Abbotts Frozen Custard
Abbots Frozen Custard offers retail frozen custard stands where customers can enjoy frozen custard, soft drinks, and desserts. Known for its creamy custard, the brand operates in the quick-serve restaurant sector of the food service industry.
Abbotts Frozen Custard franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment to open a single Abbott's Stand ranges from $494,200 to $1,796,200. This includes an initial franchise fee of $48,700 to $55,200 and additional costs for opening inventory ranging from $18,000 to $28,000, as well as other expenses such as real estate, improvements, and training costs [p.1, p.10, p.17, p.18].
What is the initial franchise fee?
The initial franchise fee is $37,000, which is payable upon signing the Franchise Agreement and is non-refundable [p.10, p.99].
What are the ongoing royalty and advertising fees?
The ongoing royalties are based on either 5.5% of Gross Sales or 6% of Gross Sales, whichever is greater [p.99]. Advertising fees are not specified in terms of a percentage but are part of the overall franchise fee structure along with the ongoing royalties and franchise fee for each location opened [p.69].
How long is the initial franchise agreement, and can I renew it?
The initial franchise agreement term is not explicitly stated in the provided excerpts. However, if you wish to renew your franchise after the initial term, you must provide written notice of your election to renew between six and twelve months before the end of the term, and Franchisor will review your eligibility based on certain conditions [p.97].
Can I sell or transfer my franchise, and what does that require?
According to the FDD, you can sell or transfer your franchise, but it requires payment. Specifically, a transfer fee equal to two-thirds (2/3) of the prevailing Franchise Fee at the time of such transfer must be paid to cover administrative expenses [p.117]. However, if the transferee is either a corporation formed by you for convenience with you as the sole shareholder or a member of your immediate family, no transfer fee is required [p.117].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement upon any grounds available by law [p.229]. Additionally, the franchisor has the right to reject an operating entity or individual if they assume operations of the franchise unit without prior written consent [p.110].
What financial requirements — net worth and liquid capital — do I need to qualify?
The FDD does not specify exact net worth or liquid capital requirements for qualification as a franchisee. It states that the transferee must demonstrate adequate financial resources and capital to comply with the Development Schedule [p.181], but it does not provide specific figures or details on these financial metrics.
Do I get an exclusive or protected territory?
No, you do not receive an exclusive territory. You may face competition from other franchisees, outlets owned by the company, or other channels of distribution under the same or different Proprietary Marks [p.33]. Additionally, the franchisor retains the right to operate and grant franchises anywhere in the world as they see fit [p.96].
What training and ongoing support does the franchisor provide?
The franchisor provides initial training to the franchisee or their approved personnel in operating equipment, serving products, and other relevant tasks [p.106]. This training must be completed at least ten days before opening the Franchised Unit. The franchisor may also charge for materials used during training and require reimbursement [p.106]. Ongoing support is not detailed in these excerpts, but financial statements raise questions about the franchisor's ability to provide services and support [p.4, p.219].
How many franchised outlets are there, and how many have closed or been terminated?
As of October 31, 2024, there were 24 franchised Abbott's Stands. The FDD does not provide specific information on the number of closed or terminated outlets; thus, this isn't specified in the excerpts.
Does the franchisor share any financial performance or earnings information?
The franchisor may provide financial performance information based on actual records of existing outlets, but it does not make any financial performance representations other than those included in Item 19. If you receive additional financial performance information or projections, you should report it to the franchisor and relevant regulatory agencies as specified [p.49].
What am I restricted to selling, and where must I buy supplies?
You are required to offer and sell only approved products and menu items from the approved location, except as authorized in writing by the franchisor. Additionally, you must purchase all other ingredients, products, materials, supplies, paper goods, and other items required for the operation of the Franchised Business solely from the franchisor or suppliers approved in writing by them [p.21].