How Much Does it Cost to Open Pelican’s SnoBalls Franchise In USA | SkillsAndTechSkillsandTech | February 4, 2022 |
Snowballs are soft and finely shaved ice treats drizzled with flavored syrup or topped with gummies, whipped cream, marshmallows, and many other add-ons. They’re popular as summer treats found all around the United States with some calling these snow cones or shave ice in Hawaii. But for the people in New Orleans, they call it a snoball.
One chain that takes inspiration from the New Orleans style is Pelican’s SnoBalls. The company has been in business for almost 20 years and are continuing to serve snowballs with over 100 flavors. Flavors range from classic cherry, orange, lemon, mango, pineapple, to the bolder ones such as red velvet cake, tamarind, and even dill pickle.
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How much does it cost to open a Pelican’s SnoBalls?
We’ve got good news for Pelican’s SnoBalls is open for franchising. To own a branch, expect investments to be around $61,150 to $195,300. The franchise fee is $20,000 per location.
To learn more about owning a Pelican’s SnoBalls franchise, I’ve compiled my view of the companies advantages, challenges, and fee structure. Read my full review below.
Financial Requirements and Fees
Below is a summary of Pelican’s SnoBalls fees to franchise a unit:
|Fees / Expenses||Financial Amount|
|Total Investment||$61,150 to $195,300|
Not much is known what the exact liquid capital and net worth are required when you franchise a Pelican’s SnoBalls. But other fees you need to be aware of are their monthly royalty fee which is set at 8% and the stuff you’ll need to purchase as a requirement once you sign up with them. These include:
- Branded Tent: $825
- SnoBuck Coins (Pelican Bucks): $525 for approximately 3,500 coins
- 30 Branded T-shirts: $300 to $360 ($10 to $12 each)
Note that each of the items listed above are not refundable.
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Average Sales / Revenue per Year
Pelican’s SnoBalls has not made their annual revenues open for the public so there is a lack of data as to how much the brand earns every year. But we can look at the sales numbers from similar concepts like Kona Ice or Bahama Buck’s to give us a ballpark revenue numbers.
For example, Kona Ice trucks average $94,868 in annual revenue. Keep in mind this revenue is generated with a mobile truck that isn’t even open 7 days a week. A Bahama Buck’s average gross sales was $463,387 in 2015 according to their franchise disclosure document. Bahama Buck’s uses a more traditional strategy with a retail store that’s open regular business hours so higher average revenues are to be expected.
For a franchise opportunity with more than 500 locations in operation, there’s no way the company would be able to scale to this level at less than $100,000 in annual revenue.
Pelican’s SnoBalls Franchise Facts
|Total Units||Over 500|
|Incorporated Name||Pelican’s SnoBalls USA, LLC|
|Subsector||Food and Beverage|
Pelican’s SnoBalls was started by a 13-year old girl named Ansley Johnson. She was able to come up with the snowball business idea since she enjoyed these treats whenever she visited her grandparents in New Orleans, Louisiana. But those were the only times she could get that treat and so she enlisted the help of her dad to put up a snowball business near her. 2001 saw the birth of Pelican’s SnoBalls in North Carolina with Ansley and her younger brothers working to keep it in business.
Ansley made it very clear that her products were a snowball and not a snow cone. The difference was that a snow cone’s ice texture was coarser and had a certain crunch to it while their snowballs had to be fine, soft, and fluffy. The family was able to get the right texture for it in the end. It was also named Pelican’s SnoBalls because the state bird of Louisiana is a Pelican.
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By 2017, Pelican’s SnoBalls grew to 80 stores. This was also the year that the Johnsons sold Pelican’s SnoBalls to Gregg Fatool and Randall Wright. The store has over 500 branches now and all are franchise owned.
Pelican’s SnoBalls has over 100 flavors of snowballs. Signature flavors include Pretty Princess (grape and cotton candy), Rainbow (cherry, pineapple, and blue raspberry), Unicorn (pink cotton candy and Skylite topped with whipped cream, and sprinkled with fairy dust), and more. They offer them in sizes for kids and adults and they do not include high fructose corn syrup in their ingredients.
The chain encourages people to franchise their store. First-time business owners are welcome to operate Pelican’s SnoBalls and they assure you that training will provide once you apply to become an owner.
Pelican’s SnoBalls is all about being part of the community. They aim to be a place where families and friends can hang out. They also offer other store owners a chance to sell their snowballs in what they call Mobile Events though this is exclusive to owners with a storefront. For customers who wish to have snowballs at their parties or events, one may also call and book them in advance.
The time it takes to put up a Pelican’s SnoBalls is around one to three months, but the company advises that this depends and varies on different factors and locations. Site locations, financing, lease negotiations, permits, supplies, equipment, and construction are the factors that affect the time it takes to put up a franchise of their snowballs.
The franchise approval process is simple. One must submit a form to Pelican’s SnoBalls that express interest in the franchise. Applicants will then be scheduled for a Discovery Call by their team and go through a background and credit check.
Once you’re approved, you move onto the site selection process. This involves choosing an area where you can develop Pelican’s SnoBalls and then secure a location for a lease. The company will provide support from a team that approves the site for your future business.
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With that finally settled, the Pelican’s SnoBalls’ team will guide you through the final layout and process of the franchise. This is where your corporate training starts. Trainings are web-based which means you can complete this at home. However, there are also 4 days of on-the-job training located at the company headquarters at location they choose and 1 day of classroom training. You will also receive 4 days of support where your store is located.
At present, Pelican’s SnoBalls is headquartered at Gastonia, North Carolina.
How Much Does Pelican’s SnoBalls Make in Profit?
There are no official findings on Pelican’s SnoBalls profit although the branch in Gallatin report serving 700 to 800 snowballs a day. A regular size order of Pelican’s SnoBalls is priced at $3.50. We estimate daily sales would be $2,450 to $2,800 in gross revenue.So is Pelican’s SnoBalls profitable? One of the advantages of selling snowballs is that it’s an extremely high-margin product. You can often sell a snow cone for 10x markup on the cost of ingredients (ice, flavoring, cup, straw, napkin). This leaves you with plenty room for profitability.
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As an example, if you sold a snow cone for $3.00 to a consumer, the product may only cost you the owner 30 cents in ingredients. This is the beauty of the snow cone business.
There are of course variables and other costs to consider. Your profit is affected by so many factors, including a store’s location (rent), taxes, waste, cost of labor, insurance, electricity, population, seasonal operating hours, and competition around your area. In spite of this overhead, you can still turn a significant profit at the end of the day if you’re able to drum up enough business.
Advantages of a Pelican’s SnoBalls Franchise
Businesses like Pelican’s SnoBalls have advantages that make it an ideal small business to franchise. Here are a few reasons to invest in this franchise.
For All Ages
Pelican’s SnoBalls is for all ages. They aim to be a place where families and friends gather for a weekend treat or during their days off. It’s a wholesome place to be making it a community friendly place.
The simplicity of Pelican’s SnoBalls is its charm. It’s a no-frills kind of business. They just serve snowballs with different flavors. The business can also easily cater to events making it an interesting choice of treat at parties or special events like fairs and concerts.
Business with a Purpose
Pelican’s SnoBalls was created by someone who knew what they wanted in a snowball treat. Careful planning and quality control were made into making sure their ice remains fine rather than coarse. This can help differentiate your menu from similar concepts in the area. The business wants to be the “World’s Best Snowball” and they’re making sure they’ll be known for it. And it’s always nice to be in a business that has a high quality product.
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Challenges of a Pelican’s SnoBalls Franchise
Like every franchise out there, there are challenges that come with franchising Pelican’s SnoBalls. Here are some of the hurdles you can expect.
Pelican’s SnoBalls simply offers snowballs and nothing more. There isn’t any other item on the menu like brownies, or cakes, or other pastries. The target market for this business is for people who enjoy a cool treat but you won’t have any other options to increase the average ticket value with one-off products.
Seasonal Operating Hours
Pelican’s SnoBalls aren’t open year round. They close four months (November to February) each year, which only makes sense because ice cold treats during winter aren’t as popular as hot chocolate or coffee in the winter.
But this also puts your sales at a disadvantage when you look at this franchise compared to others that operate year round. What you could have earned during those four months isn’t possible now because the limited menu hinders your operations during winter.
On the flip side of course, the limited number of operating hours can also benefit you depending on lifestyle preferences. Maybe you want to take an extended break and relax? Maybe you want to travel or spend more time with the family? This seasonal schedule makes taking an extended vacation possible unlike other franchise opportunities where you’ll need to be actively running the business year round.
Snowballs have many competitors in the form of ice cream parlors and snow cones. Though you might have an advantage seeing as Pelican’s SnoBalls are unique since due to the texture and branding. Still, you’ll want to size up the local competition and constantly market your brand to raise awareness among customers.
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Is the Pelican’s SnoBalls Franchise Right For You?
If you have the budget and the right location then Pelican’s SnoBalls is an ideal business. It’s simple but can draw in customers young and old. It’s also a different take from snow cones so your customers will be in for a treat from the ones customers get from parks or at a fair.
Is Pelican’s SnoBalls a low-cost franchise to open?
In truth, it’s probably right in the middle of being a low-cost franchise and a medium one. Low-cost franchises are those that have franchise fees that are $20,000 or less and Pelican’s SnoBalls fit this category. However, they have several other fees such as their royalty fees that can make this franchise be a bit more expensive but still relatively low compared to others out there.
What is an alternative Pelican’s SnoBalls franchise?
If you’re still interested in a shaved ice business, check out Kona Ice. They’ve been in operations since 2007 and one of the great things about Kona Ice is that it’s mobile. This shaved ice truck can be anywhere you want it to be.
The franchise fee for Kona Ice is $15,000. Royalty fees are fixed as well: $3,000 annually for the first five years, $3,500 per year on years six and seven, and $4,000 per year for years eight and more. They can also assist you with financing.
With this guide, I hope you were able to learn a lot about Pelican’s SnoBalls and the many advantages and challenges you can expect when you franchise their business.