Review of the Menchies Franchise Opp and Startup Costs

Did you know that 9 out of every 10 households in the United States regularly eat frozen desserts? With a Menchie’s franchise, you get the ability to invest into this niche food market in a unique way, providing people with a self-service frozen yougurt franchise that serves up smiles just as fast as it serves up frozen desserts. With numerous franchise industry awards and a lot of growth happening in this niche, the current market sits at $8 billion in the US alone.

Are you ready to explore how a Menchie’s franchise could expand your portfolio and provide you with an exciting way to make money?

What Are the Initial Investment Costs To Consider?

If you want to get involved into this niche food market, then joining the world’s largest provider of frozen yogurt makes a lot of sense. It begins with your initial investment of $40k in a franchise fee and this is due in certified funds at the time of the franchise agreement being signed. In addition to this franchise fee, a development services fee of $1,920 is also due at the time of the agreement being signed.

Menchie’s has some operational standards that will incur fees for you as well during the initial start-up phase of your new franchise that are payable directly to the organization when that occur. Those fees are:

Uniforms, Merchandise, Equipment, and Sales. This $3,000 fee is required to be paid in certified funds and must be paid before your franchise is able to begin its grand opening.
Technology. This $240 fee is due at the time of installation.
Inspection. The organization requires that your new location be fully inspected for quality control purposes before you can open to the general public. This fee can be as much as $1,500, but may also be waived at the discretion of the organization.

With everything considered, the low estimate for total start-up costs averages out to about $330k. It may be as low as $218k in some specific circumstances, but could be as high as $385k if expenses reach near the high end of the estimate. In order to qualify, you’ll need a net worth of at least $450k, liquid assets of $100k, and good enough credit to qualify for a Small Business Administration loan if needed.

That’s right – Menchie’s is on the SBA registry. That means alternative sources of financing can be utilized in order to get the organization off of the ground. That may include home equity lines of credit or even self-guided IRAs that allow you to begin the business with pre-tax money without any penalty whatsoever. The length of time for the franchise agreement is 10 years and the agreement is renewable for two additional 10 year terms if desired.

Royalties also apply. There is a 6% gross royalty that must be paid to the organization and a 2% marketing fee on top of that. You’ll also be responsible for a local advertising fee of $4k and the purchase of the operations manual is $500 and required whenever it is updated.

What Kind of Support Is Provided By Menchie’s?

The training that you’ll receive as a Menchie’s franchisee is customized to the level of support that you may need. The standard training includes the the operating partner of the franchisee and one of the manager-level employees that have already been hired. It takes place over the course of 14 days at company headquarters and is an all-encompassing look at what it takes to run a franchise location for this organization.

This training time can be extended at the discretion of the organization based on the performance of you and/or your employees that are training alongside you. If this is decided as mandatory, then the additional training costs fall outside of the franchise fee and you will be responsible for a maximum amount of $500 per day per employee being trained.

The location of your franchise must also be approved by the home organization and there are protected territories for each franchise. The boundaries are dependent on local population size and boundaries and will be outside of at least a two mile circle of the main entrance of each store. Once approved, a representative from Menchie’s will spend time with the staff of your store to facilitate training across the board for your franchise, conduct final inspections, and help with the grand opening of the store.

To maintain the cutting edge in this multi-billion niche food industry, Menchie’s also periodically runs ongoing training sessions and at least the operating partner must attend these training courses for the franchise agreement to remain valid.

Is This the Right Investment To Make?

Although there are a number of fees that occur with this franchising opportunity, there are also numerous opportunities to reach profitability very quickly in this industry. The sales performance of many Menchie’s locations over time show an average net operating income over about $100k per year, including royalties, payroll, and miscellaneous fees. How each franchise performs is variable, however, and no guarantee of profitability can be made according to US law.

The highest priority for new franchisees will come from natural leaders who are looking to establish family businesses. It’s also perfect for those who are looking to diversify an already successful portfolio and are passionate about expanding the brand, providing an excellent product to their customers, while also working to establish a local community presence.

What’s best about having a Menchie’s as a franchisee is the fact that it is a simple business model for the food industry. There is nothing to cook, no speed requirements during a meal rush, and a large number of employees are not required to make this business run. Your customers will make their own desserts, serve themselves, and this minimizes staffing mistakes that can be costly for a business owner.

Watch the franchisee interviews, speak with the organization yourself, and see if this really could be the right investment to make!