How to Finance a Dippin’ Dots Franchise: Co-Brand Costs and Fees
By Marc Cornella
A Dippin’ Dots franchise loan finances a small-footprint dessert business with an unusual fee structure: instead of paying a royalty on Dippin’ Dots sales, franchisees pay for the brand through the price of the product they buy from the company. That detail changes how a lender reads the cash flow.
Below we cover the franchisor’s published costs and requirements, the co-branded format, why SBA lending is generally not the starting point today and how buyers assemble conventional financing.
US Professional Funding is not affiliated with, sponsored by or endorsed by Dippin’ Dots; the name is used only to describe the business. Figures from the franchisor’s disclosure document and website can change, loan programs and terms vary by lender and borrower, and every loan is subject to lender review and approval. Nothing here is legal, tax or investment advice, and buyers should review the current Franchise Disclosure Document (FDD) and franchise agreements with a qualified franchise attorney and accountant.
Dippin’ Dots Franchise Loan at a Glance
- Initial franchise fee: $35,000 per brand, according to the franchisor’s franchising FAQ. A co-brand location receives 25% off the second agreement, for a combined $56,000.
- Veteran incentive: an additional 15% discount for retired and honorably discharged military personnel.
- Royalty on Dippin’ Dots sales: none charged separately; the franchisor says royalty and ad fund fees are built into the price of the product purchased from the company.
- Royalty and ad fund on the popcorn side of a co-brand: 6% royalty and 1% systemwide advertising fund, both on gross revenues excluding Dippin’ Dots sales.
- Estimated total initial investment (co-brand): $119,704 to $366,950, depending on build-out costs and location.
- Financial requirements: minimum net worth of $300,000 and minimum liquid capital of $100,000.
- System size: the franchisor reports over 30 co-brand locations and more than 100 store and shopping center locations, plus 22,000 points of presence across the U.S. through other channels.
- SBA Franchise Directory: Dippin’ Dots is not listed, so conventional financing is the primary route for most buyers.
What Is Dippin’ Dots?
Dippin’ Dots is the beaded ice cream brand created in 1988 by microbiologist Curt Jones, who applied his knowledge of cryogenic technology to flash-freeze ice cream into small beads. The company says an amusement park in Nashville, Tennessee, became the first park to offer the product in 1989, and a production facility opened in Paducah, Kentucky, in 1995. The company is headquartered in Paducah.
The brand grew up in high-traffic, entertainment-driven venues: malls, amusement parks, fairs, festivals and ballparks. A dealer network for fairs, festivals and retail locations followed in 1991, and Dippin’ Dots Franchising was established in 2000. In 2015 the company opened its first co-branded location pairing Dippin’ Dots with its sister gourmet popcorn concept, and in 2022 a publicly traded snack food company acquired both brands.
Not every Dippin’ Dots outlet is a franchise. The company’s 22,000 points of presence include e-commerce, drug and convenience stores, fairs and events. The franchise opportunity is narrower: dedicated store and shopping center locations, especially the co-brand format.
The co-brand model. A co-brand location operates two franchises under one roof: Dippin’ Dots for frozen dessert and the company’s popcorn concept for fresh-popped snacks. That means two product lines, two franchise agreements and two fee structures to understand before borrowing.
How lenders see the brand. Lenders generally see a long-established consumer brand, a modest investment range and a franchisor backed by a publicly traded parent company. But these are small retail units that depend on mall and venue foot traffic, so the location and lease drive much of the credit decision.
Dippin’ Dots Franchise Costs
Initial franchise fee. The franchising FAQ lists a $35,000 franchise fee for Dippin’ Dots and $35,000 for the popcorn concept. When a buyer purchases a co-brand location, the second agreement is discounted 25%, bringing the combined fees to $56,000. Retired and honorably discharged military personnel receive an additional 15% discount. Confirm in the current FDD how and when the fees are paid and whether any portion is refundable.
Lease and build-out. Most franchise locations are inline stores or retail spaces in shopping centers and entertainment properties, so buyers generally lease rather than buy real estate. The franchisor says it has agreements with some of the country’s largest shopping center and entertainment properties and follows a thorough site selection process. Build-out is the main reason the investment range is wide.
Equipment and fixtures. Specialized low-temperature freezers and dipping cabinets are central to the package; a co-brand store adds popcorn kettles, display cases, menu boards and point-of-sale systems.
Opening inventory, training and working capital. Opening product purchased from the company, popcorn ingredients, training, grand opening marketing and early operating reserves round out the budget.
Total investment. The franchisor’s FAQ puts the estimated total initial investment for a co-brand business at $119,704 to $366,950, depending on factors such as build-out costs and location. Item 7 of the FDD breaks that total into line items, typically covering:
- Initial franchise fees for one or both brands
- Leasehold improvements and build-out
- Freezers, dipping cabinets, popcorn equipment and display cases
- Furniture, fixtures, signage and menu boards
- Point-of-sale and technology systems
- Opening inventory and supplies
- Training, travel and grand opening marketing
- Rent deposits, insurance, licenses and permits
- Additional funds for the initial operating period
Ongoing Fees and How They Affect Your Loan
Dippin’ Dots royalty built into product cost. The franchisor says Dippin’ Dots royalty and ad fund fees are built into the price of the product franchisees buy from the company, so there is no additional royalty on Dippin’ Dots sales. For a lender, that means the brand’s “fee” shows up in cost of goods rather than as a separate line below gross profit. Projections should use the actual product cost from the franchisor’s current price list, not a generic dessert-shop food cost assumption.
Popcorn royalty and ad fund. On the popcorn side of a co-brand, the franchisor charges a 6% royalty and a 1% systemwide advertising fund contribution, both on gross revenues excluding Dippin’ Dots sales. A co-brand budget therefore needs two lines of revenue with different fee treatments.
Other recurring costs. Rent, utilities, labor and insurance reduce cash for debt service; Item 6 lists any other franchisor fees.
How lenders factor these costs in. Lenders start with projected sales by product line, subtract product cost, the popcorn fees, occupancy and labor, and compare what is left with the loan payment, often stress-testing the slowest months.
Franchisor Requirements for New Owners
The franchising FAQ sets two financial thresholds:
- Minimum net worth: $300,000
- Minimum liquid capital: $100,000
Liquid capital typically funds the equity injection, the franchise fees and early reserves, so a buyer near the minimum should map out how far those funds stretch before applying for a Dippin’ Dots franchise loan.
The approval process. The franchisor describes a no-obligation Education Process that lets prospective owners evaluate the brands before committing. Expect to review the FDD, discuss available sites and receive approval before signing, and coordinate the loan timeline with site approval and the lease.
Ways to Own a Dippin’ Dots
A new co-brand location. The franchisor’s FAQ centers on the co-brand format, with both franchise fees, the combined investment range and site selection support. Our franchise start-up financing page explains how we approach new units.
A single-brand location. The FAQ lists separate franchise fees for each brand. Ask whether a Dippin’ Dots-only franchise is available in your market; the co-brand investment range would not apply.
Buying an existing location. A resale offers operating history and an existing lease, but needs franchisor approval and usually the landlord’s consent to assignment. Read our guide to buying a franchise resale before making an offer, and see our franchise restaurant acquisition financing page for how purchase loans are structured.
Financing Options for a Dippin’ Dots Franchise
Conventional term loans. Because Dippin’ Dots is not on the SBA Franchise Directory, a conventional business loan is usually the main financing tool. A term loan can cover build-out, equipment, franchise fees and opening costs for a new store, or the purchase price of an existing one.
SBA 7(a) loans. The SBA 7(a) program is the most widely used SBA product for franchise purchases, but SBA lenders generally require a brand to appear on the SBA Franchise Directory. See the SBA section below.
SBA 504 loans. The SBA 504 program is designed for owner-occupied real estate and long-lived fixed assets. Most Dippin’ Dots stores lease space in shopping centers and entertainment properties, so 504 rarely fits even when a brand is SBA-eligible.
Equipment financing. Freezers, dipping cabinets, popcorn kettles and display cases can often be financed separately, preserving cash for build-out. Learn more about restaurant equipment financing and leasing.
Working capital and lines of credit. Frozen dessert sales tend to peak in warm months and around holidays, school breaks and events, while rent and payroll continue year-round. A line of credit can help an owner stock up before busy periods and cover slower stretches. See our restaurant working capital options.
Seller financing on resales. In some resales, part of the price may be carried by the seller. A seller note would need to be acceptable to the senior lender and is typically subordinate to it, and some loan programs limit how it can be used.
SBA Loans for Dippin’ Dots Franchisees
SBA lending for franchises runs through the SBA Franchise Directory, a list of brands whose franchise agreements have been reviewed for SBA eligibility. SBA lenders generally require a brand to appear on the directory before making an SBA-guaranteed loan to one of its franchisees. A listing does not approve any borrower; it simply clears the franchise relationship for SBA review.
Dippin’ Dots is not on the SBA Franchise Directory. In plain terms, that means an SBA 7(a) or 504 loan is generally not the practical route for a Dippin’ Dots franchise as things stand, and buyers should plan on conventional financing. The absence of a listing is not a judgment about the brand’s quality.
What could change. Directory status can change, so confirm it when you apply. If the brand were added, the SBA 7(a) program maximum is currently $5 million, though program rules can change.
How Lenders Evaluate a Dippin’ Dots Deal
Personal credit and financial history. Lenders review credit, tax returns and a personal financial statement, and typically require personal guarantees.
Net worth and liquidity. The franchisor’s $300,000 net worth and $100,000 liquid capital minimums are a starting point. Lenders also look at what remains after the equity injection and closing costs, since reserves help an owner weather a slow season.
Industry and management experience. Retail, food service or management experience strengthens a request; first-time owners can lean on the franchisor’s training and a detailed staffing plan.
Business plan and projections. A credible plan models Dippin’ Dots sales and popcorn sales separately, applies the franchisor’s product pricing and the popcorn royalty and ad fund, and reflects the traffic patterns of the specific mall or venue. Show monthly cash flow, since sales are seasonal.
The FDD and franchise agreements. Lenders review the term, renewal rights, transfer conditions and territory provisions in both agreements of a co-brand. Item 10 discloses any franchisor financing, and Item 19 shows whether the FDD includes financial performance representations. See how lenders read a Franchise Disclosure Document.
Site and lease. In a mall or entertainment venue, the lease is often the most important document after the franchise agreements. Lenders review the remaining term, renewal options, relocation and co-tenancy clauses, and assignment rights.
Historical financials for resales. Buyers of an existing store should expect to provide several years of profit and loss statements, sales reports and tax returns, which lenders will reconcile.
Equipment and Seasonality
Low-temperature equipment. Beaded ice cream must be kept much colder than conventional ice cream, so freezers and dipping cabinets are mission-critical. Budget for service contracts and eventual replacement, and on a resale ask for the age and maintenance history of every freezer.
Seasonal cash flow. Frozen dessert demand typically rises in summer and around events; the popcorn side of a co-brand can help smooth cooler months. Show lenders how reserves or a credit line cover quieter periods.
Multi-Unit Growth and Development
Some owners grow by opening a second store in a nearby shopping center or entertainment property after the first one stabilizes.
Financing a second or third location. Lenders weigh existing cash flow alongside new-unit projections; each location needs franchisor and landlord approval.
Real-World Scenarios
A veteran opening a first co-brand store. A retired service member qualifies for the franchisor’s additional military discount, signs both franchise agreements and leases an inline space in a regional mall. A conventional term loan covers build-out and equipment, and personal funds cover the equity injection. Our article on franchise financing for veterans covers incentives and preparation.
A buyer purchasing an existing location. A buyer acquires an established store from a franchisee who is retiring. The lender underwrites actual sales history, the remaining lease term and freezer condition.
An operator adding a second venue. A franchisee with a well-established mall store adds a location in an entertainment property. The lender reviews combined cash flow and the new venue’s traffic.
Common Mistakes to Avoid
- Assuming an SBA loan will be available for a brand that is not on the SBA Franchise Directory
- Using a generic food cost when the franchisor’s product price already includes royalty and ad fund fees
- Forgetting that a co-brand carries two agreements and a royalty and ad fund on the popcorn side
- Building annual projections that hide seasonal cash shortfalls
- Overlooking relocation and co-tenancy clauses in a mall lease
- Underbudgeting freezer maintenance and replacement
- Leaving too little working capital after meeting the liquid capital minimum
For more pitfalls that apply across the food service industry, read the restaurant loan mistakes that cost owners the most.
Next Steps to Finance Your Dippin’ Dots Franchise
Step 1: Confirm you meet the requirements. Check your net worth and liquid capital against the franchisor’s minimums, and identify which funds you will use for the equity injection.
Step 2: Complete the Education Process and request the FDD. Learn the brands, ask whether single-brand and co-brand options are available in your market and obtain the current FDD.
Step 3: Review the FDD with advisors. Study Items 5, 6, 7, 10, 17 and 19 with a franchise attorney and accountant.
Step 4: Talk with a financing specialist early. Learn how conventional lenders will size a loan for this brand. Our conventional loan calculator can help with early payment estimates, which are for planning only and are not an offer or approval.
Step 5: Secure a site and build projections. Work with the franchisor on site selection, negotiate the lease and build monthly projections around the venue’s traffic and seasonality.
Step 6: Apply for financing. Submit the loan request with your personal financial statement, tax returns, projections, contractor bids, equipment quotes and lease.
Step 7: Close and prepare to open. Align the closing with the lease and franchise agreements, and keep working capital in reserve.
Dippin’ Dots Franchise Loan FAQs
How much does it cost to open a Dippin’ Dots franchise?
The franchisor estimates $119,704 to $366,950 for a co-brand business, depending on build-out costs and location.
What is the Dippin’ Dots franchise fee?
The franchise fee is $35,000. For a co-brand location, the second agreement receives 25% off, for a combined $56,000, and retired and honorably discharged military personnel receive an additional 15% discount.
Does Dippin’ Dots charge a royalty?
The franchisor says royalty and ad fund fees for Dippin’ Dots are built into the price of the product purchased from the company, so there is no additional royalty on Dippin’ Dots sales. The popcorn side of a co-brand carries a 6% royalty and a 1% ad fund contribution on gross revenues excluding Dippin’ Dots sales.
How much liquid capital and net worth do I need?
The franchisor requires a minimum net worth of $300,000 and minimum liquid capital of $100,000.
Can I get an SBA loan for a Dippin’ Dots franchise?
Dippin’ Dots is not listed on the SBA Franchise Directory, and SBA lenders generally require a listing, so most buyers use conventional financing. Confirm current directory status with your lender.
Does Dippin’ Dots offer financing?
The franchisor’s FAQ does not describe a financing program. Review Item 10 of the current FDD for any financing the franchisor or its affiliates offer.
Can I finance the freezers and equipment separately?
Often, yes. Freezers, dipping cabinets and popcorn equipment can frequently be financed with an equipment loan or lease, subject to approval.
Can a first-time business owner get a Dippin’ Dots franchise loan?
Yes, subject to approval. Lenders weigh training, management experience, liquidity and the site and lease.
Can I buy an existing Dippin’ Dots store?
Yes, when one is available and the franchisor approves the buyer. Lenders underwrite historical financials, the lease and equipment condition.
What documents do I need for a loan?
Expect a personal financial statement, tax returns, a business plan with monthly projections, the FDD, the lease or letter of intent and contractor and equipment quotes. For a resale, add the store’s financial statements.
How long is the franchise term?
Item 17 of the FDD sets out the term, renewal and transfer conditions for each agreement.
Final Thoughts
A Dippin’ Dots franchise loan pairs a well-known brand with a modest investment range, but structuring it well depends on the details: royalties built into product cost, a co-brand with two agreements, mall and venue leases, and seasonal sales. Buyers who model those factors honestly and plan on conventional financing from the start give themselves the best chance at a smooth opening.
US Professional Funding helps franchise owners and buyers finance new units, acquisitions, equipment and working capital. Learn more about our franchise financing solutions and restaurant financing programs.
