What should I check before buying an ice cream franchise resale?
Before buying an ice cream franchise resale, check how the franchise’s fixed fees and minimum purchases sit against a seasonal sales pattern, which products and equipment must come from approved suppliers, what the location and opening hours require, and whether a refresh of the store is coming.
An ice cream franchise resale combines two things that each need care: a seasonal food business and a franchise agreement with set obligations. The agreement does not change with the weather, but sales do.
Fixed obligations against seasonal sales
Franchise fees, required purchases and marketing contributions may be due even in slow months. Ask the franchisor and seller for a clear schedule of what is owed and when. Then lay it beside monthly sales over several years. Your accountant can show how the obligations land in the weaker months and how the shop has coped.
Approved products, suppliers and equipment
Franchises often require certain products, mixes and machines from named suppliers. Ask what is required, what the supplier’s terms are, and whether the equipment is owned by the shop or supplied. A requirement that limits what you can buy or sell affects your costs, so read it with your lawyer.
Location, hours and the landlord
Many shops sit in malls or busy visitor areas, where the landlord or franchisor sets opening hours and seasonal expectations. Ask what the lease and franchise agreement require, how long the lease runs, and who must approve a transfer. A short lease or a restricted schedule can change how the shop works for you.
Refresh requirements and the general checks
Ask whether the franchisor expects a renovation or equipment upgrade soon, and who pays. Ask your lawyer whether the franchisor must consent to the sale and whether a disclosure document is required; the general pages explain them, including buying a franchise or an independent business.
Related reading
15 pages on the same subject, grouped by topic.
Selling
Buying
- GuideBuying a catering business in Canada
- GuideBuying a retail bakery in Canada
- GuideBuying a butcher shop in Canada
- GuideBuying a wholesale bakery or commissary kitchen in Canada
- Expert answerWhat food licences and inspection rules should a buyer check before buying a bakery in Canada?
- Expert answerWhat should I do in the first season after buying an ice cream shop?
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Due diligence
Sources
This answer is checked against primary sources. Links were last confirmed on the dates shown.
- 01Business Development Bank of CanadaGovernment5 tips to finance a franchise purchase
- 02Canadian Franchise AssociationIndustryFranchise Disclosure Legislation across Canada
- 03Business Development Bank of CanadaGovernmentHow to conduct due diligence when buying a business
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