Abbott's Frozen Custard

Food & Beverage

FDD Year: 2023

Item 19 Available

Abbott's Frozen Custard^®

Food & Beverage • Year: 2023

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Business Model Overview

Abbott’s Frozen Custard is a retail frozen custard franchise offering frozen custard, soft drinks and other desserts and food-related products under its proprietary recipes, marks and operating system. Franchisees operate stand-alone Abbott’s Stands (and may operate satellite kiosks) serving customers via walk-up/carry-out, with optional indoor seating and franchisor-encouraged drive-through service; satellite kiosks are intended for carry-out or delivery. Typical locations are stand-alone retail frozen custard stands used primarily by the motoring public, with the system permitting various configurations and occasional placement in enclosed malls or as temporary satellite kiosks.

Pros & Cons Analysis

Pros

Very low outlet terminations and non‑renewals relative to industry (SUBSTANTIALLY_BELOW) — indicates strong unit stability and likely steadier franchisee revenue/profitability.

Low legal and regulatory exposure (lawsuits, pending cases, settlements, govt penalties, enforcement, fraud all SUBSTANTIALLY_BELOW) — reduces litigation risk and unexpected costs.

Large territory sizes (territory_size_value SUBSTANTIALLY_ABOVE) — provides greater market opportunity and potential for higher sales/growth per franchisee.

Cons

High ongoing support and mandatory training costs (on_site_support_cost_amount and cost_of_mandatory_ongoing_training SUBSTANTIALLY_ABOVE) — increases operating expenses.

Elevated initial franchise fee (initial_franchise_fee_low_range SUBSTANTIALLY_ABOVE) — raises upfront capital required and can lengthen payback period.

Spouse required to sign a non‑compete (RARE_FEATURE) — adds a restrictive contractual obligation that may complicate hiring/household arrangements.

Legal Risk Score

100

Excellent

The franchise reported no legal proceedings.

Territory Protection Score

23/100

POOR

Franchisee receives a protected but not exclusive territory; however, the franchisor can reduce the territory for non‑performance and may sell online into the area, while the franchisee lacks a right of first refusal on nearby opportunities. These limits explain the low score, resulting in a weak level of protection.

Training & Support Score

46/100

NORMAL

With a score of 46.5, Abbott's Frozen Custard offers a standard, adequate training program that emphasizes on-site support but delivers a limited number of total training hours (63). On-site assistance covers up to three people under the initial fee, but on-site support carries additional franchisor charges, a notable downside.

Executive Summary

Abbott’s Frozen Custard is a small, 25‑unit retail-stand system with a $37,000 non‑refundable initial franchise fee but materially expensive startup requirements — operational equipment ($212k–$252k), real estate/improvements ($110k–$365k) and additional build‑out, design, inventory and 3‑month reserves (design $14k–$22k; inventory $14k–$23k; extra funds $25k–$50k). Reported Item 19 results show an average 2022 gross of $326,680 (median $284,198) across nine franchised stands, yet only 44% reached the mean and variability is high; corporate drive‑through sites materially outperformed franchised stands (~$611k–$721k), so site type and location appear to be primary revenue drivers. Key risk factors include weak territory protections (franchisor can sell online into or reduce territories), mandatory ongoing training and charged on‑site support (e.g., $2,000), and required personal guarantees from spouse/partners; the disclosure lists no litigation, but the combination of performance dispersion and limited territorial safeguards is a noteworthy risk indicator.

Performance Analysis

The charts show periods of high unit-count volatility for Abbott's Frozen Custard, with sharp rises and declines rather than steady growth, signaling potential instability in expansion and franchise retention. Prospective franchisees should understand the brand's trajectory has been uneven and should probe unit-level performance, causes of churn (market demand, operational support, or territorial issues), and the franchisor’s plan to stabilize growth before committing.

Periods of high unit count volatility indicating potential instability

Financial Performance Analysis (Item 19)

Average Gross Sales:

$326,680

Median Gross Sales:

$284,198

High Gross Sales:

$554,533

Low Gross Sales:

$209,106

Sample Size:

Percent Attaining Average:

44.0%

Audited:

Franchise vs Corporate Performance: Designated franchised stands (Table 1) had an average gross sales of $326,680 in 2022 (median $284,198). By contrast, the two corporate drive-through stands reported much higher 2022 gross sales (Stand L: $611,305; Stand M: $721,265 in Table 2). This indicates that corporate drive-through locations materially outperformed the typical designated franchised stand in 2022, suggesting site type (drive-through vs. non-drive-through) and ownership model are important revenue drivers.

Performance Variability Analysis: There is significant dispersion across the nine designated franchised stands: range = $554,533 (high) − $209,106 (low) = $345,427, and only 4 of 9 stands (44%) met or exceeded the 2022 average. The median ($284,198) is below the mean ($326,680), indicating the mean is pulled up by higher-performing outliers. This implies substantial location-to-location variability — prospective franchisees should expect outcomes to differ materially from the average.

Data Scope and Limitations: Sample sizes are small and segmented: Table 1 contains 9 designated franchised stands (2022); Table 2 shows 4 drive-through stands but 2022 data for two franchised drive-throughs (J and K) were unavailable (marked '**'), so no 2022 average/median could be provided for that group. The disclosure states the gross sales figures were provided by franchisees and have not been audited or verified, while the expense percentages in Tables 3a/3b are audited. Key metrics not provided here include average net income (not reported), and fixed/real-estate costs are excluded from the operating expense percentages.

Investment Requirements

Total Outlets:

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