Abbott's Frozen Custard

Food & Beverage

FDD Year: 2021

Item 19 Available

Abbott's Frozen Custard^®

Food & Beverage • Year: 2021

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Business Model Overview

Abbott’s Frozen Custard is a retail franchise operating stand-alone frozen custard stands that sell frozen custard, soft drinks, and other desserts and food-related products. Franchised Stands operate under Abbott’s proprietary System and Operations Manual, and the franchisor also permits satellite kiosks (temporary or seasonal) that have little or no seating and are intended for carry-out service or delivery. Units are typically stand-alone retail stands used primarily by the motoring public for dessert or refreshment stops, and sales are described as seasonally sensitive to local weather (with enclosed mall locations noted as less affected).

Pros & Cons Analysis

Pros

Very low outlet churn — terminations, non‑renewals, and reacquisitions are substantially below industry averages, indicating strong franchisee retention.

Above‑average unit performance — 55% of outlets attain or exceed average Item 19 results and the median-to-average sales ratio (~1.06) is substantially above peers, suggesting solid/consistent sales.

Low legal and enforcement risk — disclosed lawsuits, pending cases, franchisor enforcement and government penalties are all substantially below industry norms.

Cons

Higher upfront fee — initial franchise fee low range (~$30,000) is substantially above the industry median (~$15,000).

High ongoing training cost — mandatory ongoing training fee (~$2,000) is substantially above peers, increasing recurring franchisor-related expenses.

Limited training/support despite fees — absence of a formal training program and on-site training plus a substantially below‑industry training/support score raises operational and onboarding risk.

Legal Risk Score

100

Excellent

The franchise reported no legal proceedings.

Territory Protection Score

0/100

POOR

The franchisee receives no meaningful territorial protection, which is a major risk for an arrangement without defined territory. Although the franchisor does not reserve rights to shrink the territory for underperformance and will not sell online in the territory, the franchisee lacks a right of first refusal, resulting in a very weak protection score.

Training & Support Score

0/100

POOR

With a training_and_support_score of 0 the program is minimal and limited: no on-site training is provided (a major weakness) and total training hours are a limited number (0 hours). Few or no people are included in the initial fee and the franchisor does not cover living expenses, leaving on-site and hands-on support weak.

Executive Summary

This opportunity is capital‑intensive: a non‑refundable $37,000 initial franchise fee plus substantial build‑out and equipment costs (operational equipment ~$169k–$174k; real estate & improvements ~$102k–$327k) imply a likely total initial investment in the roughly $370k–$675k range. Performance data (Item 19) show average gross sales of $308,593 (median $325,643) across nine franchised stands in 2021 but with wide dispersion ($160k–$528k) and unaudited figures, and no net‑income data provided — a noteworthy variability and a transparency limitation. High‑risk indicators include zero territorial protection, minimal initial training/support (0 hours, no on‑site training) paired with mandatory ongoing training costs ($2,000 paid by franchisees), and required personal guarantees/non‑competes for spouses and partners. Legal exposure appears low (no disclosed proceedings), but corporate cost benchmarks (COGS ~31%, payroll ~28%, operating ~9%) imply relatively tight margins, making this an operator‑dependent, high‑capital investment with significant operational and territorial risks.

Performance Analysis

The charts show pronounced periods of unit-count volatility for Abbott's Frozen Custard, reflecting an uneven growth trajectory rather than steady expansion. This instability suggests sensitivity to market or operational factors (seasonality, closures, or local competition) and signals execution risk for new owners. Prospective franchisees should probe unit-level economics, churn drivers, and franchisor support to understand whether volatility is cyclical or indicative of deeper structural issues.

Periods of high unit count volatility indicating potential instability

Financial Performance Analysis (Item 19)

Average Gross Sales:

$308,593

Median Gross Sales:

$325,643

High Gross Sales:

$528,455

Low Gross Sales:

$160,391

Sample Size:

Percent Attaining Average:

55.0%

Audited:

Franchise vs Corporate Performance: For FY2021 the nine Designated (franchised) stands reported an average Gross Sales of $308,593 (median $325,643). Corporate (company-owned) stands do not report gross sales in Table 2, but their cost structure for FY2021 averaged: COGS 31%, Payroll 28%, Operating expenses 9% and Administrative 3%. The franchised sample shows top-line scale (several locations > $300k) while corporate data provide percent-of-revenue expense benchmarks franchisees can use for planning.

Performance Variability Analysis: There is substantial variation across the nine Designated Stands in 2021 (range $160,391 to $528,455; high/low ratio ≈ 3.29). The mean ($308,593) is below the median ($325,643), indicating a somewhat skewed distribution with multiple lower-performing stands and a few higher outliers (Stand H at $528,455). In 2021 five of nine stands (55%) met or exceeded the average; four of nine (44%) met or exceeded the median, showing meaningful performance dispersion among stands.

Data Scope and Limitations: The FY2021 gross sales data cover nine Designated franchised stands selected as most similar to the offered business; all were open at least 12 months as of Oct 31, 2021. The franchisor states the figures were provided by franchisees and were not audited or independently verified. Notes: COGS figures include an imputed 5.5% royalty and operating expenses include imputed advertising contributions. Net income/profit figures are not provided in Item 19. Written substantiation of the underlying data is available upon written request.

Investment Requirements

Total Outlets:

Company Owned Units:

Franchised Units:

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