Frozen Custard Store Profit Potential

Profit Potential Depends on Varying Factors

/Frozen Custard Store Profit Potential
Frozen Custard Store Profit Potential 2018-06-18T09:32:20+00:00

Frozen Custard Store
Profit Potential

As you can imagine, the frozen custard store profit potential can vary widely.

If you’re running a small walk up store from May to November you’ll have markedly different costs and sales numbers compared to a store that sells hot food and coffee along with frozen custard all year around. Typically, the larger the store and more complex the menu, the higher your costs and revenues.

Sales and costs are very difficult to estimate. Our free guide to open a success ice cream store will help provide some guidance on how to estimate these costs. Simply put, the better the location and the more complete the menu, your costs and your sales will be higher.

frozen custard store profit potential

The (not so) secret in the restaurant industry is that once a certain sales volume is reached, profits grow very quickly. The trick is getting to that volume.

Examples of Frozen Custard
Store Profit Potential

Customers Per Month 4,500 6,000 10,000
Average Ticket Sale $5.00 $6.00 $7.50
Monthly Revenue $22,500 $36,000 $75,000
Food Costs (30% of Sales) $6,750 $10,800 $22,500
Labor Costs (28% of Sales) $6,300 $10,080 $21,000
Gross Profit Potential $9,450 $15,120 $31,500

Points We Need to Make
Regarding the Profit Potential Examples

  1. Typically, labor costs will not rise proportionally with sales. Each incremental sale will not result in more hours worked, but better utilization of labor until a threshold is reached and more staff are hired.
  2. In this example, for every $1,000 sales increases, profits increase by at least $400.
  3. The importance of location can be seen by the profit increases as volume increases, even if rents go up significantly.
  4. In smaller stores, much of the labor costs will be paid to the owner as a salary.
  5. Naturally, with our consulting we can achieve points 1 through 4!