KONA ICE: A Profitable FRANCHISE Opportunity in 2023? 🤔

Kona Ice Inc was founded in 2008 and began offering Kona Ice franchises that same year. To this day, the company has kept its original name and it is based in Kentucky.
The ice cream industry has a lot of demand, and because of this, there are countless companies that focus on selling ice cream. Over the years more and more ice cream franchises have opened and one of them is Kona Ice, which sells ice cream and related products in a mobile environment.
Read here to learn more: www.vettedbiz.com/kona-ice-fr...
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00:00 Introduction
00:41 Locations & Competition
01:31 Investment Amount, Franchise fee & Royalty
02:42 Failure Rate & Franchise For Sale Rate
04:07 Financials
04:42 Conclusion
#KonaIceFranchiseCostWorthItIn2022 #VettedBiz
There are currently 1304 Kona Ice franchises in the United States and that number is growing every year.
Tony Lamb is the founder and CEO of Kona Ice. Tony took inspiration from a bad experience with a “creepy ice cream truck” to start the biggest mobile ice cream franchise in the country.
Kona Ice serves a market with a lot of strong competitors like Häagen-Dazs or Baskin-Robbins. However, it delivers the product in a way that most good ice cream shops do not.
We will analyze if the potential returns are worth the initial investment for a Kona Ice franchise.
The initial fee for a Kona Ice franchise is $30,000. The upfront fee must be paid before opening the restaurant. A fee of $10,000 must be paid for any additional franchise.
The estimated initial investment for beginning operations for a Kona Ice franchise is between $150,400 and $174,150.
Royalty: $3,000 for the first two years, then $3,500 for years three through six, $4,000 for years 7 through 10.
Technology Fee: $10 to $159.99 per month.
Kona Ice is continuously looking for passionate individuals that love children and want to open a Kona Ice franchise.
Kona Ice requires you to have a net worth of at least $50,000 and a liquid capital of at least $30,000. The application process is similar to most franchises, you just fill out an application and someone will be in touch with you.
2015 Kona Ice’s Average Profit: $94,868
Kona Ice operation costs are relatively low. While the average franchise overhead is 32%, Kona Ice’s overhead is only 6%. This allows for profit margins of up to 50%.
Based on the average profits claimed by 534 Kona Ice owners, we can estimate that given a midpoint investment of $162,275. It would take you less than 3 years to recoup your investment.
After a few years in the business, when you go to sell your franchise based on the median multiple of .84 and gross profit of 2015 of $94,868 it would sell for about $79,689. This is 50% of the midpoint initial investment.
However, since the initial investment is so low, it is not uncommon for someone to open multiple Kona Ice trucks which improve profit dramatically. It is needless to say that the key to making great profits with Kona Ice is to operate multiple trucks.
Kona Ice is continuously looking for passionate individuals that love children and want to open a Kona Ice franchise.
Kona Ice requires you to have a net worth of at least $50,000 and a liquid capital of at least $30,000. The application process is similar to most franchises, you just fill out an application and someone will be in touch with you.
Kona Ice does not disclose the financial information of its franchisees. According to a study made in 2015, the average Kona Ice truck draws in $94,868 but keep in mind that it is not an official figure.
2015 Kona Ice’s Average Profit: $94,868
Kona Ice operation costs are relatively low. While the average franchise overhead is 32%, Kona Ice’s overhead is only 6%. This allows for profit margins of up to 50%.
Based on the average profits claimed by 534 Kona Ice owners, we can estimate that given a midpoint investment of $162,275. It would take you less than 3 years to recoup your investment.
After a few years in the business, when you go to sell your franchise based on the median multiple of .84 and gross profit of 2015 of $94,868 it would sell for about $79,689. This is 50% of the midpoint initial investment.
However, since the initial investment is so low, it is not uncommon for someone to open multiple Kona Ice trucks which improve profit dramatically. It is needless to say that the key to making great profits with Kona Ice is to operate multiple trucks.
Kona Ice is continuously looking for passionate individuals that love children and want to open a Kona Ice franchise.
Read here to learn more: www.vettedbiz.com/kona-ice-fr...
Want to speak with a franchise specialist about Kona Ice or another franchise? Click here: share.hsforms.com/1ZtNM19w4R8...

[@skylerwalker5813]

Kona Franchise owner here. We truly do only pay a royalty. There is ZERO % taken from us off of sales. The transfer % you talk about doesn't account for tons of movement between us franchisees in selling equipment to each other. Most of the time, its because someone is retiring/downsizing their business and instead of having 5 trucks, maybe they want to run with just 2 instead. Doesn't mean they failed. I'm sure it happens but I've been in for almost 5 years now and I only know of two franchisees who "didn't make it" in my 5 years. As far as revenue, it of course varies depending on someone's goals and how hard they work, but I'd say 80% of franchisees are pulling in 110k+ per year per truck now. I do more than that and I'm in Michigan, so I only run 5-6 months during the year. And we sell shaved ice, not ice cream. There are some who sell ice cream in addition to shaved ice, but its an incredibly small % of those that do.

[@Vettedbiz]

Thanks for the insights!! We're definitely due to create a new video based on your input and further findings received. It'd be good to have the content come directly from a franchisee. Would you be open to a 20 minute interview?

[@dcarreira4913]

Hello, as a franchise owner how do you go about getting business? Is it just basically drive around and park somewhere populated or more than that? Thanks for you response.

[@surfturftv7312]

@@dcarreira4913 No, this is an event catering truck primarily. it is RARE to sit and sell somewhere...

[@surfturftv7312]

Another franchisee here. I agree with everything that Skylar has said. Great experience 8 years in. I have three trucks.

[@ChrisSmithFW]

Very insightful and helpful. Thank you very much.

[@ytthegamingpilotttv7985]

Kona ice employee here, I don’t know how much but it brings in a lot of money if you do it right. Keyword do it right

[@Vettedbiz]

Any tips for properly managing a Kona Ice?

[@joshuaabrams2852]

I work for Scott Lamb the brother of the founder. (Kentucky and Florida) Keep in mind this is all hear say between employees the common number thrown around is 200,000$ a year Per truck. That does sound high but this is also one of the more successful franchises with over 8 trucks in kentucky and 4 in Florida. Along with 3 or 4 Tom’s Coffee trucks that are made by Kona Ice as well.

[@Vettedbiz]

Thanks for the input!

[@curtmaier3965]

Patrick, excellent video on Kona Ice as with all of your reviews. One thing about transfer rate... you reference the 16% at Kona Ice as being 'high' but think about this: EVERY business (including franchises) changes ownership every 8 years on average for a variety of reasons. Some may be 2 years and some may be 40 years but the average is less than ten, which is the typical franchise agreement term. By the 8 year point, the franchisee should have certainly recovered all of their initial investment and should be selling their franchise at a price that delivers a ROI that exceeds whatever hurdle rate they had in the first place when they made the commitment to invest. Good job on your reviews. You are providing a GREAT service in terms of education to those considering a franchise investment. KEEP CHARGING!!!

[@Vettedbiz]

You're right Curt! Much more important is the failure rate. We'll have to research further the price ex franchisees of Kona Ice have sold for.

[@brussell1504]

Ice cream? Ya sure about that? Hahaha. Shave ice maybe.

[@Vettedbiz]

You're right! Shaved ice, a frozen dessert

[@FredMas-gt2uh]

Does a food truck company in Florida manufacture the trucks for Kona ??

[@glennysantos9641]

Is it possible to buy an already existing franchise?

[@Vettedbiz]

Yes but for Kona Ice most of the resales happen between existing franchisees from what we understand

[@Sin.Atonement]

It's not ice cream, it's snow cones (shaved ice), thanks for the information.

[@Vettedbiz]

I know :( my bad

[@Sin.Atonement]

@@Vettedbiz lol sorry, I read the comments after, uhhhh what if I told you I was about to create my own franchise selling trailers with my own invention and logo design, nothing to do with my you tube channel, your video gave me a ton of insight. Thank you

[@johndamato5912]

Sorry it’s not an ice cream truck, and what about Mister Softee??

[@Vettedbiz]

We'll have a look!

[@collettegay1432]

How much does it cost to have a franchise?

[@Vettedbiz]

Hi Collete, for Kona Ice you can review how it costs and more information here: www.vettedbiz.com/franchises/kona-ice/

[@johndamato5912]

PS, you know they do not sell ice cream but yet you keep on mentioning it in your video I guess some people just don’t know the difference

[@Vettedbiz]

You're right! Noted and will update for next video. Are you a franchisee of Kona Ice?

[@johndamato5912]

I’m a Mister Softee , we have been around since 1956 we offer a fresh made product made on truck.

[@Vettedbiz]

@@johndamato5912 I can review the latest Mister Softee FDD, or better yet, interview you if you're interested. Would love to hear about your experience. I can be reached at PatrickATvettedbiz.ocm

[@warrenstohler1673]

You might want to do your research. This is NOT an ICE CREAM business. We sell shaved ice. How many times can mention ICE CREAM???

[@Vettedbiz]

Noted in prior comments. Sorry!!

[@noeljasminebourroughs7845]

Your video would have a lot more value if you knew what product you were talking about. Although some franchises add ice cream as a topping most do not carry it at all. Do your homework before you try to make a buck talking uninformed nonsense.

[@Vettedbiz]

You're right. I said ice cream and should have said shaved ice. Anything else that should have been corrected?

[@amt7877]

Yes 99% of the trucks sell shave ice

[@dillonjones978]

How does one contact existing truck owners?