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Carvel Franchise ProfileFood Franchises > Ice Cream & Frozen Yogurt |
What Are the Initial Investment Requirements for a Carvel Franchise?
To open a Carvel franchise, you will need to consider a range of initial investment costs. The franchise fee is set at $30,500, while the overall initial investment can vary significantly, ranging from $38,195 to $1,031,500. It's essential to have cash readily available, with requirements between $38,195 and $590,860. Additionally, prospective franchisees must meet a net worth requirement of $300,000 to $500,000 to ensure they are financially prepared for the venture.
What Are the Ongoing Fees Associated with a Carvel Franchise?
Owning a Carvel franchise involves ongoing fees that contribute to the brand's marketing and operational support. Franchisees are required to pay a royalty fee of 6% on gross sales, which helps maintain the brand's presence and operational standards. Additionally, a marketing fee of 2% is assessed to support national and local advertising efforts. These fees are crucial for sustaining the franchise's competitive edge and ensuring continued growth in the market.
What Is the Average Revenue Potential for a Carvel Franchise?
Carvel franchises have a promising revenue potential, with average annual revenues reaching approximately $524,368 per unit. The median annual revenue is slightly lower at $505,958, while revenues can range widely, from a low of $72,994 to a high of $1,645,313. This variability highlights the importance of location, management, and local market conditions in determining a franchise's financial performance.
What Is the Typical Breakeven and Payback Period for a Carvel Franchise?
Franchisees can expect to see a breakeven period of around 9 months, which indicates a relatively quick return on investment compared to other franchises. The investment payback period is estimated at 19 months, allowing franchise owners to recover their initial investment in a reasonable timeframe. This efficiency in recouping costs can make Carvel an attractive option for aspiring franchisees looking for a profitable venture.
Carvel Franchise Financial Requirements
Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.
The minimum total assets (minus liabilities) you must possess.
Net Worth Required:
The estimated period to recoup your total investment.
Investment Payback:
The initial fee paid to join the franchise system.
Franchise Fee:
Ongoing percentage of revenue paid to the franchisor.
Royalty Fee:
Regular contribution toward the franchise’s advertising fund.
Marketing Fee:
The estimated timeframe to recover your initial costs.
Breakeven Time:
The total amount required to launch the franchise.
Initial Investment:
The minimum liquid capital you must have on hand.
Cash Required:
The typical yearly revenue generated per franchise location.
Average Revenue:
The middle value of yearly revenue among franchise locations.
Median Revenue:
The largest reported annual revenue among franchisees.
Highest Revenue:
The smallest reported annual revenue among franchisees.
Lowest Revenue:
A broad sector defining similar types of franchise businesses.
Industry:
A more specific division within the broader industry.
Category:
The key individuals guiding the franchise’s strategy and growth.
Leadership:
The official business address of the franchisor’s headquarters.
Corporate Address:
Available financing options to help start the franchise.
Funding Year:
The main organization that owns the franchise brand.
Parent Company:
Carvel Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2021 | 2022 | 2023 |
|---|---|---|---|
| Total Units | 313 | 328 | 326 |
| Net Change YoY | 15 | -2 | |
| Franchised Units | 313 | 328 | 326 |
| Net Change YoY | 15 | -2 | |
| Corporate Units | 0 | 0 | 0 |
| Net Change YoY | 0 | 0 |
Investment Overview
The initial investment for a Carvel franchise ranges between $38,195 and $1,031,500, making it accessible to a variety of aspiring entrepreneurs. The franchise fee is set at $30,500, with ongoing royalty fees of 6% and a marketing fee of 2%. To qualify, potential franchisees need a cash requirement between $38,195 and $590,860 and a net worth of $300,000 to $500,000.
Revenue Potential
Carvel franchises have demonstrated strong revenue potential, with an average annual revenue of $524,368 per unit. The median annual revenue stands at $505,958, while the revenue range varies from a low of $72,994 to a high of $1,645,313. This broad spectrum highlights the potential for profitability in various market conditions.
Breakeven and Payback
Franchisees can expect to reach breakeven within approximately 9 months of opening their Carvel unit. The investment payback period is estimated at 19 months, allowing franchisees to recover their initial investment relatively quickly, provided they manage operations efficiently and maintain steady sales.
Operational Insights
The average operating expenses for a Carvel franchise total around $389,447, which is approximately 74.19% of revenue. Key expenses include rent, utilities, and management salaries. Understanding these costs is crucial for effective budgeting and financial planning, ensuring that franchisees can maintain profitability.
Franchise Growth
Carvel has shown consistent growth in its franchised units, with 313 units in 2021, increasing to 328 in 2022, and slightly decreasing to 326 in 2023. This stability indicates a resilient business model and a solid franchise support system, appealing to potential investors looking for a reliable opportunity.
Brand Heritage
Founded in 1929, Carvel is a well-established brand known for its soft-serve ice cream and unique frozen desserts. The brand's strong heritage and commitment to quality have made it a favorite among customers, positioning franchisees to leverage brand loyalty and recognition in their local markets.
Frequently Asked Questions
The initial investment for a Carvel franchise ranges from $38,195 to $1,031,500, depending on various factors such as location and size of the unit.