Industry News | October 30, 2012 | QSR Exclusive Brief

Kona Ice Thinks Small to Achieve Big Winter Results

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As colder weather rolls around, many Kona Ice franchisees are winding down business for the season. But some are ready to make their shaved-ice truck a 12-months-a-year business—and with the new Kona Mini cart, they can.

Founder Tony Lamb says the new cart—which measures 68 inches long, 31 inches wide, and 60 inches high and is an exact replica of the brand’s iconic truck—was created with two purposes in mind.

First, the brand wanted to manage its fast-paced growth so that franchisees wouldn’t take on too much debt compared to return on investment.

Second, franchisees who built strong relationships with community organizations, schools, and sports teams wanted a way to continue their partnerships when events moved inside for cooler weather.

The cart comes fully equipped, includes hot and cold running water, and carries six of the brand’s top flavors. The Kona Mini package also includes its own trailer, locking system, and wench system to transport the 500-pound cart.

Though the brand tested the prototype last year by giving eight franchisees a cart to experiment with, Kona Ice now has more than 50 deposits for Kona Minis and is manufacturing carts as quickly as it can, Lamb says.

The franchising fee for Kona Ice operators—which includes a truck, territory, training, and start-up inventory—is $98,000. However, at just $19,880 for the complete Kona Mini package—which includes the cart, a trailer to transport it, and accessories like ice caddies, a canopy, flags, and other promotional pieces—the Mini is a steal for existing franchisees who want to economically expand their business.

“We’re taking one-fifth of the price for a presence that has, in some cases, the same return on investment,” Lamb says. He adds that franchisees who operated the original Kona Mini prototypes have seen a 20–30 percent increase in overall yearly sales.

“We learned a lot about the business model and how the whole thing worked and what was the most profitable way to do it,” Lamb says about the prototypes. “What we were blown away by was the amount of revenue the Mini generated even in prime season.”

Though the Kona Mini may be an attractive offer for potential franchisees, the model is only available to existing operators.

“I don’t want to taint what’s already happened or go back on my promise, basically, which is, ‘This is the way the program’s going to work. You buy a franchise initially … that garners protected territory and product and then all the marketing that we bring to the table,’” Lamb says.

“It wouldn’t be fair for someone to be able to get right beside you for a fifth of the price, even if they got a smaller amount of territory,” he continues. “It’s not what we set out to do; it’s not what we originally told our franchisees we were going to do, so we’re going to stick to our guns and develop this way.”

By Mary Avant