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Interested in Baskin Robbins, but concerned about health trend will take away market share, any comments

is it a good business? It has been around and stable for many years. your comments are appreciated.

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Answers (3)
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The BAF Group LLC
MD

Cakes are key, I agree! You are correct, that helps get you past the problem with the hour cycles.

I don't know why you don't see them there. In Maryland, I think most of them are co-branded with Dunkin Donuts, and it is a concept that seems to work very well. People that come in for Ice Cream see that Donuts are there and remember that for the next time they want breakfast; people that come in for Coffee and Donuts see the Ice Cream and think about coming back for dessert. Great combination for cross-marketing.

Aug 19, 2009
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San Diego County, CA

thanks Don for the comments. A friend of mine is a Baskin Robbins owner and she owns three. according to her, most profitable part of the business is from cake sale, so it is more like year round revenue source. I don't see any store in our area sells Donuts. Why?

Aug 19, 2009
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The BAF Group LLC
MD

Businesses like that are up and down, with health trends. Some geographic areas are better and more resilient than others. Some businesses are more resilient than others, even within that kind of dessert oriented food service. Everyone thought Frozen Yogurt was going to be the thing that would provide an alternative to Ice Cream that would overcome that concern. But go to any used restaurant supply house that deals in used equipment and you will see how many soft-serve machines are around from Frozen Yogurt stores in most cities, that have closed due to a lack of demand and an oversaturation of outlets.

The problem - as I see it - with Baskin Robbins is not with health trends. There are ups and downs, but that does not seem to kill demand completely. And in your area, you have much more of a potential, year round buying season. But it is only something that lends itself to late afternoon/evening traffic and purchasing. In most areas, you have to keep the store open all day. So, even though your customers routinely come in highest concentrations from 3PM to closing, you have costs to deal with all day.

This is why so many co-branding situations have been introduced, with Baskin Robbins and Dunkin Donuts as prime examples. Dunkin Donuts has its best hours in the morning; Baskin Robbins has its best sales in the late part of the day. If you have to have a staff on site all day, by combining these two brands, you have more of a full day's worth of potential sales activity.

The key with a Baskin Robbins is that its franchise requirements probably make the sales and profit analysis easier to trace, in a more factual manner than a non-branded or non-franchised operation. I would be very careful about looking at the last three years of Tax Returns to understand profitabilty and any cycles in demand that might have occured. I would also look for month-to-month sales records, so that you can understand what (if any) seasonality might be involved.

Aug 19, 2009

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