Milkshake Factory Franchise
Audited FinancialsRisk Score
Pending analysis
Investment Range
$510,492 - $772,548
Franchise Fee
$35,000
Min Cash Required
$15,000
Total US Locations
14
Business Summary
Milkshake Factory Franchise, LLC operates quick-serve shops that specialize in hand-spun milkshakes, gourmet chocolates, craft sundaes, and related desserts. These shops operate from traditional commercial or retail locations, featuring a counter-serve model and a distinctive system that includes unique recipes, design, décor, and operational procedures. Milkshake Factory Franchise, LLC also permits approved delivery services for its products.
Corporate History
Milkshake Factory Franchise, LLC was formed as a Delaware limited liability company on December 29, 2022, with its main business in Ann Arbor, Michigan. The company began offering franchises for quick-serve milkshake shops in May 2023. While Milkshake Factory Franchise, LLC itself does not directly operate similar businesses, its affiliate, The Milk Shake Factory, LLC, was organized in December 2010. Another affiliate, Milkshake Factory IP, LLC, was formed in December 2022 and holds the trademarks and intellectual property licensed to franchisees.
Financial Overview
Investment Range
$510,492 - $772,548
Franchise Fee (Low)
$35,000
Franchise Fee (High)
$60,000
Minimum Cash Required
$15,000
Royalty %
6%
Marketing %
2%
Equipment Costs (Low)
$346,365
Equipment Costs (High)
$554,335
Working Capital
$27,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion, Going concern qualification
Financial Health Notes
The financial statements for Milkshake Factory Franchise, LLC show a net loss of $1,864,406 for the year ended December 31, 2024, and a members' deficit of $2,314,614 as of that date. The auditors have noted these conditions raise substantial doubt about Milkshake Factory Franchise, LLC's ability to continue as a going concern. However, the company's members have historically provided necessary working capital and pledged to continue their financial support through April 15, 2026, which management believes will allow operations to continue.
Financing Details
Milkshake Factory Franchise, LLC does not offer any direct or indirect financing to its franchisees, nor does it guarantee any franchisee obligations.
Performance Metrics
Total US Locations
14
Franchised Units
4
Corporate Units
10
Avg Square Footage
1,550
Franchising Since
2023
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Summary
Milkshake Factory Franchise, LLC has no litigation to report in Item 3 of its Franchise Disclosure Document. This means Milkshake Factory Franchise, LLC has not been involved in any material litigation cases that require disclosure.
Bankruptcy History
Milkshake Factory Franchise, LLC has no bankruptcy history to report in Item 4 of its Franchise Disclosure Document.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
To renew their franchise agreement, Milkshake Factory Franchise, LLC franchisees must meet several conditions: they must not have any uncured material defaults (including monetary ones) under their agreement or with their landlord, and they must not have received more than three written notices of material default in the 12 months before the renewal request or date. Franchisees also need to be in good financial standing, have continuous possession of their approved location, complete any required renovations or modernizations to meet current brand standards, pay a $10,000 renewal fee, sign Milkshake Factory Franchise, LLC's then-current franchise agreement (which may have different terms), complete a refresher training course, and execute a general release of claims in favor of Milkshake Factory Franchise, LLC and its related parties.
Training & Support Program
Franchisor Assistance
Milkshake Factory Franchise, LLC provides extensive support to its franchisees. Before opening, it offers site selection guidelines and assistance, reviews and approves lease agreements, defines the designated territory, and provides lists of approved products, suppliers, and required items. Milkshake Factory Franchise, LLC also reviews and approves signage, layout, design, equipment, furniture, and fixtures. Franchisees and a leadership-level individual must complete an initial training program, which includes 16 hours of classroom training, 45 hours of technical on-the-job training, and up to 40 hours of on-site pre-opening support at their shop. This training occurs at corporate locations in Ann Arbor, Michigan, or Pittsburgh, Pennsylvania, or virtually, and on-site at the franchisee's shop. After opening, Milkshake Factory Franchise, LLC may require additional or refresher training, offer continuing consultation and advice, and approve or deny advertising materials. It also administers a brand development fund, conducts inspections and audits, and may host annual conferences. The company researches new recipes, products, and services, and updates operational manuals and website listings for franchisees.
Initial Training Hours
101
Training Location
Ann Arbor, MI, Pittsburgh, PA, or franchisee's shop
Ongoing Support
After opening, Milkshake Factory Franchise, LLC may require franchisees and their general managers to attend annual additional or refresher training courses. It also provides continuing consultation and advice regarding business management and operations, delivered via telephone, facsimile, or intranet. Milkshake Factory Franchise, LLC reviews and approves all advertising and marketing materials used by franchisees and evaluates requests for non-approved products or alternative suppliers. The company may schedule and require attendance at annual conferences. Franchisees' contact information is displayed on Milkshake Factory Franchise, LLC's website, and the company administers a brand development fund. Inspections and audits are conducted to ensure compliance with system standards, and operational manuals are periodically updated. Milkshake Factory Franchise, LLC also researches new recipes, products, and services for the system.
Franchise Requirements
Ideal Candidate Profile
Milkshake Factory Franchise, LLC seeks qualified individuals or entities who are committed to operating their shop. Franchisees are encouraged, but not required, to personally supervise their shop on a full-time basis. If a franchisee does not operate full-time, they must hire an approved General Manager who has successfully completed Milkshake Factory Franchise, LLC's initial training program or has equivalent experience. Milkshake Factory Franchise, LLC also offers a discount on the initial franchise fee to honorably discharged veterans of the U.S. Armed Forces.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
Full-Time
Territory Type
Non-Exclusive
Territory Size Requirements
Milkshake Factory Franchise, LLC typically defines a designated territory as a two-mile radius around the franchisee's approved premises. In major metropolitan downtown or densely populated areas, the territory may instead be defined by a population size of 75,000 people. The boundaries can also be described using zip codes, streets, landmarks, or county lines, and will be specified on a map.
Staffing Notes
Milkshake Factory Franchise, LLC requires that each franchised shop be managed and staffed at all times by at least one individual who has successfully completed the initial training program. If the franchisee is not the full-time operator, they must engage a General Manager approved by Milkshake Factory Franchise, LLC. For multi-unit owners, each shop must have a properly trained General Manager. All personnel must adhere to Milkshake Factory Franchise, LLC's standards for sanitation, cleanliness, and demeanor, and wear approved uniforms. Franchisees are solely responsible for all employment decisions, including hiring, firing, training, and compliance with all labor laws.