According to Better Business by Michael Solomon, a franchise is “a method of doing business whereby the business sells its products or services under the company’s name to independent third-party operators” (138-139). Franchises are very important for today’s economic system because not only does is allow for more job opportunities, but it is also flexible for business owners because they can be run from the comfort of your own home. It’s important to do homework before anyone decided to purchase a business so that one, you can be aware of the time, energy, and money needed to make everything run smoothly and two because you want to be prepared to satisfy customers and know how to handle the financial paperwork and other contracts. Is there a lot of competition for this business? How much support will I receive from the franchisor? These are all important questions to ask yourself if you are wanting to franchise.
The first company I decided to research was Baskin Robbins, a popular restaurant that sells ice-cream in 31 different flavors. Baskin Robbins also has a selection of frozen yogurt, sherbet, ice-cream cakes, and drinks. To be eligible to operate or buy this business, the International Franchise Association says, “Ideally, franchisees should possess: 1) An understanding of brand-building within the community and a drive for local store marketing; 2) A demonstrated ability to build a high-performing team dedicated to operational excellence and guest satisfaction; 3) The desire and financial resources to develop or purchase one or more locations.” Baskin Robbins is looking for individuals who can manage to advertise, employ workers who can make customers happy and can handle the business financially. On the website, Franchise Direct, it states the initial franchise fee has a low of $12,500 and a high of $25,000 but after all the other fees and costs are added the total becomes a low of $93,550 and a high of $401,800 (Franchise Direct). Some of the fees that are added to the total include the opening costs, insurance, equipment, worker’s uniforms, funds for the first three months of operating the business, and the technological systems. With all these costs, the length of the franchising term is about 5 to10 years and if you wish to continue, a renewal will have to be done (Franchise Direct). On the Baskin Robbins website under the topic of franchising, it says, “There is a 3-week training program in Burbank, CA. Training to include live in-store technical training, instructor-led classroom training, online learning management system, mentoring and skill building” (Baskin Robbins Franchising). Training for Baskin Robbins means that the franchisee learns how to operate the business like storing, serving, and packaging the company’s products, and practice serving customers. During the first year, the franchisee will most likely be working full time until a manager can be trained to stay on the premises. There are some restrictions on what the franchisee can and can’t do. For example, there must be some sort of manager or the franchisee themselves to always be on the premises always and no other business activity can be done without approval. The franchisee can not offer different products than that of what’s on the approved menu (Franchise Direct).
The second company I decided to research was Ben & Jerry’s Ice Cream. This also is a popular ice cream shop that is reputable for having delicious ice-cream, sorbet, frozen yogurt, shakes, sundaes, drinks, fun toppings, and novelties. To be eligible to franchise this company, the IFA (International Franchise Association) says, “We seek franchisees with shared values, passion for the brand, and a full-time commitment to developing the Ben & Jerry’s franchise business; strong business acumen and management experience; a zeal for working with the public; a fun, flexible, and enthusiastic personality with strong leadership skills; and an excitement for community involvement and social responsibility.” Ben & Jerry’s is searching for individuals who are fun and whimsical but also have the drive to connect with customers and the brand. One thing that is really emphasized on their website is having an excellent location. If there are too many problems with traffic, population demographics, or lack of surrounding businesses, then Ben & Jerry’s will most likely not let you own a scoop shop. The startup fees, according to Ben & Jerrys Website, is $189,600- $430,800 for a kiosk shop, $157,600- $281,800 for an In-Line shop, and $109,485- $237,850 for a full-sized scoop shop. The three-month operating expenses for the three types of shops is a total of $55,000 but the actual franchising fee is $37,000. Depending on which shop a franchisee chooses, there are different fees associated. For example, the full-sized shop has furniture and equipment along with professional and construction fees, unlike the kiosk shop where there must be land permits, menu boards, and smaller kitchen equipment. Some other fees to expect are the renewal fee of $15,000 after 10 years, a relocation fee of $3,000, and even a $1,800 fee for training new managers. Overall the total cost of opening the business is anywhere from $200,000 to $500,000 (Franchise Direct). Ben & Jerry’s does not provide any financial assistance and they expect the franchisor to be financially secure. When it comes to training, IFA says, “Our franchisees benefit from site selection and design and build guidance to get their shops built. Training begins with eight days spent at Scoop University in Vermont, followed by in-store training prior to opening and ongoing support from a field-based operations team” (Franchise.org). During their training, there are lectures, oral presentations, videos and even field trips. When training is done, based on a franchisee’s performance, they will be able to continue through the process of operating the business but if the company believes you are not ready, then you stay for additional courses. Franchisees must renew their certifications every 5 years by attending seminars and other training programs (Franchise Direct). One interesting thing I found about training is that when first starting out, Ben & Jerry’s will only train 2 workers prior to opening and only one more additional trainee after 6 months of opening. Some rules and regulations that are implemented for franchisees are that there must be a full dedication to this company. They expect 40 hours a week from either the manager, franchiser, or both and they will only allow a manager who has been trained through their company to have that authority. They also can only sell the products that have been approved by Ben & Jerry’s company and the shop can only be used for selling products to customers.
Between these two ice cream shops, there are many similarities and differences. Baskin Robbins seems to be very less strict, cheaper, and easier for a franchisee to operate but Ben & Jerry’s is almost the exact opposite. Ben & Jerry’s is more money, has very strict regulations depending on which shop is being operated and there are many more requirements to qualify for the position of a franchisee. Baskin Robbins will financially assist while Ben & Jerry’s will not help financially and will only do so much when it comes to fees and services. But one common difference, in my opinion, is the reputation of their products. Baskin Robins, from my personal experience, is not as popular or well-liked but Ben & Jerry’s is worldwide, found in all grocery stores, and has a good reputation for having quality ice cream. I think because of these reputations each ice cream store holds, their ability to have franchises are different. Some similarities between these two are obviously the products that are being sold and that the company wants franchisees who are enthusiastic, good at advertising, and are friendly to the community and can connect with customers. Their goals are very similar and the training to be done is also very similar.
Personally, if I were to be a franchisee for any of these two stores, I would want to work for Ben & Jerry’s but realistically I could only afford to operate Baskin Robbins. I love the Ben & Jerry’s brand and what it stands for but after doing the research I realize that it is a lot more money and it takes special skill from an entrepreneurial standpoint that I don’t have yet. Ben & Jerry’s requires you to be very individual and handle things on your own without much assistance from the company and if this was my first franchise experience, I would not do very well. Baskin Robbins, on the other hand, seems to be an easier route to go and there is less pressure to perform as well because of all the help the company is providing.