected to grow annually by 5.49% (CAGR 2024-2029). With such significant market potential, this detailed guide will walk you through each crucial step to help you successfully launch and manage your ice cream shop franchise.
Steps to consider when opening an ice cream shop franchise
1. Evaluate the franchise opportunity
Research the ice cream industry
Understanding the ice cream industry is crucial for making informed decisions:
Industry trends: Explore current trends like the rise of organic, low-sugar, or plant-based ice cream options. Note how these trends affect consumer preferences and market demand. For example, plant-based ice creams are becoming increasingly popular among health-conscious consumers and those with dietary restrictions.
Franchise categories: Ice cream shops can vary widely, from traditional scoop shops to gourmet parlors or soft-serve chains. Identify where your prospective franchise fits within these categories and how it positions itself in the market. For instance, does it focus on premium, artisanal flavors or quick, convenient service?
Market analysis: Investigate your target area’s demographics. Is there a significant presence of families, schools, or tourist attractions? These factors influence foot traffic and potential customer base. Also, evaluate local competition: Are there many other ice cream shops, or is there room for a new player?
Assess Your Personal Goals and Financial Situation
Owning a franchise requires a solid understanding of your personal and financial readiness:
Motivation for franchising: Reflect on why you want to invest in an ice cream franchise. Are you attracted by the brand’s established reputation, operational support, or the opportunity to bring joy to your community through a beloved product?
Financial assessment: Calculate the total investment required, including franchise fees, initial equipment purchases, store build-out, and initial operating costs. Ice cream shop franchises often have significant costs for high-quality freezers, refrigeration units, and stylish interior design.
Time and involvement: Consider the time commitment involved. Running an ice cream shop can be demanding, especially during peak seasons. Will you be actively involved in daily operations, or will you hire a manager?
Review franchise options
Choose the franchise that best aligns with your goals and resources:
Brand reputation: Investigate the franchise’s history, customer reviews, and market presence. A well-known brand with a strong reputation can attract customers and build trust more easily.
Fit with personal values: Ensure the franchise’s values match your own. For example, if you’re passionate about sustainability, look for franchises that emphasize eco-friendly practices and locally sourced ingredients.
Market position: Assess the franchise’s position in the market. Some franchises might be leaders in their niche, while others are emerging brands with growth potential. Choose one that aligns with your business vision and the market demand in your area.
California (76,226 businesses), Texas (46,193 businesses), and New York (44,727 businesses) have the highest number of businesses in the Ice Cream Stores industry in the U.S. Be sure to evaluate if your area is the best fit for a new ice cream shop franchise.
2. Conducting Due Diligence and Franchise Selection
Study the franchise disclosure document (FDD)
The Franchise Disclosure Document (FDD) is a legally required document that provides detailed information about the franchise you’re considering. Here’s why it’s crucial:
Fees and costs: Review all costs associated with the franchise, including initial fees, ongoing royalties, and contributions to the marketing fund. Ice cream franchises often have higher equipment and supply costs due to the need for specialized machinery and high-quality ingredients.
Support offered: Look into the support the franchisor provides, such as training programs, marketing assistance, and operational support. For an ice cream shop, this might include guidance on store design, flavor development, and supplier relationships.
Financial performance: Examine the financial performance representations in the FDD to gauge potential profitability. Look for details on average sales, profit margins, and performance of existing franchises.
Legal terms: Understand the legal obligations, including the length of the franchise agreement, renewal terms, and any territorial restrictions.
Consult with Current Franchisees
Engage with current franchisees to get a real sense of what running the franchise entails:
Daily operations: Ask about their daily responsibilities, staffing challenges, and customer interaction. Understanding their experiences will help you prepare for similar scenarios.
Support experience: Inquire about the franchisor’s support in areas such as training, marketing, and troubleshooting. Effective support can make a significant difference in your franchise’s success.
Seek Professional Advice
Engage experts to ensure you make informed decisions:
Franchise attorney: Have an attorney review the FDD and franchise agreement to identify any potential issues and ensure that your rights are protected.
Financial advisor: Work with a financial advisor to assess the franchise’s financial viability and to create a detailed budget and financial plan.
3. Securing financing
Estimate total startup costs
Understanding and budgeting for startup costs is critical:
Franchise fees: These are the upfront costs to acquire the franchise rights. Ice cream franchises often have fees that can range from $20,000 to $50,000.
Real estate: Costs for leasing or purchasing a location can vary greatly depending on the size and location of the property.
Equipment and Build-Out: Invest in high-quality ice cream machines, freezers, display cases, and interior decor. The build-out might also include designing an inviting customer space and installing efficient operational systems.
Working capital: Ensure you have sufficient capital for initial inventory, staff wages, and operating expenses until the business becomes profitable.
Explore financing options
Identify how you will fund your franchise:
Bank loans: Consider traditional commercial loans or SBA loans. SBA loans are popular for franchise financing due to their favorable terms and lower down payments.
Franchisor financing: Some franchisors offer financing options or have partnerships with lenders to help you secure funding.
Alternative options: Explore crowdfunding or private investors as alternative sources of capital if traditional financing doesn’t meet your needs.
Prepare your business plan
A well-prepared business plan is essential for securing financing and guiding your operations:
Business vision: Clearly articulate your vision for the franchise, including your unique selling propositions and market strategy.
Market analysis: Provide a thorough analysis of your target market, including customer demographics and competitive landscape.
Financial projections: Include detailed financial projections, such as income statements, cash flow statements, and balance sheets, to demonstrate the potential profitability of the franchise.
Restaurant Business Plan Template
No matter where you’re at in your restaurant ownership journey, a business plan will be your north star. Organize your vision and ensure that nothing is overlooked with this free template.
4. Site selection and build-out
Choosing the right location
Location is a critical factor for success in the ice cream business:
High-traffic areas: Look for locations with high visibility and foot traffic, such as near shopping centers, schools, or parks. Ice cream shops benefit from locations where families and children frequently visit.
Local demand: Assess whether the local area has a strong demand for ice cream. Seasonal trends might affect sales, so consider areas with a year-round appeal or additional attractions to draw in customers.
Lease negotiation
Negotiate favorable lease terms to set your franchise up for success:
Lease terms: Aim for a lease that offers flexibility in terms of rent and duration. Favorable terms might include options for renewal or expansion.
Commercial real estate agent: Work with an experienced agent who can help you find the best location and negotiate terms that protect your interests.
Ice cream shop build-out
The build-out phase is where your vision starts to take shape:
Franchisor guidelines: Follow the franchisor’s design and layout guidelines to ensure brand consistency. This might include specific requirements for shop layout, equipment placement, and interior design.
Construction oversight: Manage the build-out process closely to ensure it stays on schedule and within budget. Work with reputable contractors who understand the unique requirements of an ice cream shop.
5. Franchise training and operational setup
Complete franchisor training
Training is a crucial part of setting up your franchise:
Operational training: Learn how to operate ice cream machines, manage inventory, and maintain quality standards. This training will ensure you and your staff are well-prepared for daily operations.
Financial management: Receive guidance on handling financial aspects like budgeting, payroll, and cost control. Effective financial management is key to maintaining profitability.
Marketing and promotions: Understand the franchisor’s marketing strategies and how to implement local promotions. This includes leveraging national campaigns and creating local marketing initiatives to drive traffic.
Set up your ice cream shop operations
Establish the systems and processes needed for smooth operations:
Staff hiring and training: Recruit staff who are enthusiastic and customer-focused. Provide comprehensive training on customer service, product knowledge, and operational procedures.
Operational systems: Implement necessary tools such as a POS system, inventory management software, and accounting systems. Ensure these tools integrate seamlessly with the franchise’s requirements.
Marketing your grand opening
A successful grand opening can set the tone for your franchise’s future:
Franchisor’s marketing plan: Collaborate with the franchisor on national and regional marketing efforts. Utilize provided materials and guidelines to promote your grand opening.
Local promotion: Engage with your community through social media, local events, and partnerships with other businesses. Consider special promotions or free samples to attract initial customers and generate buzz.
When franchisee Numaan Shah and his brother-in-law began looking at franchise opportunities, they settled on Cold Stone Creamery. Their reasoning was simple: it was family-oriented, fun, had a great product, and was poised for growth.
“Cold Stone has strong brand power! People recognize the brand, and they love the products so much that they’re willing to stand in line for them … Something else that has kept us engaged is the strength of our marketing and operational support. You get a model to follow, and as a new business owner that was very important for me. We have the opportunity to scale up and down; corporate is not going to come in and run your stores, but they give us guidance as we look to grow, or contract, or sell, or buy, or open a new location. It’s our responsibility to run a good store and drive sales, but they are very focused on the support we need to help with brand awareness and so much more.”
Ice Cream Shop Menu Templates
Use these ice cream shop menu templates as a starting point for your menu design or to give your menu a refresh.
6. Opening and managing your franchise
Soft opening vs. grand opening
Strategize your opening to maximize success:
Soft opening: Use a soft opening to test operations, train staff, and refine processes before the official launch. This phase helps identify and address any issues in a low-pressure environment.
Grand opening: Plan a grand opening event to attract attention and build a customer base. This could include special promotions, local media coverage, and community events.
Ongoing management and franchisor support
The support you receive from the franchisor doesn’t stop after opening:
Operational and marketing support: Maintain regular communication with your franchisor for continued operational assistance and marketing initiatives. Over time, they may introduce new flavors, campaigns, or operational improvements.
Focus on continuous improvement: Regularly review customer feedback, analyze sales data, and look for ways to improve. Small tweaks can lead to better efficiency, higher sales, and improved customer satisfaction.
Growth and expansion
If your ice cream shop franchise is successful, you may want to consider expanding your portfolio:
Adding locations: Many franchisees choose to open additional units once they’ve mastered the operations of their first franchise. Talk with your franchisor about multi-unit opportunities if expansion is part of your long-term plan.
Potential ice cream shop franchise opportunities
Here’s a list of popular ice cream shop franchise opportunities, each offering unique concepts and flavors:
1. Baskin-Robbins
Franchise Overview: Known for its "31 flavors" slogan, Baskin-Robbins offers a wide variety of ice cream flavors, as well as cakes, sundaes, and other frozen treats.
Initial Investment: $93,000 - $401,000
Franchise Fee: $25,000
2. Cold Stone Creamery
Franchise Overview: Cold Stone Creamery is famous for its signature "mix-ins" that are blended into freshly made ice cream on a cold stone surface, offering a custom and interactive ice cream experience.
Initial Investment: $198,200 - $480,500
Franchise Fee: $30,000
3. Dippin' Dots
Franchise Overview: Dippin' Dots offers a unique product with its "ice cream of the future" — flash-frozen beads of ice cream that come in a variety of flavors and can be enjoyed in a fun, futuristic format.
Initial Investment: $100,000 - $550,000
Franchise Fee: $15,000
4. Menchie's Frozen Yogurt
Franchise Overview: Menchie's specializes in frozen yogurt with a wide range of flavors and toppings, emphasizing a fun, family-friendly experience.
Initial Investment: $380,000 - $542,000
Franchise Fee: $35,000
5. Culver's
Franchise Overview: Although primarily known for its ButterBurgers and fresh, frozen custard, Culver's offers a rich and creamy ice cream experience, with a focus on quality and customer service.
Initial Investment: $2.2 million - $4.5 million
Franchise Fee: $55,000
6. Scoop Ice Cream
Franchise Overview: Scoop Ice Cream focuses on gourmet ice cream flavors and offers a customizable experience with a range of toppings and mix-ins.
Initial Investment: $150,000 - $350,000
Franchise Fee: $20,000
7. Bruster's Real Ice Cream
Franchise Overview: Bruster's is known for its premium ice cream made on-site daily, offering a variety of flavors, sundaes, and specialty treats.
Initial Investment: $252,000 - $415,000
Franchise Fee: $25,000
8. Rita's Italian Ice
Franchise Overview: Rita's specializes in Italian ice and frozen custard, offering a refreshing twist on traditional ice cream with a focus on vibrant flavors and a unique frozen treat experience.
Initial Investment: $98,000 - $305,000
Franchise Fee: $25,000
9. FroyoWorld
Franchise Overview: FroyoWorld offers a variety of frozen yogurt flavors with an emphasis on self-serve options, allowing customers to create their own unique combinations.
Initial Investment: $228,000 - $400,000
Franchise Fee: $30,000
10. The Ice Cream Shoppe
Franchise Overview: The Ice Cream Shoppe features a wide range of classic and innovative ice cream flavors, along with sundaes, milkshakes, and other frozen desserts.
Initial Investment: $100,000 - $250,000
Franchise Fee: $20,000
These ice cream shop franchises offer a variety of investment levels, product offerings, and brand experiences, providing options for those interested in the sweet treat industry.
Final thoughts
These ice cream shop franchise opportunities represent a range of investment levels and business models, from traditional scoop shops to gourmet parlors or soft-serve chains. As you evaluate your options, consider your budget, market, and personal preferences to find the best fit. Scoop your dreams up high!
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DISCLAIMER: This information is provided for general informational purposes only, and publication does not constitute an endorsement. Toast does not warrant the accuracy or completeness of any information, text, graphics, links, or other items contained within this content. Toast does not guarantee you will achieve any specific results if you follow any advice herein. It may be advisable for you to consult with a professional such as a lawyer, accountant, or business advisor for advice specific to your situation.
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