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Dippin’ Dots Franchise Costs & Fees

Date of Incorporation: 1988
Franchising Since: 1999
Headquarters: Paducah, Kentucky

Business Description: Dippin’ Dots Franchising, L.L.C. is the franchisor. Dippin’ Dots franchises sell Dippin’ Dots branded novelty frozen ice cream, yogurt, sherbet and ice products at one of three kinds of locations.

Franchise Offer: The franchisor offers the opportunity to operate a Dippin’ Dots franchised business, which includes (1) the right to operate a fixed location Dippin’ Dots retail ice cream store or kiosk, (2) the right to sell Dippin’ Dots products at one or more events such as fairs, festivals, and similar-type events in a territory, and (3) the right to sell Dippin’ Dots products in vending machines or freezers placed in retail locations in a territory.

Financial Assistance: The franchisor does not offer direct or indirect financing. The franchisor does not guarantee a franchisee’s note, lease or obligations.

Training and Assistance: The franchisor will provide Basic Management Training for up to 2 trainees during a four-day training period (minimum of 7 hours per day) at its offices or a designated Dippin’ Dots business. All trainees must satisfactorily pass the Basic Management Training test to the franchisor’s satisfaction. The franchisor will provide franchisees with opening support, if it deems necessary, for up to two 2 to assist in the opening of the Dippin’ Dots Franchise. The franchisor may provide refresher or additional training programs, seminars or advanced management training for franchisees and their employees at its principal training facility (or any other location it designates provided the other location is closer to the Franchised Business).

Territory: Franchisees will not receive an exclusive territory. The franchise granted to franchisees will permit them to sell Dippin’ Dots products within a specified territory. Except for the possible operation of Doc Popcorn franchises (wholly owned subsidiary of the franchisor’s), neither the franchisor nor any of its affiliates operate or plan to operate or franchise businesses under a different trademark that will sell similar goods or services to those franchisees are selling. The size of each franchisee’s territory is not uniform and will depend on many factors such as location, population density, consumer median income in the territory, the franchisee’s financial resources, and the franchisee’s proximity to other franchisees or other sales avenues.

Term of Agreement and Renewal: The length of the initial franchise term is 5 years. Franchisees may renew the term of this Agreement for 2 additional consecutive terms of 5 years each, if they are in good standing and satisfy certain conditions set forth in the Franchise Agreement.

Obligations and Restrictions: The Franchised Business must be directly supervised by an on-site manager who has successfully completed the Basic Management Training Program (the Manager). The Manager is expected to devote his or her best full-time efforts to the management and operation of the Franchised Business. The Manager is not required to have any equity interest in the Dippin’ Dots Franchise. The Manager cannot have an interest or business relationship in any business competing with DDL, DDF or its franchisees. Any replacement or additional Managers are required to complete Basic Management Training before managing your Dippin’ Dots Franchised Business, unless the franchisor otherwise agrees in writing. Franchisees must offer and sell all goods and services that the franchisor requires for all franchisees. Franchisees must not allow the use of the Premises for any other purpose or activity at any time without first obtaining the franchisor’s written consent. Franchisees must not offer any goods or services without the franchisor’s written consent.

Estimated Number of Units: 200

Investment Tables:
Initial Investment
Name of Fee Low High
Initial Franchise Fee $7,500 $15,000
Store Creation Fee $0 $10,000
Grand Opening Advertising Materials Expenditure $500 $2,500
Credit Card and Gift Card Processing $755 $800
Office and Retail Supplies $100 $500
Opening Inventory $2,500 $5,250
Printing and Signage $499 $5,000
Insurance $1,500 $2,500
Equipment (freezers, etc.) $65,700 $84,900
Leased Warehouse and Cold Storage $5,000 $20,000
20 Ft. Box Truck Monthly Payments to Lease or Own $1,000 $2,000
Travel, Lodging, Meals, Etc. for Initial Training $1,500 $2,500
Real Estate and Improvements $2,400 $120,000
Security Deposit and Prepaid Rent $500 $10,000
Miscellaneous Start-Up Costs $12,500 $32,500
Additional Funds (6 months) $10,250 $63,500
ESTIMATED TOTAL $112,204 $376,950
Other Fees
Type of Fee Amount
Royalty $1.95 per gallon for bulk ice cream products.
$0.09 per unit for prepack units.
Up to 6% on ancillary items (non-Dippin’ Dots manufactured retail food, drink and/or nonfood approved items).
Advertising Fund Contributions $0.24 per gallon for bulk ice cream products.
$0.01 per unit for prepack units.
Up to 2% on ancillary items (non-Dippin’ Dots manufactured retail food, drink and/or non-food approved items).
Regional Advertising Fund Contributions Up to 50% of the contributions made to Advertising Fund.
Additional Training Fees $75.00 per day per person.
Relocation Fee for Relocation of Franchised Business $1,000
Evaluation and Testing of New Approved Supplier Reasonable cost of the evaluation and testing.
Reimbursement of Amounts Paid to Correct Any Deficiencies Actual cost to franchisor.
Replacement Fee for Lost Manuals At least $200
P.O.S. System Transaction Fee $100 - $150 per month.
Late Fee for Sales Reports $2 per day.
Late Fee for Profit and Loss Statement $2 per day.
Interest on Understated Amounts Payable 18% per annum or the maximum rate permitted by law, whichever is less.
Reimbursement of Audit Costs Actual cost to franchisor.
Insurance Coverage Actual cost to franchisor.
Late Fee for Certificates of Insurance $2 per day.
Transfer Fee The lesser of $7,500 or 10% of the sales consideration plus any attorney fees incurred by the franchisor in connection with its review of and processing of the transfer.
For existing Dippin’ Dots Franchisees transferring their interests to an existing Dippin’ Dots Franchisee - The lesser of $1,000 or 10% of the sales consideration per franchise sold plus any attorney fees incurred by the franchisor in connection with its review of and processing of the transfer.
Fee to Add Minority Equity Owner $1,000
Damages, Costs and Expenses Upon Default Actual damages, costs and expenses, including reasonable attorneys’ fees, incurred by the franchisor as a result of the default.
Indemnification Actual cost to franchisor.
Fee for Infringement of Rights of Other Franchisee or customer of DDL $1,000 for first breach.
$2,500 for subsequent breaches.
Franchisee Council Membership Dues $200 per year.

The above information has been taken from the FDD of Dippin’ Dots. Year of FDD: 2016

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