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Kona Ice Franchise ProfileVending & ATM Franchises > Snack Vending |
What is the Initial Investment for a Kona Ice Franchise?
To start a Kona Ice franchise, you will need to prepare for an initial investment ranging from $173,356 to $222,141. This includes a franchise fee of $15,000, which grants you the rights to operate under the Kona Ice brand. Additionally, you should consider ongoing costs such as a 6% royalty fee and a 1% marketing fee on your revenue. Having a net worth between $100,000 and $500,000 is also required to qualify for this franchise opportunity.
What Are the Financial Performance Metrics for Kona Ice Franchisees?
On average, Kona Ice franchise units generate an annual revenue of approximately $167,000. The cost of goods sold (COGS) is around 24.9% of revenue, leaving a gross profit margin of 75.1%. Operating expenses average about $50,000 annually, leading to an EBITDA of $75,429, which is a significant 45.1% of revenue. This financial performance indicates a strong potential for profitability within the franchise model.
How Quickly Can You Expect to Break Even with a Kona Ice Franchise?
Kona Ice franchisees can typically expect to break even within 12 months of opening their unit. This quick payback period is a major advantage for new franchisees, allowing them to recoup their initial investment rapidly. With an average annual revenue of $167,000 and manageable operating expenses, the franchise model offers a compelling opportunity for financial success.
What is the Growth Trend for Kona Ice Franchises?
Kona Ice has experienced steady growth, increasing its number of franchised units from 1,289 in 2021 to 1,476 in 2023. This upward trend highlights the brand's expanding footprint and popularity in the marketplace. With no corporate-owned units in recent years, the focus on franchising suggests a strong commitment to franchisee success and community engagement, making it an attractive option for aspiring entrepreneurs.
Kona Ice Franchise Financial Requirements
Below, you’ll find an overview of the initial investment needed to launch the business, along with the ongoing fees required by the franchisor to maintain operations over time.
The minimum total assets (minus liabilities) you must possess.
Net Worth Required:
The estimated period to recoup your total investment.
Investment Payback:
The initial fee paid to join the franchise system.
Franchise Fee:
Ongoing percentage of revenue paid to the franchisor.
Royalty Fee:
Regular contribution toward the franchise’s advertising fund.
Marketing Fee:
The estimated timeframe to recover your initial costs.
Breakeven Time:
The total amount required to launch the franchise.
Initial Investment:
The minimum liquid capital you must have on hand.
Cash Required:
The typical yearly revenue generated per franchise location.
Average Revenue:
The middle value of yearly revenue among franchise locations.
Median Revenue:
The largest reported annual revenue among franchisees.
Highest Revenue:
The smallest reported annual revenue among franchisees.
Lowest Revenue:
A broad sector defining similar types of franchise businesses.
Industry:
A more specific division within the broader industry.
Category:
The key individuals guiding the franchise’s strategy and growth.
Leadership:
The official business address of the franchisor’s headquarters.
Corporate Address:
Available financing options to help start the franchise.
Funding Year:
The main organization that owns the franchise brand.
Parent Company:
Kona Ice Franchise Unit Growth Summary
A breakdown of corporate, franchised, and total units, with yearly net changes.
Total Units
Franchised Units
Corporate Units
| Units | 2021 | 2022 | 2023 |
|---|---|---|---|
| Total Units | 1303 | 1363 | 1476 |
| Net Change YoY | 60 | 113 | |
| Franchised Units | 1289 | 1363 | 1476 |
| Net Change YoY | 74 | 113 | |
| Corporate Units | 14 | 0 | 0 |
| Net Change YoY | -14 | 0 |
Initial Investment
The Kona Ice franchise offers a relatively low initial investment range of $173,356 to $222,141, making it an attractive option for aspiring entrepreneurs. The initial franchise fee is set at $15,000, which provides access to the brand's established business model and support system.
Ongoing Fees
Franchisees are required to pay a royalty fee of 6% on gross sales, along with a marketing fee of 1%. These fees contribute to the brand's overall marketing efforts and operational support, ensuring franchisees remain competitive in their local markets.
Financial Performance
On average, Kona Ice units generate annual revenues of approximately $167,000, with a median revenue of $160,000. The range of annual revenue can vary significantly, from a low of $131,000 to as high as $1,100,000, depending on factors like location and management.
Breakeven and Payback
Franchisees can expect to reach breakeven within 12 months of operation, which aligns with the investment payback period. This quick return on investment is a compelling factor for potential franchisees looking for a profitable venture.
Growth and Expansion
The Kona Ice franchise has shown consistent growth, with the number of franchised units increasing from 1,289 in 2021 to 1,476 in 2023. This upward trend indicates a strong brand presence and potential for further expansion in various markets.
Support and Training
Kona Ice provides comprehensive support and training for franchisees, equipping them with the necessary tools and resources to succeed. From initial onboarding to ongoing operational guidance, franchisees benefit from a robust support system designed to enhance their business performance and customer satisfaction.
Frequently Asked Questions
The initial investment for a Kona Ice franchise ranges from $173,356 to $222,141, which includes the franchise fee and other startup costs.