The dessert industry, especially frozen dessert products, is quite popular, and there are many different franchise brands in operation in this industry, like Pinkberry.
If you want to own a frozen dessert franchise store and have been looking around, you might be thinking about Pinkberry as they are popular, have good profitability, and have low entry points cost-wise.
In this article, we will talk about Pinkberry, its franchise system, associated costs, and any other things related to its franchise system. You will have an idea of whether it’s worth owning a Pinkberry franchise or not.
About Pinkberry and Pinkberry History
Pinkberry is an American frozen dessert franchise restaurant headquartered in Arizona, United States. The store specializes in frozen yogurts, and they allow customers to customize their frozen yogurts with a variety of toppings.
The company was founded in 2005 and started to franchise in 2006, and they are still actively franchising.
Currently, the company has over 260 stores in around 20 countries. They have been franchising actively since 2006 with a very established franchise program and relatively low startup costs.
They are right now one of the most popular and biggest frozen dessert franchises focusing on frozen yogurt.
Franchise Model Table
| Cost Or Fees | Amount |
|---|---|
| Initial Investment | $269,440-$607,050 |
| Franchise | YES |
| Franchising Since | 2006 |
| Franchise-Fee | $35,000 |
| Royalty-Fee | 6% |
| Liquidity | $125,000 |
| Estimated Outlets | 260 |
How Much Does It Cost To Open A Pinkberry Franchise?
The total average cost to open a Pinkberry Franchise is between $269,440 and $607,050. This expected cost includes the franchise fee, which is $35,000, and all other related startup costs.
Based on your choice to lease or buy a rental property, the costs will change significantly. They could go higher than the expected average.
Franchise Requirements
In broader terms, Pinkberry is looking for franchisees who have proven leadership skills and the necessary financial resources. The financial requirement is a minimum of $125,000 liquidity and a $250,000 minimum net worth.
To prove your leadership skills, you need to have strong management experience, live in the neighborhood where you want to open the store, and have the capacity to manage extensive operations.
Profit & Revenue Of Pinkberry
The company’s annual revenue for the fiscal year of 2022 was $263 million. In the same year, the company’s net profit after taxes and all other expenses was $19 million. This represents about a 7% profit margin for the company.
Pinkberry Franchise Overall Sales
The average gross sales of a Pinkberry franchised store are around $509,707 annually. This number is the average of all Pinkberry stores that have been in operation continuously for at least 12 months.
How Much Does Pinkberry Franchise Owner Make?
There is no information about the franchise owner’s salary, which is the net revenue per franchised store. However, we know that the company’s profit margin is 7%.
By using this average number, we can estimate that a Pinkberry franchise owner’s salary could be $35,679 annually. This is just an estimation, and the actual number might be different.
This is how we calculated this amount:
| Financial Overview | Percentage of Revenue | Amount ($) |
|---|---|---|
| Individual Franchise Annual Revenue | 100% | 509707.00 |
| Rent | 11.63% | (59253.44) |
| Insurance | 5.81% | (29626.72) |
| Salaries | 23.25% | (118506.88) |
| Franchise Royalty Fees | 5.81% | (29626.72) |
| Utilities | 2.33% | (11850.69) |
| Cost of Goods Sold (COGS) | 29.06% | (148133.60) |
| Labor (Variable) | 15.11% | (77029.47) |
| Total (Expenses) | 93.00% | (474027.51) |
| Net Profit | 7.00% | 35679.49 |
Note: The displayed expenses are estimates based on industry averages and standard costs. Actual expenses may vary due to factors like location, business size, and market conditions. We recommend conducting detailed research or consulting with a financial advisor for a tailored financial analysis.
Payback Period Of Pinkberry Franchise
With an investment of $607,050 and an estimated 7% profit on the average net sales, the yearly profit would be $35,679.
So, to find out how long it will take to earn back the initial investment:
Payback Period = Midpoint Investment / Yearly Profit = $607,050 / $35,679 = 17.1 years
Based on these figures, it will take approximately 17 years to pay back the initial investment for Pinkberry. This time period could be longer or shorter depending on your sales, revenue, and profit figures.
Failure Rate Of Pinkberry Franchise
Franchised Outlets:
| Year | Outlets at the Start of the Year | Outlets at the End of the Year | Net Change |
|---|---|---|---|
| 2020 | 80 | 73 | -7 |
| 2021 | 73 | 72 | -1 |
| 2022 | 72 | 64 | -8 |
For the Franchised outlets:
- In 2020, the failure rate was (7)/80×100≈8.75%
- In 2021, the failure rate was (1)/73×100≈1.37%
- In 2022, the failure rate was (8)/72×100≈11.11%
According to the above-mentioned data, we can see that the franchised outlets for Pinkberry declined from 2020 to 2022, showing a failure rate between 8.75% and 11.11%.
This shows that it is risky to invest in the franchise as there are more closures than the new openings.
Training and Support Of Pinkberry Franchise
The franchisee and a designated manager will get an initial training program that consists of 80 hours of on-the-job and 40 hours of classroom training.
The classroom training takes place in their headquarters, and on-the-job training takes place in a designated restaurant.
The franchisor sends a representative in the first couple of days of the restaurant’s operation to work with the franchisee and help with the grand opening.
They may provide additional training as part of their support package. They also give marketing support to franchisees in whatever they might need.
Terms of Agreement and Renewal
The term of the initial agreement is typically for 10 years. After the initial 10 years, there is an option to renew it if both parties agree to it and the franchisor is satisfied with the franchisee. The renewal is for a single term of five years.
Obligations and Restrictions
The franchised store must be operated by the franchisee, partner, shareholder, or a member of the business’s organization. There has to be at least one designated manager in the store that oversees the daily operations on a full-time basis.
The location of the store cannot be used for any other purposes than a Pinkberry restaurant. Traditional Pinkberry franchised stores must offer the complete menu described by the franchisor.
Financial Assistance
Pinkberry doesn’t offer direct or indirect financial assistance or any kind of financial agreement to help the franchisee open their store.
The franchisee is obligated to find all the necessary funding except for when the franchisee buys a corporate store as-is. Then, the franchisor handles the lease cost agreements.
Pinkberry Comparison
| Name | Franchise Fee | Royalty Fee | Initial Investment |
|---|---|---|---|
| Menchie’s Frozen Yogurt | $40,000 | 6% | $219,116-$457,446 |
| Yogurtland | $35,000 | 6% | $182,500-$486,000 |
| Pinkberry | $35,000 | 6% | $269,440-$607,050 |
Conclusion
Pinkberry is an American frozen dessert franchise store with a presence across 20 countries apart from the United States. They have over 260 stores worldwide and are one of the most famous names when it comes to frozen yogurt.
An average franchised store makes $509,707 in overall annual sales, which is quite a high number compared to other frozen yogurt franchises.
They offer a solid foundation for new franchisees with established training and support systems, which makes them an attractive brand for entrepreneurs.
he entry costs are low, which allows any level of entrepreneur to get started with Pinkberry. If you can cover the requirements both financially and professionally, Pinkberry could be a lucrative opportunity.
FAQs
What is the Pinkberry franchise fee?
The Pinkberry franchise fee is $35,000. It is a fee that you pay when you sign the agreement before any other fees.
Do I need to have prior experience to open a Pinkberry franchise?
You don’t need to have experience with Pinkberry itself, but you need to have managerial experience, preferably in the same industry as Pinkberry, but not necessarily.
Who owns Pinkberry?
Kahal Brands acquired Pinkberry in 2015 as their 18th brand. This is due to the poor sales and over-expansion of the company.
Where is Pinkberry headquartered?
The headquarters of the frozen dessert restaurant is located in Scottsdale, Arizona.
Who founded Pinkberry?
Pinkberry was founded by Young Lee and Hye Kyun (Shelly) Hwang. They opened their first store in January 2005.
How many locations does Pinkberry has?
Pinkberry is a franchise of frozen desserts that has over 260 stores operating in 20 countries.
Sources
https://www.yogurtland.com/franchise
https://www.franchimp.com/?page=pdf&f=108312_2023.pdf