Thinking about franchising? You have got a great idea there. However, you always have to look at the pros and cons of this business model unless you want to be hit with many surprises on your way, and you won’t want to welcome any of them.
Also, everything depends on the franchise you choose since success is often determined by how well it goes with your preferences and ambitions and if you want to truly invest time in it.
With this clear, we will cover one that has become quite popular over the last decade: Kona Ice.
Despite being new compared to others in the market, be it in the USA or internationally, this franchise has gained a lot of recognition due to the opportunities it offers. However, is it really that great, and should you be investing in it right away?
We will unveil any mysteries and make sure you are able to make a well-informed decision if you are considering this franchise as your next investment.
Frosty Franchise: Kona Ice Origins
You will notice that ALL businesses have a story to tell.
Sometimes it is fake and made up by someone with some talent with copywriting. Others are real, but probably a bit exaggerated with some details and situations that probably didn’t happen.
And then, you have a low percentage of real-life stories but told in a great manner, so you feel identified, but without any details that make it fake, only even more real.
In the case of Kona Ice, you will have the latter.
This franchise started with its founder, Tony Lamb, in 2007 when his 3-year old daughter had an unpleasant encounter with the ice cream truck man.
She was served ice cream that had been frozen-burned. The truck smelled of smoke, and the driver was not wearing a shirt.
In our opinion, this is quite relatable, and we totally believe this is precisely what happened.
Would we feel pushed to open a business around this? Probably. After all, who wants their children looking at men without shirts, untidy, awful trucks, and the worst of all, not getting the dream ice cream? (Psst! No one!).
However, we wouldn’t have come with the idea at the moment, but Tony did.
He came up with the idea of having a tropical-themed, mobile shaved ice franchise that could give kids their dreamed sweet and any adult and person who wanted it.
This was possible thanks to a special client and then business partner that he had at the time and continues to be part of the team.
He started the company with $500.000 provided by his partner, and only 51% of the company belonged to him during its early years.
It took hard work, but the dream came true in 2007 when Kona Ice’s trucks were finally rolled onto the streets after five prototypes and numerous tweaks and modifications.
The company sold 13 franchises in its first year. Lamb stated that Kona Ice experienced “30-40% attrition in nearby sales” the following year, so he decided to restructure his business model.
Lamb made additional changes in 2009-2010 to comply with federal guidelines.
The beauty about this franchise and its products lies in working in low-sugar ice creams that kids or anyone could eat without worrying much about the ingest of the product.
Although it was hard, Lamb and his business partner were able to succeed in this process.
In 2021, Tony currently owns 53%, and Kona has grown up to 500 franchises with 655 trucks on the roads in 48 states.
Texas has more Kona Ice franchises than any other state (more than 100), while California and Florida have strong growth markets.
Some Kona franchisees have begun to add pre-packaged frozen ice creams into their trucks in addition to the Kona shaved Ice product.
Hot products, such as gourmet cocoa and coffees, are being offered to customers in colder regions. This is because the temperature drops towards the end of the season (which typically lasts from March through November).
The “Kona Mini” is a miniature version of the company’s regular truck but without the engine. The unit is available to franchisees to allow them to bring their products inside and be able to continue operating all year.
Is It All Sweet for Franchisees?
Now, let’s be real, a founder and all the people involved that aren’t employees will talk wonders about their companies and franchises.
Therefore, when you’re considering investing in it as a franchisee, you need to look at the sweet part they are trying to sell you but also the sour one that could make you run away from the alternative.
Is Kona Ice going to be the latter? We don’t think so.
Although it is hard work, franchisees have many benefits when investing in this business model and with this franchise in particular.
What you truly need to consider is how much you will invest in this business.
Franchising isn’t cheap. We just want to make sure you’re aware of this from the beginning.
Since it involves starting a business from zero, but with the company’s help, you can expect it to be quite expensive due to logistics, training, and additional expenses.
Prices will always vary depending on the franchise you choose, and in the case of Kona Ice, it can be pretty high compared to others due to the elements you must cover.
The company splits the initial investment into three parts:
- Franchise fee – $15.000: you will get the support and access to marketing materials and all the assistance required to set the franchise.
- Inventory pack – $5.500: this includes a support pack that guarantees revenue generation of about $50k.
- Truck – $119.850: being the most expensive part of the investment yet, the most crucial in terms of being mobile.
Having this in mind, the initial investment reaches the $140.000 mark, and although you don’t have to pay for it all at once, it is needed for you to become a complete franchisee later.
You must, at least, start with the $20.000 deposit that covers the franchisee fee and inventory pack. The truck can be paid later.
Now, suppose you invest in it. This includes the fee and pack as well as the truck. When do you start?
We have to admit that one of the strengths of Kona Ice is that, unlike other franchises, you can start quite fast.
Many franchisees start within a month or two. Sometimes, even less.
Everything depends on logistics, how fast the truck is ready, your marketing, and if you are prepared to get started.
Yes or Not? – Pros & Cons of Kona Ice
If there’s something you must know about franchising is that the main beauty is not having to start something from zero alone.
You have the franchise’s support, assistance, training, and someone next to you to guarantee you start well and even progress to success.
However, it doesn’t mean everything is amazing when you choose to franchise.
You have to evaluate the pros and cons of the business model but also the company you’re choosing. Otherwise, you can end up losing lots of money and time.
In this case, we have compiled the main aspects:
Pros:
- You get started quicker than with other options or with a business of your own.
- The franchise has a good reputation and great reviews about its products so far.
- Support and inventory are always provided and easy to access.
- It is mobile, and you can work around or in a fixed place according to your needs and preferences.
- It is a profitable niche, and you can expect to make lots of revenue over time.
Cons:
- Like any other franchise, it is very expensive to start.
- You have to pay royalty fees every 3 or 6 months for the rest of your life.
- Situations like the current pandemic can affect the business and your revenue.
- It requires hard work.
- You must follow the franchise’s rules and norms to remain in business.
Kona Ice has proven to be quite profitable regardless of its decline in 2020 when COVID.19 stroke. However, even now, in 2021, with the pandemic still happening, the business has shown to remain stable.
It is a great option when it comes to an investment as long as you’re willing to compromise yourself to this type of business and want to handle the initial investment and time for ROI and revenue.
A Cheaper (& Easier) Business Model
What if we tell you that we have a business option that can generate as much money as this one without less investment, work and lead you to passive income? Would you be up for the challenge?
Franchising is a safe play for many, but a very expensive one, and you aren’t guaranteed to succeed regardless of your efforts.
In our opinion, it is a very unstable bet and requires more work than we are willing to handle.
Instead, you have options like lead generation.
You can do it from home, invest hundreds instead of thousands, have passive income over time, and even make more money.
The best part is that even if you choose to franchise or start any other business, lead generation will come in handy to bring clients your way.
Now, how does it work? It is quite simple:
- You choose a niche with companies near you. E.g.: septic tanks or window replacement services.
- Contact those companies and offer them to generate leads (potential clients) by building websites.
- When one accepts, and you close a deal, you build its site.
- You must rank the site on Google to guarantee organic traffic that converts into leads.
- When you generate leads, you only need to get paid a commission for each one generated.
- You can have as many sites and generate many leads.
The way this benefits franchises as well is basic: they can generate their own leads and don’t have to pay someone else.
Therefore, you might consider this either as your primary business or secondary for your own good and additional gold mine.
However, keep in mind that you need to learn how to handle all the processes and for it, this training program that starts for beginners and guarantees you make money before completing it is the best idea.
Want more info? Here it is!
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