Are you ready to start a franchise with serious profit potential that also helps raise funds for worthy causes inside your community? If this unique business opportunity sounds exciting for you, you ought to look joining Kona Ice, Inc.
How much will it cost to invest in a Kona Ice Franchise?
You’ll need between $120,000 – $150,000 to open a Kona Ice unit. This is much lower investment than other food franchise opportunities where you could be looking $1 million dollars or more to get into business. The main reason is due to the fact you’re operating a mobile truck instead and don’t have the monthly overhead of a large retail space. This single point significantly cuts startup cost
Kona Ice has been ranked the #1 New Franchise in Entrepreneur Magazine and received the Highest in Franchisee Satisfaction award by two separate agencies (Franchise Business Review and Franchise Update). The notoriety doesn’t stop there – Kona Ice is #1 in the Dessert Franchise category in Entrepreneur Magazine and made the Fastest Growing List for the past five years. These awards demonstrate business owner satisfaction and financial growth, but is this opportunity the right investment for you?
Take a look at why Kona Ice quickly grew to over 450 franchise units in 43 states in 5 years and why you may want to invest in one of those units too. As with all franchise opportunities there are varying costs. But we break down some of the base financials you will before opening a Kona Ice franchise and discuss the pros and cons of the business.
Financial Requirements and Fees
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Here is a base overview of what the essential finance requirements are for a Kona Ice outlet. You’ll notice that the initial fees are much lower than many other competing franchises. Liquid capital refers to the minimum amount you need to have on hand to be considered. The net worth is the total amount of all your assets combined, including investments of properties.
|Fees/ Expenses||Amount Needed|
|Late Fees||$25 per day|
Here is a more detailed breakdown of the costs and fees required to open the franchise. Kona Ice does not have many training or inventory costs, but it does have fees pertaining to territory and vehicle compliance. It must also be noted that once you purchase a Kona Ice truck it is non-refundable, even if you decide not to open a business.
|Fee||Low-End Costs||High-End Costs|
|Truck Compliance Fee||$0||$4,000|
|Initial Franchise Fee||$15,000||$15,000|
|Territory Reservation Fee||$10,000||$10,000|
The fees and costs for owning a Kona Ice unit may not be as high as other franchises, yet it is important to remember that there are smaller, more subtle fees that can accumulate over time.
Here is a breakdown of the fees that could be charged when operating your Kona Ice truck:
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|Type of Fee||Amount|
|Kona E-mail Address Fee||$60|
|Non-Compliance Fee||$250 for first incident, $500 if violation is not corrected within 30 days; $100 per day if violation not corrected within 30 more days|
|Returned Check Fee||$100|
|Professional Fees and Expenses||Varies depending on circumstances|
|Truck Remodel and Updates||$0 – $15,000|
|Mystery Shopper Fee||$50|
Average Sales / Revenue per Year
On average, Kona Ice franchises draw in $94,868 annually. This, of course, will vary based on your business expertise and commitment to marketing your brand.
It must also be considered that your sales will vary based on the season. Frozen desserts are a popular Spring and Summer staple, yet may be less likely to sell during the colder months. If you live in a warm environment like Southern California, expect to be able to vend most of the year.
|Incorporated Name:||Kona Ice, Inc.|
How Much Profit Does the Kona Ice Franchise Make Per Year?
As of 2015, the average Kona Ice owner accumulated $94,868 in annual income. It’s not uncommon for Kona Ice owners to own multiple units, increasing annual income. Your profit depends on your ability to market your franchise, partner with local organizations, as well as finding high-traffic locations in your assigned territory.
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Things To Consider with Kona Ice, Inc.
Type of Franchise
Kona Ice units come in several different styles depending on how much financial investment you can pay and where your territory is located.
- Kona Minis: The popular, smaller, and more agile version of a Kona Ice unit. It’s created specifically for indoor events and small outdoor venues, such as weddings or parties. It is a low-risk investment and can keep income flowing all year round.
- The Kona Kiosk: This style of unit came into play in 2015, when semi-permanent venues and large events became an ideal territory for Kona Ice franchises. It can serve the same amount of people as a Kona Ice truck, yet is smaller in size.
- The Kona Trailer: This option is ideal for large venues such as amusement parks, circus venues, or stadiums. It’s perfect for a location in which you will be permanently established.
One of the benefits of owning a Kona Ice truck is that it can drive anywhere, anytime, and comes fully equipped with everything you need. In fact, the entire truck is covered in advertising – it sells itself!
There is even an enhanced sound system that plays tropical music, adding to the fun nature of the franchise. In addition to these enhancements, your truck is the first mobile food truck to be approved by the National Sanitation Foundation.
A benefit to having a Kona Ice truck is that you will receive large, protected territories for your business. Territories are assigned based on zip code and give you the chance to operate your business without nearby competitors. There is no forced expansion of your business, which is ideal for entrepreneurs who wish to keep their time and effort focused on only one franchise.
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It is also important to choose a location based on foot traffic and weather. Although shaved ice may be popular during the Spring and Summer months, the likelihood of sales during colder Winter months is much lower, although the company has done some testing selling hot cocoa in an effort to improve winter sales.
One positive aspect of owning a Kona Ice unit is the low opening fees and low overhead costs. While many popular franchises require over $1 Million in Net Worth and liquid capital, Kona Ice only requires a fraction of this. If you are still in need of financial support, there are opportunities available to you through Kona Ice, Inc. Simply e-mail their headquarters and you will receive more information on financial aid requirements.
The only drawback to having low overhead and opening fees is that there are much smaller fees that may go unnoticed. For example, you have to pay for your own email address as well as Mystery Shopper fees. Mystery Shoppers are sent from corporate headquarters to determine if your service is high quality, and you are required to pay for this mystery shopper even if you meet company standards.
Advantages of Kona Ice
The good news is that there are many benefits and advantages to owning a Kona Ice franchise. Not only do you have the freedom to drive around your territory, but your truck comes fully supplied with everything you need: equipment, self-serve shaved ice, patented flavorwave, and customizable ancillary equipment. Here are some more reasons why the franchise ranks high in business owner satisfaction:
The business is extremely fast in its approval process. This means that you can begin your Kona Ice business without 30-60 days – a radically faster time frame than most franchises, which can often take up to a year to even be approved. Think about it – if you submit for approval today, you could be a business owner in only a few months!
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An established brand with over eight years in the industry means that Kona Ice is well-developed and respected amongst many. This helps to not only sell more products but to gain the trust of business owners. In fact, corporate headquarters offers significant business support for your success. There is a training program, where you will receive marketing strategies, initial business setup, digital marketing, a Q&A with the CEO, hands-on training, and one-on-one training and advice from veteran franchisees. Since its beginnings in 2007, Kona Ice has ranked highest in franchisee satisfaction with two different agencies – you can even read testimonials on their website to prove this.
The financial costs of opening this franchise are extremely low when compared to other popular franchises. You only need liquid capital of $30,000 and a net worth of $50,000, whereas many competitors require over $1 Million. This reasonably affordable business investment also applies to the low fees required of franchisees. There is a fixed royalty fee and incredibly low overhead. While the average overhead of franchises is 32%, Kona Ice is 6%.
Kona Ice trucks also receive their own exclusive territory, meaning that other Kona Ice franchises are forbidden from entering your assigned zip code. This means that your unit will avoid competition from other Kona Ice franchisees.
Another advantage is the marketing support provided by headquarters. Professionally designed emails are delivered to targeted markets, social media contests and campaigns are implemented to help promote your new brand, location-based web searching direct customers to local operators, and individual mini websites are assigned to each franchisee. In addition to this marketing support, you are given Kona-branded merchandise, freebies, advertising materials, and social media posts to help promote the brand.
- Fully Equipped Food Truck
- Fast Approval Process
- Established brand
- Low Overhead
- Assigned Territory
- Marketing Support
Challenges of Kona Ice
Although there are a plenty of benefits to owning a Kona Ice shaved ice truck, there are some lesser known fees that can be easily overlooked. For example, if you are required to pay for your own Kona Ice email address as well as for any refunded checks or insufficient funds. If you wish to relocate territories, you are required to pay a hefty fee of $5,000.
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The relocation fee is a large cost, considering it is only to relocate territories while keeping the franchise up and running. The disadvantage to having extremely low overhead means that smaller, less noticeable fees like these are more likely to occur. Thanks to corporate support, it is possible to receive financial aid.
There are also the costs of vehicle maintenance and upgrades. Your food truck must be filled with fuel as well as taken in for inspection and routine maintenance to make sure it is running smoothly. This is the same with any independent food truck as well, but worth noting to a first-time franchisee. These costs can quickly add up, especially considering how large units can be.
Another challenge is that shaved ice is not always popular all year round. While it may have its challenges, it is comparable to ice cream stores in the winter, or hot soup restaurants in the summer. While business may be slightly slower during cooler months, the strategic location of the Kona Ice Franchise van makes a huge difference.
The other challenge is that you’re operating a mobile unit. Not a fixed location. Customers don’t know exactly where you’ll be everyday and you’ll also need to get comfortable driving around a big bright truck. These challenges are by no means unsurmountable, but worth understanding before getting involved in the business.
- Many small fees required of your business
- Additional vehicle costs not covered by corporate headquarters
- Shaved ice may not be popular all year round
Is the Kona Ice Franchise Right for You?
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Selling shaved ice may not seem like a viable career path at first glance, but the time-proven business owner satisfaction of Kona Ice may lead you to think differently. If you have the liquid capital and net worth, chances are you will be able to open a Kona Ice within only a few months.
In addition to the fast approval process, the franchise comes with its many benefits. With low-cost overhead, easy transportation, fully equipped food trucks, and marketing support, Kona Ice is the perfect opportunity for entrepreneurs interested in the frozen dessert business. It’s not a surprise that about 75% of franchisees purchase a second unit within the first two years, making their financial growth and business success even more widespread.
Remember, each Kona Ice owner’s annual income and revenue will vary based on how hard they push their franchise marketing and where they are located. This is largely a hustle business. If you don’t get out there and work events, you won’t make money.
Such a challenge, however, is well-suited for folks looking for a fun, mobile business opportunity that will teach them about how to increase their profit in unique ways (with the help of corporate headquarters, of course). If such a unique, cost-efficient franchise sounds exciting to you, Kona Ice is the ideal franchise for your financial investment.
Now that you are equipped with new knowledge on Kona Ice, Inc., think about what is most important to you in a business. Last of all, decide if shaved ice and frozen desserts are the niche market you want to pursue. Although shaved ice may seem like an unusual niche to invest in, once you and your customers get a taste of the refreshing dessert you will never go back.
The delicious, thirst-quenching shaved ice comes in all sorts of flavors and draws attention from kids and adults alike. Having the ability to move locations in a truck brings its benefits, such as being able to go where the crowds are. You can also expect to help local organizations raise thousands of dollars through fundraising efforts with your truck. This can lead to a lot of satisfaction for those that want to help non-profit organizations and youth within the local community. You can learn more about the Kona Ice franchise opportunity here.