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Fosters Freeze Franchise ProfileFood Franchises > Ice Cream & Frozen Yogurt |
What is the Initial Investment for a Fosters Freeze Franchise?
To start a Fosters Freeze franchise, you can expect a low initial investment of around $178,000, with the potential to reach up to $4,932,500. This includes a franchise fee of $45,000. Additionally, you will need to have cash on hand between $611,500 and $1,009,000 and a net worth of $200,000 to $500,000 to qualify for ownership.
What Are the Ongoing Fees Associated with Fosters Freeze?
Franchisees of Fosters Freeze are required to pay a royalty fee of 4% on gross sales, along with a marketing fee of 3%. These ongoing fees are essential for maintaining brand presence and ensuring franchisees benefit from collective marketing efforts.
What Is the Financial Performance of Fosters Freeze Units?
On average, Fosters Freeze units generate annual revenue of approximately $115,846, with a gross profit margin of 56.8%. The average annual operating expenses amount to $46,251, leading to an EBITDA of about $19,510, which represents 16.9% of revenue. This financial performance indicates a solid opportunity for profitability in the franchise model.
How Quickly Can You Expect to Break Even with a Fosters Freeze Franchise?
Franchisees can anticipate breaking even within 12 months of operation. This swift payback period is attractive for potential investors, as it allows for quicker recoupment of initial investments and the potential to start generating profit soon after opening.
Fosters Freeze Franchise Financial Requirements
Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.
The minimum total assets (minus liabilities) you must possess.
Net Worth Required:
The estimated period to recoup your total investment.
Investment Payback:
The initial fee paid to join the franchise system.
Franchise Fee:
Ongoing percentage of revenue paid to the franchisor.
Royalty Fee:
Regular contribution toward the franchise’s advertising fund.
Marketing Fee:
The estimated timeframe to recover your initial costs.
Breakeven Time:
The total amount required to launch the franchise.
Initial Investment:
The minimum liquid capital you must have on hand.
Cash Required:
The typical yearly revenue generated per franchise location.
Average Revenue:
The middle value of yearly revenue among franchise locations.
Median Revenue:
The largest reported annual revenue among franchisees.
Highest Revenue:
The smallest reported annual revenue among franchisees.
Lowest Revenue:
A broad sector defining similar types of franchise businesses.
Industry:
A more specific division within the broader industry.
Category:
The key individuals guiding the franchise’s strategy and growth.
Leadership:
The official business address of the franchisor’s headquarters.
Corporate Address:
Available financing options to help start the franchise.
Funding Year:
The main organization that owns the franchise brand.
Parent Company:
Fosters Freeze Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2018 | 2019 | 2020 |
|---|---|---|---|
| Total Units | 70 | 69 | 65 |
| Net Change YoY | -1 | -4 | |
| Franchised Units | 70 | 69 | 65 |
| Net Change YoY | -1 | -4 | |
| Corporate Units | 0 | 0 | 0 |
| Net Change YoY |
Initial Investment
The Fosters Freeze franchise offers a range of initial investment options, with costs starting as low as $178,000 and reaching up to $4,932,500. This variability allows aspiring franchisees to assess their financial readiness and choose a location or model that aligns with their budget and business goals.
Franchise Fees
Franchisees are required to pay an initial franchise fee of $45,000. Additionally, there are ongoing royalty fees of 4% of gross sales and a marketing fee of 3%. These fees contribute to the overall support and brand marketing efforts provided by Fosters Freeze, ensuring franchisees benefit from a well-recognized brand.
Financial Performance
Fosters Freeze units generate an average annual revenue of $121,339, with a median of $115,846. The revenue can vary significantly, with the lowest annual revenue recorded at $39,286 and the highest at $171,988. This financial performance highlights the potential for profitability, depending on location and management practices.
Cash and Net Worth Requirements
To qualify for a Fosters Freeze franchise, prospective owners must demonstrate a cash requirement of $611,500 to $1,009,000 and a net worth between $200,000 and $500,000. These financial prerequisites help ensure that franchisees have the necessary resources to support their business effectively from the outset.
Breakeven and Payback Period
Franchisees can expect to reach breakeven within approximately 12 months of operation, with an investment payback period also estimated at 12 months. This relatively quick turnaround can be appealing for investors looking for a fast return on their initial investment.
Franchise Growth
As of 2020, Fosters Freeze has seen a slight decline in the number of franchised units, with 65 units operating compared to 70 in 2018. While the brand has maintained a focus on franchising, potential franchisees should consider the current market dynamics and growth opportunities within the Fosters Freeze system.
Frequently Asked Questions
The initial investment for a Fosters Freeze franchise ranges from $178,000 to $4,932,500, depending on various factors such as location and size of the unit.