Breaking Down the Costs of Running a Ben & Jerry's Franchise

  • How to Open this Business: Guide
  • TOP-7 KPI Metrics
  • Startup Costs List
  • How To Increase Business Profitability?
  • How to Sale More?
  • How To Raise Capital: Guide
  • How to Value this Business?

Introduction

Ice cream has become a global, recognizable treat, and with it has come predictable demand from beloved brand franchises such as Ben & Jerry’s. The ice cream industry has grown from a billion annual industry to a billion annual industry. With this growth, more and more investors are turning to franchising to anchor their investments.

When it comes to Ben & Jerry’s franchises, investors are certainly investing in more than just a brand. Opening and deductible considerations should be extremely thorough, as upfront and ongoing costs can be substantial. In this blog post, we discuss the operating costs associated with running a Ben & Jerry’s franchise.

Operating Expenses

When considering the cost of opening and operating a Ben & Jerry’s franchise, several expenses should be considered. These include franchise fees, marketing fees, ingredient expenses, equipment expenses, staff salaries, insurance premiums, store maintenance, utility bills and advertising expenses.

Franchise fees

Franchise fees basically refer to the cost of purchasing the rights to operate a store from Ben & Jerry’s. These fees usually take the form of an initial payment and then additional, smaller payments to cover ongoing fees.

Marketing costs

An important part of a successful Ben & Jerry’s franchise is effective marketing and advertising. This requires investments in strategies such as local promotions, public relations and social media campaigns. Additionally, many franchisees produce branded merchandise.

Ingredient cost

Ingredient costs refer to the costs of acquiring the ingredients needed for production. This includes items such as ice cream mix, mixes, cones, cups, and various toppings. These costs can vary considerably depending on market prices and supplier availability.

Equipment expenses

In order to manufacture and serve Ben & Jerry’s products, franchisees will need to acquire the necessary tools, machines and other equipment. This includes items such as ice cream makers, blenders, freezers and mixers.

Staff salaries

Hiring and retaining employees is a crucial part of any business operation. Ben & Jerry’s franchisees will also need to allocate money for staff salaries and other employee-related costs such as benefits and taxes. It is important to ensure that prices are competitive in order to attract talented staff members.

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Insurance premiums

Insurance is a necessary expense in order to protect the business assets of a franchise. This includes both property and liability insurance.

Store maintenance

Franchisees need to factor in regular maintenance costs to keep their stores in good shape. This includes interior repairs, security upgrades, and replacement of any worn furniture or equipment.

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Utility bills

Utility bills are an inevitable cost for Ben & Jerry’s franchises. This includes items such as electricity, gas, water and sewage. The amount of electricity used will vary depending on the amount of production in the store.

Advertising costs

Advertising is an integral part of launching a successful Ben & Jerry’s franchise. This requires investments in promotional materials such as banners, flyers and print advertisements.

Franchise fees

Becoming a Ben & Jerry’s franchisee is a great opportunity for ice cream lovers who want to be their own boss. Although the rewards of starting a Ben & Jerry’s business can be high, one of the biggest considerations for potential franchisees is cost. When you purchase a franchise, you will pay initial franchise fees and additional fees throughout the term of the franchise agreement.

The reported franchise fee for a Ben & Jerry’s franchise is currently ,500. This fee covers an extensive initial training program, which includes three weeks at company headquarters in South Burlington, Vermont and one week at a Ben & Jerry’s Scoop store. In addition to franchise fees, the franchisee can expect to pay additional fees throughout the term of the agreement. These fees will include the cost of compliance audits, royalty fees, advertising contributions and local in-store marketing fees.

The franchise agreement requires franchisees to pay a minimum of ,000 a year as royalty fees. These royalty fees will go toward national advertising campaigns, product research and development, and other initiatives designed to benefit franchisees. Franchisees should also contribute to their local store marketing budget. These fees can be up to ,000 annually and will be used to promote their individual business location.

In addition to these direct operating costs, franchisees should also consider other costs associated with running a Ben & Jerry’s franchise. These costs may include rent, renovation fees, licenses, permits, staff training, product supply and other titles. All of these expenses must be carefully evaluated before deciding to move forward as a franchisee.

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Marketing costs

Every business needs marketing to reach potential customers, increase sales and grow. Operating a Ben & Jerry’s franchise is no different, and so it’s important to consider marketing expenses when determining the total cost of franchise ownership. According to the 2020 Franchise Disclosure Document (FDD), marketing costs for a Ben & Jerry’s franchise range from ,400 per month, or per scoop, to ,000 per month. These fees cover advertising, promotions and other forms of marketing for the business.

In addition to these fees, Ben & Jerry’s franchisees are also responsible for contributing to advertising funds managed by their franchisor on a quarterly basis. These funds support national and local advertising campaigns. The exact amount of the contribution will depend on the number of scoops sold, ranging from 0.4% to 1% of gross sales. Companies that contribute 1% to the advertising fund contribute a 0 per 1,000 scoops sold.

It is important to note that while the marketing costs associated with a Ben & Jerry’s franchise are not insignificant, they are also critical to the success of the business. With the right marketing strategies and an effective plan, a Ben & Jerry’s franchisee can reach a wide audience and generate a strong return on investment.

Ingredient cost

The total ingredient cost of Ben & Jerry’s franchise operations can be quite expensive. The average ingredient cost for a single scoop of ice cream, for example, is thought to hover around .50. This includes the costs for the ice cream base and any added flavorings. However, this cost can vary depending on the type of flavors and combinations used.

When considering franchise operations, the cost of ingredients should also factor in ancillary items, such as toppings and sundae sauces. These additional items can add up to a significant amount, as can the cost of packaging. To calculate a realistic ingredient cost for each scoop of ice cream, be sure to include these quantities in the total calculation.

In the United States, the latest data from the Bureau of Labor Statistics (BLS) indicates that the cost of these ingredients has fallen from an average of .44 per pound in 2019-20 to .31 per pound in 2020- 2010. This 4.4% increase, however, can vary greatly depending on the type and quality of ingredients used.

Ben & Jerry’s franchise operations must also consider other costs besides ingredients, such as labor, overhead, and the cost of equipment. In the United States, labor costs increased by more than 4% on a year-over-year basis in 2020-21. Adding all these costs together should give a more accurate representation the total cost of ingredients and services per scoop of ice cream.

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Equipment expenses

Capital expenditures are a key consideration to make when opening a Ben & Jerry’s franchise. These costs include all of the equipment needed to open and maintain the store, such as refrigerators, freezers, food preparation equipment, furniture, decor and more.

Depending on the size and configuration of the desired store, equipment costs can range from around ,500 for a small store up to ,000 for a larger store . You may also have to shell out a ,000-,000 for POS system and other technology to ensure a smooth customer experience.

As with other franchise setup costs, you may be eligible for discounts on equipment purchases through your franchisor. Be sure to work with them to find the best option for your business. After the initial purchases are made, there may be additional expenses such as shipping, installation, and on-site maintenance.

With proper maintenance, your equipment should last at least several years before it needs to be replaced or upgraded. In the event of problems or broken parts, you may consider obtaining Repair and Maintenance Agreements through your franchise . This will potentially help you save costly repairs and ensure your equipment is running smoothly.

Staff salaries

When running a Ben and Jerry’s franchise, one of the biggest costs to consider is staff salaries. The United States Federal Trade Commission (FTC) franchise regulations state that all franchisees must pay their employees according to the Fair Labor Standards Act (FLSA).

The average wage for employees at franchise locations is currently .50 per hour . These salaries should be considered when budgeting to run a franchise, as they are likely to be a significant part of the company’s expenses.

In the United States, employers are also required to provide certain benefits to their employees, such as health insurance and vacations. The cost of these benefits varies depending on the type of benefits offered, but can range from ,200 to ,400 per employee .

Franchise owners also need to consider payroll taxes. In the United States, employers are responsible for withholding taxes from all wages of their employees. The total amount of taxes depends on the total salary, but it can range from 7.65% to 35.3% of the salary.

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Finally, employers must also consider the cost of employee incentives. Incentives such as gift cards and bonus payments can help motivate employees to stay with the company and ensure they provide excellent service. The cost of these incentives varies from company to company, but can often range from to ,000 per employee.

When considering the costs of running a Ben and Jerry’s franchise, it’s important to consider the costs of salaries, benefits, taxes, and incentives. All of these costs can add up quickly and should be considered when budgeting for the business.

Insurance premiums

Before making the decision to own a Ben & Jerry’s franchise, there are many costs to consider. One of them is insurance premiums. As with any other business, insurance is a crucial factor to consider. It is important to understand how much it will cost and what type of coverage is included.

The amount of money required for insurance premiums will vary depending on a few factors. The size and location of the franchise, the number of employees, and the products and services offered all affect the cost of insurance. Insurance premiums can range from a few hundred dollars to five thousand dollars or more for annual coverage.

In the United States, the average cost of an insurance premium for a Ben & Jerry’s franchise is there ,500 per year. This cost is usually affected by the type of coverage purchased, so buy the best deal. Common types of insurance for businesses include:

  • General liability insurance
  • Product liability insurance
  • Professional liability insurance
  • Commercial property insurance
  • workers compensation insurance

Make sure you understand what type of coverage is included in the insurance policy and how much you will pay in premium. Be sure to consider the full range of benefits, including the different types of compensation available. If you have employees, you may also need to offer additional insurance.

The cost of insurance premiums may seem high, but it’s an important part of protecting your business. Take the time to ask questions, research carefully, and make sure you’re getting the best coverage for your needs. Your business is worth the investment.

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Store maintenance

One of the integral operating costs of owning and running a Ben & Jerry’s franchise is store maintenance. Costs associated with maintaining stores involve a wide range of expenses such as hiring exterior and interior cleaning services, restocking store shelves, service and repair equipment, and more. According to a recent survey, the average cost of maintaining stores for a Ben & Jerry’s franchise was ,400 per month . It should be noted, however, that because the cost of maintaining stores can vary depending on a franchise’s unique needs and circumstances, this amount can often be higher or lower than average.

The exact costs associated with store maintenance also vary depending on the type of maintenance performed. Some of the common store maintenance costs may include:

  • Hiring exterior and interior cleaning services
  • Replenishment store shelves
  • Service and repair equipment
  • Parking lot and grounds maintenance
  • Replacement of high traffic items such as mop heads and floor mats
  • Inspection of security and fire prevention systems

These costs can be reduced by taking a few simple steps such as regular cleaning, equipment inspections and maintenance, timely restocking of store shelves, and proactive repairs. Taking these steps can help reduce store maintenance costs and ensure the store is up and running.

Utility bills

Running a Ben & Jerry’s franchise requires paying a variety of bills and fees, including utility bills. Utility bills are the costs associated with providing a comfortable living, working and leisure environment. These bills may include electricity, gas and water charges.

Recent statistics from the US Energy Information Administration show that the national electricity average was .13 per kWh in 2020. In 2019, the total electricity expenditure in the United States was approximately 8 billion. This figure is expected to climb as electricity prices continue to rise.

Natural gas costs, meanwhile, averaged .10 per kWh in the United States in 2020. Total natural gas spending in the United States is considerable, with approximately 1 billion spent on gas in 2019. This figure is expected to remain largely unchanged over the next few years.

Finally, water bills are also part of the utility costs associated with a Ben & Jerry’s franchise. The average residential water bill in the United States in 2020 was around per month. Depending on usage, commercial water bills can range from 0 to over 0 per month. Good water management practices can help businesses keep these costs under control.

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Advertising costs

For any business that wants to succeed, advertising costs are essential. This applies to franchising a business such as Ben & Jerry’s, which has the benefit of an established brand and marketing strategy but still needs to be promoted locally. According to The 2018 Franchise Disclosure Document (FDD) , a minimum equity investment of 5,000 is required to open a Ben & Jerry’s franchise, with 0,000 in liquid assets.

Franchisees can expect to pay 7.5% of their total gross sales, plus an additional 0 for advertising purposes each month. This results in the estimated monthly advertising costs for Ben & Jerry’s being ,365 . If the franchisee chooses to join the cooperative advertising program, they may be required to spend an additional 1.5% on national advertising, bringing the total to ,893 per month.

Franchisees should also adhere to Ben & Jerry’s guidelines when advertising. These include costs associated with local radio, print, and television advertising, as well as costs associated with strong digital media and social media campaigns. As part of Ben & Jerry’s brand marketing strategy, their franchisees should also invest in effective and relevant cause-related marketing campaigns.

To stay competitive, Ben & Jerry’s recommends that their franchisees continue to invest in marketing and that they set aside approximately 8-10% of their total gross sales for advertising, with a suggested minimum annual spend of ,000 – ,000 for basic advertising messages. With the proper preparation and investment, Ben & Jerry’s franchisees can expect to attract new customers and remain competitive in their local markets.

Conclusion

Ben & Jerry’s franchises are a great way to invest in a popular industry, but the costs associated with running one must first be carefully considered. Initial franchise fees, marketing fees, ingredient fees, equipment expenses, staff salaries, insurance premiums, store maintenance and utility bills and advertising costs all add up and could affect the success of the franchise.

It is important to calculate the budget in advance and understand what franchise fees, operating expenses and profits may look like when investing in a Ben & Jerry’s franchise. Whether you decide to open a franchise or not, the success or failure of a business ultimately comes down to how you manage the business operation.