Milkshake Factory
Milkshake Factory offers handspun milkshakes, gourmet chocolates, and craft sundaes through independently operated shops. Known for creative shakes and desserts, it operates in the quick-serve restaurant sector.
Milkshake Factory franchise FAQ
How much does it cost to open one — the total initial investment?
The total estimated initial investment to open one Shop ranges from $510,492 to $772,548. This includes a payment of $68,500 that must be paid before opening [p.1].
What is the initial franchise fee?
The initial franchise fee is $60,000, which must be paid in full upon the execution of your Franchise Agreement. This fee is deemed fully earned and non-refundable upon payment [p.8, p.71].
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is based on a percentage of Adjusted Gross Sales. For the first year of operations, it's 6% of Adjusted Gross Sales; for the second year, it's the greater of 6% of sales or $1,200 per month; and for the third year and onwards, it's the greater of 6% of sales or $1,500 per month. This fee is due on or before the fifth day of each operating month [p.72]. Additionally, franchisees must make minimum royalty payments regardless of their sales levels, as specified in mandatory minimum payment requirements [p.4].
How long is the initial franchise agreement, and can I renew it?
The initial franchise agreement generally lasts for 10 years [p.149]. You may submit a request to renew this Agreement for up to two additional, consecutive terms of 10 years each, provided you comply with certain conditions [p.70].
Can I sell or transfer my franchise, and what does that require?
According to the FDD, you cannot freely transfer ownership of your franchise without the franchisor's permission, except for good cause. Good cause includes but is not limited to specific reasons determined by the franchisor [p.162]. Compliance with applicable state and federal laws governing the offer and sale of franchises is also required [p.99].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement if there is a failure by the franchisee to comply with any lawful provision of the franchise agreement and such failure is not cured within a reasonable period, which cannot exceed 30 days [p.162]. Additionally, termination must be based on reasonable cause as defined under Virginia Retail Franchising Act or Virginia law; otherwise, it may not be enforceable [p.172].
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts. The FDD does not provide specific financial requirements such as net worth or liquid capital that you need to meet to qualify as a franchisee.
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 or competitive brands that the company controls [p.37]. Your Designated Territory provides certain protections while operating a Shop within it, but you do not have territorial rights outside this area unless specifically provided for in your agreement [p.69].
What training and ongoing support does the franchisor provide?
The franchisor provides both on-site and virtual training as part of the initial onboarding process. On-site training consists of approximately 8 hours that include online lessons, live webinar sessions, and real-time interaction with trainers. Additionally, franchisees can request further on-site assistance at their own expense if needed [p.29]. Ongoing support includes adherence to recommended procedures in areas such as marketing, advertising, and operations [p.71].
How many franchised outlets are there, and how many have closed or been terminated?
This isn't specified in the excerpts.
Does the franchisor share any financial performance or earnings information?
The franchisor may provide actual records of an existing outlet if you are considering purchasing it. Additionally, they can supplement the information provided in Item 19 with possible performance data at a specific location or under certain circumstances, but only if there is a reasonable basis for this information [p.49]. However, the franchisor does not make any representations about future financial performance or past performance of company-owned or franchised outlets, and they do not authorize their employees or representatives to make such claims either orally or in writing [p.56].
What am I restricted to selling, and where must I buy supplies?
You are generally allowed to decide what to sell, but you may have restrictions on operating a similar business during the term of the franchise [p.3]. For supplies, while you can usually buy or lease equipment, fixtures, and supplies from any source including the franchisor and affiliates [p.23], some items must be obtained only from their Approved Suppliers, which could include them and their affiliates [p.23].