Ice cream is something that no one hates and therefore having an ice-cream shop gives contentment like nothing else. These are ice cream outlets that can be started under an established brand where you have your outlet as independent owner. In other words, to learn how profitable a franchise of ice cream can be in your particular situation and how much it will cost you, they consider all the most important indicators on which each of these points depends. This article stresses that it is essential to commit the proper time in assessing these top five contributors due to their overwhelming importance and power since they will determine a new business’ success.
1. Franchise Fee
The franchise fee can be viewed as a first payment that you make to use the name of the franchisor and his/her know-how, including business format. Of course, initial investment on ice cream franchises may vary considerably according to the franchise. Remember: the franchise fee should describe every service you will be getting into with a partnership. Sometimes the price covers only your first training session while other costs like real estate, equipment. The franchise fee – in light of anticipated profits and all potential finance sources: ensure it fits your budget. Of course, the reality is that higher cost franchises may indeed be providing more value to their franchisees;
2. Expected Profits
It is, therefore, necessary for you to also look at the prospect of making money when assessing the costs of purchasing an ice cream franchise. It should be argued that the franchisor should be capable of offering average sales and profit numbers from the current franchisers. This will assist you to have a more realistic picture of the profit you are likely to earn after you have put your capital into the franchise.
As ice cream shops are typically run throughout the year with most of their sales generated during the summer months, ensure that the company considers annual revenue figures. While the biggest sales will presumably occur from March through October, that has to cover your costs for the rest of the year. The experience of current franchisees is also revealing; the majority have been in business for several years now. If no one has sustained their shop for 3-5 years, then they can be having poor profit margins.
3. Franchisor Support
As in any other business, you are bound to discover that there is so much that you have to learn in the first few years. Having proper professional training with a more pointed focus on franchising will be useful in order to avoid many pitfalls that a proprietor could encounter while managing an ice cream store. Ideally, to begin with, you would cultivate an initial training program that would embrace all the basic aspects of operations, management and financials. The training should equip you to manage the franchised outlet of the business on your own with all the structures and processes in place.
Maintenance is also extremely important as well as asking for help and receiving it continuously. You desire a franchisor who can give defined operations handbooks and policies, as well as having access to personnel in the event of arising complications. They should also inform the franchise owners on new products, offers for sale, and changes to improve functions in the various franchise restaurants.
The level of training and support for franchisees of a particular industry significantly differs among various franchisors. It is recommended that one has to make a visit to the different sites of the ice cream franchises and have a word with the current franchisee to get first-hand experience of whether the corporate team will make it possible for him to succeed or fail on his own. Their success is fully aligned with your success, in other words, the aim and objectives of their business are directly linked to your success in your business.
4. Brand Reputation
Ice cream is indeed enjoyable but opening a franchise business is always a serious undertaking and does involve risk. Selecting a well-known brand from the market that has a good reputation can give even more confidence when being a newcomer in the business field. The above factors include the company’s history, the number of franchised outlets, brand awareness, and the level of satisfaction of the franchisees.
A newer ice cream franchise may have better territory availability and lower fees but the business generally is not proven. You would in effect be piloting the scheme as one of the first franchisees ever to be franchised. This can also prove effective but is fraught with risks and complications. Lastly, it makes sense that your tolerance level to risks must match with the franchisor’s experience and reputation in the industry.
Another factor involves a brand image that exists between the business and the consumers under its coverage of the market. They also claim that nationally known brands are not always immune to local factors such as regional flavors.
5. Required Financial Assets
However amidst the franchise fee, there are substantial fixed and working capital investments in setting up and running an ice cream shop. These include; funding for property expenses, acquisition of equipment, inventory, employees wages, insurance, power, and other operational expenses. Gather all the forecasted start-up and operating expenditures before proceeding.
There is always a need to monitor the financial position and ensure that there is adequate capital to fund periods of low sales and other sundry expenses, which forms part of the daily operations of managing an ice cream shop.
Conclusion
Despite the endless entertaining experiences of the ice cream business, there are many promising years awaiting, nevertheless, it is necessary to examine all the opportunities very carefully. When it comes to franchising an ice cream franchise, review all aspects of the franchise agreement including franchise fees, profit reports, to brand image. Familiarizing yourself with these six analytic factors will assist you in selecting a perfect brand, setting helpful expectations, and eradicating detrimental mistakes.
