Tipsy Scoop
Tipsy Scoop offers liquor-infused ice cream and frozen desserts in individual or multi-unit franchises. Known for its unique specialty ice cream shop concept, Tipsy Scoop operates in the specialty food services and drinking establishments industry.
About Tipsy Scoop
Tipsy Scoop is an ice cream company. It was established by Melissa Tavss in New York in 2013 and operates a chain of parlors.
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Tipsy Scoop franchise FAQ
How much does it cost to open one — the total initial investment?
The estimated initial investment for the development of one Tipsy Scoop Shop under a franchise agreement ranges from $66,564 to $84,564 [p.21 Note 2]. This amount must be paid to the franchisor or its affiliates as part of the total investment necessary to begin operation, which is between $223,680 and $347,791 [p.1].
What is the initial franchise fee?
The initial franchise fee is $45,000 and it is non-refundable [p.11, p.18]. This fee applies to a single franchise under a Franchise Agreement [p.18].
What are the ongoing royalty and advertising fees?
The ongoing royalty fee is a weekly payment equal to 5.5% of the franchisee's weekly Gross Sales [p.119, p.15]. Additionally, there is a requirement to contribute up to 3% of weekly Gross Sales to the Brand Development Fund, currently set at 1% of weekly Gross Sales [p.31]. This fund is used for various marketing and development activities but does not directly promote individual shops or their local markets [p.31].
How long is the initial franchise agreement, and can I renew it?
The duration of the initial franchise agreement isn't specified in detail within these excerpts. However, you have the option to renew the franchise for one additional 10-year term under certain conditions, as stated on page [p.147]. This renewal is not available if the Franchised Business was previously operated or developed pursuant to a prior Franchise Agreement with the franchisor or its predecessors.
Can I sell or transfer my franchise, and what does that require?
Yes, you can sell or transfer your franchise, but it requires approval from the franchisor. The franchisor may refuse to approve a transfer for good cause, which includes not meeting the franchisor's standards at the time of transfer [p.231]. Additionally, the proposed transferee must meet certain criteria such as having good moral character, sufficient business experience, and financial resources, and they cannot own or operate a competitive business [p.143].
On what grounds can the franchisor terminate the agreement?
The franchisor can terminate the agreement on any grounds available by law [p.234]. Additionally, the franchisor may terminate if you fail to comply with any lawful provision of the franchise agreement and do not cure such failure after receiving written notice and a reasonable opportunity (no more than 30 days) to do so [p.5; p.230].
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 requirements for a prospective franchisee's net worth or liquid capital. However, it does mention that if the franchisor’s most recent financial statements are unaudited and show a net worth of less than $100,000, you may request escrow of initial investment funds until certain obligations are fulfilled [p.231].
Do I get an exclusive or protected territory?
You do not receive an exclusive territory [p.36]. However, during the term of the Franchise Agreement, provided you comply with your obligations, the franchisor will not establish another Tipsy Scoop Shop within your Designated Territory [p.36].
What training and ongoing support does the franchisor provide?
The franchisor provides an initial Training Program which includes classroom and on-the-job instruction, potentially conducted remotely through online web-based conferencing [p.117]. This program is structured by the franchisor and may be completed in phases. Franchisees are also required to provide ongoing training for their employees that must conform to the franchisor's standards [p.117].
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 does not make representations about a franchisee's future financial performance or the past financial performance of company-owned or franchised outlets [p.53]. However, if you are purchasing an existing outlet, the franchisor may provide actual records of that outlet [p.53]. Additionally, the franchisor is permitted to provide financial performance information if there is a reasonable basis for it and it is included in the Disclosure Document [p.48].
What am I restricted to selling, and where must I buy supplies?
You are required to exclusively offer and serve the Approved Products and Services as specified by the franchisor [p.127]. Additionally, you must purchase or lease certain source-restricted goods and services from approved or designated suppliers, including your exclusive use of System Supplies purchased from the franchisor or its designated suppliers [p.3, p.22].