How to Finance a Stella’s Ice Cream Franchise: Scoop Shop Builds
By Anthony Cornella
A Stella’s Ice Cream franchise loan pays for a small-footprint dessert shop where the ice cream is made in-house, so most of the money goes into the build-out, freezers and production equipment and the cash needed to get through the first season. The brand began as a single shop in Idaho and now has franchised shops in other states.
This article covers what is publicly known about Stella’s Ice Cream, which figures you will need to pull from the franchise disclosure document (FDD), how the brand’s SBA Franchise Directory listing affects your options and how lenders look at a scoop shop deal.
US Professional Funding is not affiliated with, sponsored by or endorsed by Stella’s Ice Cream; the name is used only to describe the business. Figures from the franchisor’s disclosure document 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; review the current FDD and franchise agreement with a qualified franchise attorney and accountant.
Stella’s Ice Cream Franchise Loan at a Glance
- Concept: a neighborhood ice cream shop serving homemade ice cream, with dairy-free flavors, rotating seasonal flavors, cones, bowls and treats such as cookie sandwiches and floats.
- Origin: founded by Chad Hartley in Nampa, Idaho, and grown from the Boise area into a franchise system.
- Typical format: an inline storefront in a neighborhood shopping center or downtown street, with a production area for making ice cream on-site.
- Fees and investment: the franchise fee, royalty, marketing fee and Item 7 investment range could not be verified from the franchisor’s own materials; confirm them in Items 5, 6 and 7 of the current FDD.
- SBA Franchise Directory: listed as Stella’s Ice Cream under code S7307, with no additional notes.
What Is Stella’s Ice Cream?
Stella’s Ice Cream was started by Chad Hartley in downtown Nampa, Idaho. The idea came from Italian-style gelato shops the Hartleys visited abroad. The brand expanded across the Boise area, with shops in Eagle, Meridian and downtown Boise.
The product. Franchised shops make ice cream in the store, offering regular flavors, dairy-free options and rotating seasonal flavors, along with brownie bowls, cookie sandwiches and floats.
Franchise growth. Franchised Stella’s shops have opened or been announced outside the Treasure Valley, including in eastern Idaho, Texas and Oregon. Item 20 of the FDD lists current open and signed locations.
Why lenders view it the way they do. For a Stella’s Ice Cream franchise loan, lenders see a young, growing dessert brand with a simple menu and a relatively compact store. They also see seasonal sales, a short operating history for the franchise system and limited hard collateral beyond the equipment, so the borrower’s own liquidity, experience and site selection carry a lot of weight.
Stella’s Ice Cream Franchise Costs
The franchisor’s FDD is the only reliable source for costs. The categories below are the ones to look for and the ones a lender will expect to see in your budget.
Initial franchise fee. Item 5 states the fee, when it is due and whether it is reduced for additional shops.
Real estate and build-out. Most shops lease retail space. Build-out typically covers plumbing for sinks and production equipment, electrical capacity for freezers, flooring, a serving counter with dipping cabinets, seating and the brand’s interior design. Negotiate any landlord allowance before finalizing the loan request. Our article on financing a restaurant build-out explains how lenders review construction budgets.
Equipment. Making ice cream in the store means more equipment than a shop that sells prepackaged product. Expect a batch freezer, blast or hardening freezer, walk-in or reach-in freezers, dipping cabinets, refrigeration, a dish area and point-of-sale technology.
Opening costs and working capital. Opening inventory, training travel, grand opening marketing, licenses, deposits and insurance all come before the first sale, plus additional funds for an initial period.
The Item 7 table for a scoop shop like this will usually include:
- Initial franchise fee
- Lease deposits and rent before opening
- Leasehold improvements and construction
- Ice cream production and freezer equipment
- Furniture, fixtures and signage
- Point-of-sale system and technology
- Opening inventory and supplies
- Training expenses
- Grand opening marketing
- Licenses, permits and insurance
- Additional funds for the initial operating period
Lenders compare your request with the high end of Item 7 and then add a cushion for overruns, because build-outs rarely come in under budget.
Ongoing Fees and How They Affect Your Loan
Item 6 of the FDD lists the royalty, any brand or marketing fund contribution, local advertising requirements, technology fees, training fees for new managers, transfer fees and renewal fees.
How lenders factor them in. Royalty and marketing fees are usually a percentage of sales, so they come off the top before rent, labor and loan payments. Lenders test whether the shop can still cover its debt after those fees in a slow month. For an ice cream shop, that test matters most in the off-season, when sales fall but rent and loan payments do not.
Remodels and upgrades. Check the franchise agreement for refresh or remodel obligations during the term and equipment replacement standards. These become future financing needs.
Franchisor Requirements for New Owners
The minimum net worth and liquid capital Stella’s Ice Cream expects could not be verified from its own materials. Ask the franchise development team for its written requirements and confirm what the FDD says about owner involvement, training and the approval process.
Expect the franchisor to review your background, financial statement and operating plan. Lenders generally prefer an owner who will be closely involved, especially in the first year.
Ways to Own a Stella’s Ice Cream
Open a new shop. Most owners in a young system build new shops. Financing covers the build-out, equipment, fees and working capital, and the lender relies on projections rather than history. See our restaurant start-up financing options.
Buy an existing shop. As the system matures, some franchised shops may come up for sale. A resale lets a lender underwrite actual sales and seasonality, but the franchisor must approve the buyer and the transfer. Our article on buying a franchise resale walks through the approvals.
Develop several shops. If the franchisor offers multi-unit or area development rights, you may commit to a schedule of openings. Each new shop typically needs its own financing as it is built.
Financing Options for a Stella’s Ice Cream Franchise
SBA 7(a) loans. Because the brand is on the SBA Franchise Directory, a Stella’s Ice Cream franchise loan through the SBA 7(a) program is a natural fit for a new shop. It can cover the franchise fee, build-out, equipment and working capital in one loan.
SBA 504 loans. Most shops lease their space, so the SBA 504 program fits only if you are buying a building or a condo unit for the shop, or financing a large package of long-lived equipment.
Conventional term loans. Owners with strong liquidity, collateral or an existing business may qualify for a conventional business loan instead.
Equipment financing. Batch freezers, hardening freezers, dipping cabinets and walk-in units can be financed separately, which can preserve cash for the build-out. Learn more about restaurant equipment financing and leasing.
Working capital and lines of credit. Ice cream sales typically peak in warm months, so a reserve or line of credit helps cover the slower season, inventory buys before summer and payroll. See our restaurant working capital solutions.
Seller financing on resales. When buying an existing shop, a seller may agree to carry part of the price. A seller note is typically subordinate to the main loan, and SBA rules may limit how it is structured.
SBA Loans for Stella’s Ice Cream Franchisees
SBA lenders check the SBA Franchise Directory before making a loan to a franchisee. A listing means the SBA has reviewed the brand’s franchise documents and found the relationship eligible; it does not approve any particular borrower or location.
The Stella’s Ice Cream listing. Stella’s Ice Cream is listed under code S7307 with no additional notes. In plain English, the franchise agreement does not carry any special conditions your lender must handle beyond the standard SBA rules. Give your lender the code so they can confirm the listing and the current FDD.
Program size. The SBA 7(a) program maximum is currently $5 million, although program rules can change.
Application tips. Have a lease or letter of intent, contractor bids, an equipment quote and a month-by-month projection that shows seasonality. You can estimate payments with our SBA loan calculator, which is for planning only and is not an offer or approval.
How Lenders Evaluate a Stella’s Ice Cream Deal
Personal credit and financial history. Lenders review credit reports, tax returns and a personal financial statement, and most require a personal guarantee.
Net worth and liquidity. You will need cash for the equity injection and a reserve after closing. Lenders like to see that you can cover a slow winter without strain.
Industry and management experience. Food service, retail or general management experience strengthens a request. So does a plan for who will make the ice cream and manage staff.
Business plan and projections. Projections should reflect seasonal sales, the cost of dairy and mix-ins, labor for production and scooping, and royalty and marketing fees. Be conservative about the first year in a new market.
The FDD and franchise agreement. Lenders read the term, renewal and transfer terms, territory rights and any franchisor financing in Item 10. Review Item 3 and Item 4 for litigation and bankruptcy history. Our article on how lenders read a Franchise Disclosure Document explains which items matter most.
Site and lease. Foot traffic, nearby families, parking and evening activity matter for an ice cream shop, as does lease length relative to the loan term.
Historical financials for resales. For an existing shop, expect to provide several years of sales and profit and loss statements, ideally by month to show seasonal patterns.
Equipment and the In-House Production Model
Making ice cream in the store is central to Stella’s identity and to its financing. A batch freezer turns mix into ice cream, a hardening freezer sets it, and display cabinets hold the flavors on the line.
That equipment is both a cost and collateral. Ask the franchisor for the approved equipment list and quotes early, and confirm whether the equipment can be leased or financed separately from the build-out.
Multi-Unit Growth and Development Agreements
Stella’s has grown through franchisees opening shops in new markets, and some owners hope to add more shops nearby. If you sign a development agreement, you will commit to a schedule of openings, and each new shop will need its own financing.
Financing a second shop. Once the first shop has operating history, lenders can underwrite its cash flow alongside projections for the new one. Each new shop also needs franchisor approval.
Real-World Scenarios
A first-time owner in a growing suburb. A couple with management experience signs a lease in a new strip center near schools and homes. They use an SBA 7(a) loan for the build-out, equipment and opening costs, and keep a reserve for the first winter.
A buyer purchasing an existing shop. A buyer acquires a franchised shop from an owner who is relocating. The lender reviews monthly sales across several seasons, the remaining franchise term and the lease, and the franchisor approves the transfer.
An owner opening a second shop. After a strong first full year, an owner opens a second shop in a nearby town, financing it with a new loan supported by the first shop’s track record.
Common Mistakes to Avoid
- Budgeting from a single strong summer month instead of a full-year projection
- Underestimating production equipment and electrical work for on-site ice cream making
- Signing a lease before confirming financing and franchisor site approval
- Leaving too little working capital for the slower season
- Skipping a careful read of Items 5, 6, 7 and 17 of the FDD
- Assuming a landlord allowance will cover build-out overruns
For more pitfalls, read common restaurant loan mistakes.
Next Steps to Finance Your Stella’s Ice Cream Franchise
Step 1: Request the FDD. Get the current disclosure document and confirm the fees, Item 7 range and capital requirements.
Step 2: Review it with advisors. Go through the FDD and franchise agreement with a franchise attorney and accountant.
Step 3: Talk with a financing specialist. Learn how much you may be able to borrow and how much equity you will need.
Step 4: Find and evaluate a site. Work with the franchisor on a location and get build-out estimates.
Step 5: Build your projections. Create a month-by-month plan that shows seasonality, fees and debt service.
Step 6: Apply and close. Submit your loan package, coordinate with the franchisor and landlord, and set aside working capital before opening.
Stella’s Ice Cream Franchise Loan FAQs
How much does a Stella’s Ice Cream franchise cost?
The total investment depends on the space, build-out and equipment. Item 7 of the current FDD gives the official range; we could not verify it from the franchisor’s own materials.
What is the Stella’s Ice Cream franchise fee?
The fee is listed in Item 5 of the FDD. Ask whether it is reduced for additional shops.
What royalty does Stella’s Ice Cream charge?
Item 6 lists the royalty and any marketing fund contribution. Lenders include both in your projections.
How much liquid capital do I need?
Ask the franchisor for its written net worth and liquidity requirements. Lenders will also expect an equity injection and a reserve after closing.
Can I get an SBA loan for a Stella’s Ice Cream franchise?
Yes, if you qualify. Stella’s Ice Cream is on the SBA Franchise Directory under code S7307 with no additional notes.
Can I buy an existing Stella’s Ice Cream shop?
If one is available and the franchisor approves you, yes. Lenders will review the shop’s monthly sales history.
Can a first-time business owner get a Stella’s Ice Cream franchise loan?
Yes, with solid credit, enough cash for the equity injection and a clear operating plan.
Does Stella’s Ice Cream offer financing?
Check Item 10 of the FDD, which describes any financing the franchisor offers.
Does the FDD include financial performance information?
Review Item 19 to see whether the franchisor makes any financial performance representations.
How long is the franchise term?
Item 17 of the FDD and the franchise agreement state the term, renewal and transfer conditions.
Final Thoughts
A Stella’s Ice Cream shop is a compact, equipment-heavy build with seasonal sales. Owners who confirm every figure in the FDD before applying for a Stella’s Ice Cream franchise loan, plan for the slow months and line up financing before signing a lease put themselves in the best position to open on time.
US Professional Funding helps franchise buyers and owners finance start-ups, acquisitions, equipment and working capital. Learn more about our franchise financing and restaurant financing solutions.
