Risk Score
Pending analysis
Investment Range
$79,104 - $386,950
Franchise Fee
$11,250
Min Cash Required
$10,250
Total US Locations
246
Business Summary
Dippin' Dots Franchising, L.L.C. offers franchises to operate businesses selling Dippin' Dots branded ice cream, frozen yogurt, sherbet, and ice products. Franchisees can choose from various models: a Territory franchise allows for one retail store/kiosk, unlimited fairs/festivals, and unlimited vending machines/freezers; a Store Only franchise focuses on a single retail store/kiosk; and a Distribution franchise focuses on vending machines/freezers and catering. Dippin' Dots Franchised Businesses sell products and services to the general public, particularly targeting customers aged 8 to 18, and typically experience seasonal sales variations.
Corporate History
Dippin' Dots Franchising, L.L.C. was originally established as a Kentucky corporation named Dippin' Dots Franchising, Inc. on March 30, 1999. It began selling Dippin' Dots® franchises in the same year. In May 2012, the company converted to a Kentucky limited liability company, then merged into an Oklahoma limited liability company with the same name in November 2012. On June 21, 2022, J & J Snack Foods Corp. acquired Dippin' Dots Holdings, L.L.C., which is the ultimate parent of Dippin' Dots Franchising, L.L.C. The company's affiliate, Dippin' Dots, L.L.C., acquired the Dippin' Dots® trademark out of bankruptcy in May 2012 and manufactures the products. Dippin' Dots Franchising, L.L.C. also offers co-branded franchise opportunities with Doc Popcorn® franchises through its affiliate Doc Popcorn Franchising, L.L.C.
Financial Overview
Investment Range
$79,104 - $386,950
Franchise Fee (Low)
$11,250
Franchise Fee (High)
$35,000
Minimum Cash Required
$10,250
Royalty %
6%
Marketing %
2%
Equipment Costs (Low)
$20,000
Equipment Costs (High)
$84,900
Working Capital
$36,875
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Dippin' Dots Franchising, L.L.C. provides audited financial statements. The most recent audit for the 53 weeks ended September 30, 2023, issued an unqualified opinion, indicating that the financial statements present fairly in all material aspects. A significant point to note is the company's reliance on its affiliate, Dippin' Dots, L.L.C. (DDL), as the sole supplier of novelty ice cream and other frozen products to its franchisees. The balance sheet for September 30, 2023, shows a substantial amount of $6,624,622 in 'Other receivables, related parties,' primarily from DDL for advances received net of expenses. While the 2023 operating cash flow was positive at $99,192, the 2022 financials showed a net decrease in cash of $2,824,655 and negative operating cash flow of $2,840,807, prompting management to evaluate going concern risk at that time. Management elected to eliminate DDL advertising contributions and management fee allocations to the company in October 2023, which could impact future revenues and expenses.
Financing Details
Dippin' Dots Franchising, L.L.C. does not offer any direct or indirect financing to its franchisees. Additionally, it does not guarantee any franchisee's notes, leases, or other financial obligations.
Performance Metrics
Total US Locations
246
Franchised Units
246
Corporate Units
0
Franchising Since
1999
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
Dippin' Dots Franchising, L.L.C. has no litigation history that is required to be disclosed in this Franchise Disclosure Document.
Bankruptcy History
Dippin' Dots Franchising, L.L.C. has no bankruptcy history that is required to be disclosed in this Franchise Disclosure Document.
Agreement Terms
Initial Term
5 years
Renewal Term
5 years
Renewal Conditions
To renew their franchise agreement, Dippin' Dots Franchising, L.L.C. franchisees must provide written notice between three and six months before their current term ends. They must be in good standing, current on all payments owed to the franchisor and its affiliates, and in full compliance with the existing franchise agreement. Franchisees are also required to sign the then-current franchise agreement and other related documents, remodel their Dippin' Dots Retail Venue(s) to meet current brand standards, and pay a renewal fee. The renewal fee is $7,000 for a Territory franchise, $3,000 for a Store Only franchise, or $5,000 for a Distribution franchise. Additionally, franchisees must sign a general release of any claims against the franchisor and its affiliates.
Training & Support Program
Franchisor Assistance
Before opening, Dippin' Dots Franchising, L.L.C. assists franchisees with site selection criteria, reviews and approves their lease, and provides standard plans and specifications for retail venues, including accounting systems, equipment, and design layouts. It also provides lists of required inventory and suppliers, offers basic management training for up to two trainees over four days, and provides up to two days of on-site opening supervision. Once operations begin, Dippin' Dots Franchising, L.L.C. provides ongoing advertising and promotional materials, a confidential operating manual, and promotes the franchise system through an Advertising Fund. It also supports franchisees with periodic visits, offers consultation on operations, advertising, and business methods (additional fees may apply), and provides administrative, bookkeeping, accounting, and inventory procedures. Franchisees are also provided with a point-of-sale (POS) system and an approved credit/debit and gift card acceptance program.
Initial Training Hours
62
Training Location
Paducah, KY/DDF's Offices
Ongoing Support
After opening, Dippin' Dots Franchising, L.L.C. provides ongoing support through various means. This includes making advertising and promotional materials available, loaning a confidential operating manual, and promoting the franchise system using contributions to an Advertising Fund. The franchisor also provides support in improving and operating the Dippin' Dots Franchised Business through periodic visits from its representatives. Franchisees can consult with representatives on matters such as operations, advertising, and business methods, though additional fees may apply for certain consultations. Dippin' Dots Franchising, L.L.C. also continues to provide administrative, bookkeeping, accounting, and inventory procedures, and periodically sends a publication for franchisees. The franchisor may also require franchisees and their employees to attend refresher or additional training programs, seminars, or advanced management training up to twice a year, for which franchisees are responsible for all associated expenses including a training fee of $75 per day per person.
Franchise Requirements
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
hybrid
Owner Participation
supervisory
Territory Type
limited
Territory Size Requirements
Dippin' Dots Franchising, L.L.C. does not define territory size uniformly, instead, it depends on factors such as location, population density, consumer median income, the franchisee's financial resources, and proximity to other sales avenues. For Territory and Store Only franchises, the minimum territory granted would be the shopping mall or general shopping center where the fixed retail store is located. For Distribution Only franchises, there is no minimum territory size. Territories are also subject to a mutually agreed-upon performance plan which outlines the number of 'points of presence' (fixed stores, freezers, events) a franchisee must establish, rather than mandating minimum gross revenue or market penetration.
Staffing Notes
Dippin' Dots requires that each franchised business be directly supervised by an on-site manager who has successfully completed the Basic Management Training Program. This manager is expected to dedicate their full-time efforts to the management and operation of the Dippin' Dots franchised business and is not required to have an equity interest. The manager cannot have an interest in a business competing with Dippin' Dots or its affiliates. Any replacement or additional managers are required to complete Basic Management Training before managing the franchised business, unless Dippin' Dots agrees otherwise in writing. Dippin' Dots offers Basic Management Training for up to two trainees, typically for four days, which an owner or managing partner must attend. Franchisees are responsible for maintaining a competent, conscientious, and trained staff, including at least one fully trained manager. Franchisees must ensure employees uphold good customer relations, provide competent, prompt, courteous, and knowledgeable service, and meet minimum standards, including a neat appearance and compliance with the required dress code. Franchisees are solely responsible for all employment decisions, functions, and proper training of their employees beyond the initial franchisor-provided training.