Chocolate is the go to treat for many and the quintessential Valentines Day treat. Did you know you could open your own franchised business dedicated to all things chocolate? You can!
Franchising a chocolate business presents the unique opportunity for entrepreneurs to launch a business-in-a-box dedicated to all things chocolate.
The goal of this blog post is to introduce you to four brands franchising in the United States and provide an overview of several key metrics.
Seriously considering a chocolate franchise opportunity? Franchises are sold through disclosure of a franchise disclosure document. The first step is to introduce yourself to the brand. Next, work with franchise legal counsel to ensure you understand disclosures, and appreciate your legal rights and obligations. We have no affiliation with any of these brands and would love to help guide you through the process.
Rocky mountain Chocolate Factory
Rocky Mountain Chocolate Factory has operated a retail and manufacturing business focused on all thing’s chocolate since 1981. They are based in Durango, Colorado, and they produce a wide array of high-quality chocolate candies and assorted confectionery items. Chocolate lovers can establish and operate their own Rocky Mountain Chocolate Factory retail store selling premium chocolates, branded candy, and other premium confectionery products by signing a franchise agreement and becoming a franchisee.
Rocky Mountain Chocolate Factory provides the recipes and specifications for certain confectionary products (such as caramel apples, crackers, pretzels, fresh and dried fruits, dog bones, plain chocolate) so franchisees can also make Rocky Mountain Chocolate Factory treats right in their store. They offer the option for franchisees to operate a full-sized store or maintain a leaner profile as a kiosk location. This franchisor also offers the option for franchisees to operate out satellite or temporary locations under certain circumstances through an addendum to their franchise agreement without paying any additional franchise fee.
Initial Franchise Fee
According to its 2022 Franchise Disclosure Document (“FDD”), the initial franchise fee for a Rocky Mountain Chocolate Factory store is $35,000. This is to be paid in full to Rocky Mountain Chocolate Factory, Inc. upon signing of a franchise agreement. The company also offers discounted rates for franchisees in good standing who wish to open an additional store, as well as discounted rates for qualified veterans.
Initial investment Needed
To launch a single Rocky Mountain Chocolate Factory store, a franchisee should anticipate an initial investment ranging from $202,272 to $527,379. This figure includes the initial franchise fee, real estate and improvements, furnitures and fixtures, equipment, signs, opening inventory and cooking supplies, in-store promotional graphics, security deposits, utility deposits, business licenses, and lease review fees, pre-opening training, and travel and living expenses. This is found in Item 7 of Rocky Mountain Chocolate Factory’s FDD.
Operating Fees due to Franchisor
Running any business naturally comes with ongoing expenses. In a franchise set-up, a franchisee needs to pay regular royalty fees to the franchisor. For Rocky Mountain Chocolate Factory, this royalty fee is 5% of the monthly gross retail sales payable on the 15th day of the next month. Rocky Mountain Chocolate Factory also charges a marketing and promotion fee which may be up to 2% of gross retail sales payable monthly on the 15th day of the next month. These and other fees are outlined in Item 6 of the FDD.
Participation in the Actual Franchise Operation
Full-time attention and management are crucial for every business. Item 15 of Rocky Mountain Chocolate Factory’s FDD provides that a general manager must be designated to be responsible for the direct on-premises supervision of the store at all times during its hours of operation.
Rocky Mountain Chocolate Factory Franchises
As of the end of 2022, Rocky Mountain Chocolate Factory has a total of 154 franchised outlets. These are located in the following states: Arizona, Arkansas, California, Colorado, Florida, Idaho, Illinois, Iowa, Kansas, Louisiana, Michigan, Minnesota, Mississippi, Missouri, Nevada, New Hampshire, New Jersey, New Mexico, North Carolina, Ohio, Oklahoma, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Utah, and Washington.
Co-Branding Opportunties
In the restaurant space, complementary brands often partner together to deliver more products to their customers and drive more business. Think coffee and donuts. What goes well with Chocolate? Ice cream! That is why Rocky Mountain Chocolate Factory has partnered with Cold Stone Creamery since 2009. As of December 31, 2023, there were 102 Rocky Mountain Chocolate Factory –franchisee-owned co-branded Stores offering both Cold Stone Creamery products and Rocky Mountain Chocolate Factory products.
Kilwins
Founded in 1947, Kilwins has earned earned a reputation for providing high-quality Chocolates, Ice Cream, and confections. Kilwins has been franchising since 1981 and current offers opportunities under Kilwins Chocolates Franchise, Inc. They offer a “Store” and a “Shop” model. Stores sell candy, nuts, beverages, ice cream and other food products. Shops sell a modified product assortment including ice cream products and limited pre-packaged chocolate products. As of December 31, 2022, there are 149 Kilwins outlets.
Initial Franchise Fee
According to its 2023 FDD, you can either franchise a Kilwins Full Line Chocolates, Confectionery and Ice Cream Store (“Kilwins store”) or a Kilwins Ice Cream and Chocolate Shop (“Kilwins shop”). The initial franchise fee is $40,000 for a Kilwins store and $20,000 for a Kilwins shop. This is the amount to be paid to Kilwins Chocolates Franchise, Inc. The company also offers discounted rates for franchisees who wish to open an addition store.
Initial investment Needed
As per Item 7 of Kilwins’ FDD, to open a Kilwins store, a franchisee should expect to make an initial investment of $378,955 to $827,563. Meanwhile, to open a Kilwins shop, the estimated initial investment ranges from $215,803 to $378,637.
These figures includes the initial franchise fee, lease/rent, plans and construction, store construction oversight and review fee, equipment, POS, inventory, signs and awnings, advertising, insurance, training expenses, business licenses, professional fees, additional funds and security deposits.
Operating Fees due to Franchisor
Running any business naturally comes with ongoing expenses. In a franchise set-up, a franchisee needs to pay regular royalty fees to the franchisor. For Kilwins, this royalty fee is 5% of gross sales payable on a monthly basis. Kilwins also requires a franchisee to contribute into a national marketing fund which is 1% of gross sales payable on a monthly basis. These and other fees are outlined in Item 6 of the FDD
Participation in the Actual Franchise Operation
Again, full-time attention and management are crucial for every business. Item 15 of Kilwins’ FDD provides that a franchisee’s designated management employee must devote full time, energy, and best efforts to the management and operation of the store.
Kilwins Franchisee Performance
Kilwins makes an Item 19 franchise performance representation in its franchise disclosure document. You should review Item 19 carefully as it can help you evaluate the franchise opportunity. According to its Item 19, 140 Kilwins locations averaged $869,667 in revenue in 2022 (41% or 57 outlets were above the average). The median was $763,933 in revenue. The FDD includes more details and breaks down performance by state.
Kilwins Franchises
As of the end of 2022, Kilwins has a total of 145 franchised outlets. These are located in the following states: Alabama, Arkansas, Colorado, Delaware, Florida, Georgia, Illinois, Indiana, Louisiana, Maryland, Massachusetts, Michigan, Missouri, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oklahoma, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Virginia, Washington DC and Wisconsin.
Schakolad Chocolate Factory
Its name a combination of “shacked” and “chocolate”, Schakolad Chocolate Factory’s (“Shackolad”) first store opened in 1995. Then, in 1999, Shackolad began franchising their unique system, making its name known in the national and international scene as a producer of fine quality chocolates.
Initial Franchise Fee
According to Entrepreneur.com, the initial franchise fee for a Schakolad Chocolate Factory store is $39,500. This is the amount to be paid to Schakolad International Corp. The company also offers a discounted rate to veterans who avail of their franchise opportunity.
Initial investment Needed
As per Entrepreneur.com, to open a Schakload store, a franchisee should expect to make an initial investment of $134,100 to $167,500.
The items included in this amount are discussed in Item 7 of Schakolad’s FDD.
Operating Fees due to Franchisor
Running any business naturally comes with ongoing expenses. In a franchise set-up, a franchisee needs to pay regular royalty fees to the franchisor. For Schakolad, this royalty fee, according to Entrepreneur.com is around $600 to $1,000 per month. These and other fees are outlined in Item 6 of the Shackolad’s FDD.
Schakolad Stores
These current locations of Schakolad’s stores are in the following states: Florida (Fort Lauderdale, Orlando and St. Petersburg), Indiana (Plainfield and Zionsville), Tennessee (Franklin and Knoxville), and Texas (San Antonio).
Oh My Gosh Brigadeiros
Started in 2015 with the idea of bringing and making Brigadeiro well known in the US, OH MY GOSH! Brigadeiros (“OMG Brigadeiros”) offers a variety of brigadeiros, coffees, cake jars, and other unique desserts. We were unable to locate an FDD for this brand, but they appear to be actively franchising based on entrepreneur.com’s company overview. We base this post of the figures they report.
Initial Franchise Fee
According to Entrepreneur.com, the initial franchise fee for a OMG Brigadeiros store is $29,900. This is amount to be paid to Oh My Gosh Brigadeiros Franchise, LLC.
Initial investment Needed
As per Entrepreneur.com, to open a Schakload store, a franchisee should expect to make an initial investment of $102,500 to $307,150.
The items included in this amount are discussed in Item 7 of OMG Brigadeiros’ FDD.
Operating Fees due to Franchisor
Running any business naturally comes with ongoing expenses. In a franchise set-up, a franchisee needs to pay regular royalty fees to the franchisor. For OMG Brigadeiros, this royalty fee, according to Entrepreneur.com is around 5%. They also have an advertising royalty fee of up to 1%. These and other fees will be outlined in Item 6 of the OMG Brigadeiros’ FDD.
OMG Brigadeiros Stores
Currently, OMG Brigadeiros has 5 stores, all of which are located in Florida – 4 in Miami, Florida, and 1 in Aventura, Florida.
Meet the Author:
Christine Bontuyan is a lawyer in the Philippines and she is based in Cebu City. She earned her Juris Doctor degree in 2020. Apart from handling civil and criminal cases in the Philippines, Christine serves as a paralegal for reputable US law firms. She previously served as an elected public official in the Philippines as a Sangguniang Kabataan Chairperson from 2018 to 2023.
The information contained in this post was compiled from publicly available documents, and its accuracy may differ over time due to future changes, Franchises in the United States are sold through the FDD. If you are interested in a franchise and you meet the franchisor’s criteria, you will be furnished with a copy of the FDD used to offer franchises in your state. This document will contain multiple disclosures and a copy of the franchise agreement. It is important to work with a franchise attorney to evaluate a franchise opportunity.
Waldrop & Colvin is a franchise law firm and they help business owners (franchisors) and entrepreneurs (franchisees) evaluate franchise opportunities so they can make informed decisions. You can learn more about franchising and franchise law by exploring their site (Overview of federal franchise law and State-by-State franchise requirements).
