The growth prospect of the ice cream industry is immense, and you may have noticed several new brands emerge and garner an impressive customer base for their flavor-rich taste in quick time.
While some brands may demand a hefty initial investment cost and royalty for their franchises, others remain competitive.
One such brand is the Kona Ice franchise, which was conceptualized and later established by the founder, Tony Lamb, in Kentucky after facing a bad experience at the ice cream truck.
There are several articles surfacing on the internet, but there’s limited content about its cost and profit. Therefore, in this article, we’ll shed light on:
- How much does the Kona Ice Cream franchise cost and profit?
- What’s the industry’s growth prospects?
- Is Kona Ice profitable?
- Why should one consider buying it?
- How does it position itself among its competitors?
- And at least, we’ll also provide two of its best alternatives.
- Brand: Kona Ice
- Founded: 2008
- Key People: Tony Lamb
- Industry: Mobile Food Franchises
- No. of outlet: 1500 +
- Area served: Worldwide
- Franchise Fee: $15,000
- Royalty Fee: $3,000
- Training Fee: $850
- Initial Investment: $167,115 and $212,100
Table of Contents
Overview of Kona Ice Franchise
Kona Ice, a popular mobile shaved ice chain, was founded in 2008 by Tony Lamb and, since then, has emerged as one of the leading and fastest-growing mobile ice truck franchises in the United States.
With its main headquarters in Kentucky, U.S., the chain has extended its operation to more than 1500 franchise locations in over 49 states in the domestic and international markets.
Kona Ice started its franchise program in 2008 and has gained a reputation as one of America’s most successful mobile food franchises.
However, the chain hasn’t limited itself to the food truck concept. For better franchise penetration and location expansion, the chain has introduced several concepts, including the Kona Kiosk, the Kona Mini, the Kona Trailer, and the latest entry, KEV 2.0.
While the chain has garnered an impressive customer base through its proven business model, Kona Ice has also remained focused on giving back to society.
For that, they partnered with multiple fundraiser programs and donated a substantial amount for the welfare of the American community.
They have been recognized for their delectable, tasty, and customizable shaved ice cream with Flavorwave, one of their patented flavors.
With its affordable setup cost and rising ice cream industry, it will certainly grab attention from ice cream business enthusiasts who want to delve into the industry with the popular brand.
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Key facts about the Kona Ice
| Sr No. | Type | Private |
|---|---|---|
| 1 | Trade Name | Kona Ice |
| 2 | Industry | Ice cream truck |
| 3 | Founded | 2008 |
| 4 | Founders Or Parent Company | Tony Lamb |
| 5 | Corporate Headquarters | Kentucky, U.S. |
| 6 | Number of locations | Over 1500+ |
| 7 | Area served | United States and Canada |
| 8 | Model | Franchise |
| 9 | Menu offering | Shaved ice cream and range of flavors |
| 10 | Annual Revenue | ~ Over 20 million |
| 11 | Website | http://www.ownakona.com/ |
What are the growth prospects of the shaved ice and ice truck industries?
According to the Futuremarketinsights report, the overall snow cone and commercial shaved ice cream industry is valued at $3.9 billion in 2023 and is expected to reach $5.9 billion by 2033, showcasing a CAGR growth rate of 4.3% during the period 2023–2033.
Usually, ice cream is one of our favorite cold desserts. and this accelerated demand in the industry is primarily driven by the rising demand for consumer preferences, unique and flavorful options, highly customizable ice cream flavors, and others.
Over the last few decades, more and more brands have emerged, and they have garnered an immense fan following for their delectable range of ice cream and their flavors. Some of the brand names are sweetfrog, coldstone creamery, creams and others.
There is no surprise in stating that the emergence of several food businesses, including food trucks and pop-up stalls, has played a major role in boosting demand and growth for global ice cream businesses.
How much does a Kona Ice franchise cost?
The initial investment for a Kona Ice could be primarily dependent on the number of trucks you own, the coverage area, and the initial inventory purchased.
To become an approved Kona Ice franchise owner, one may need to have an initial investment of $167,115 to $212,100 for a single unit.
The initial capital includes costs like franchise fees, truck costs, initial inventory, marketing materials, and more.
How much is the Kona Ice franchise fee?
The franchise fee for Kona Ice is $15,000. Furthermore, interested candidates should also meet the financial requirement of at least $30,000 in liquid assets and a net worth of $50,000.
Additionally, the franchises are expected to pay a deposit fee of $20,000, which covers the initial franchise fee of $15,000 and a $5,000 deposit on your truck, which will be sent to you post-construction.
Additional Cost for Kona Ice
Kona Ice is certainly a franchisee-friendly brand that doesn’t levy any percentage of royalty on its gross sales; instead, they charge an annual royalty fee of $3,000 for the first two years, potentially reaching up to $4,000 from the 7th year onwards.
| Type of Fee | Cost and Other details |
|---|---|
| Franchise Fee | $15,000 |
| Deposit fee for truck | $5,000 |
| KEV and Installed Equipment | $124,500 |
| Training Expenses | $850-$950 |
| Initial Inventory | $6,475 |
| Computer System and Software | $200-$1,000 |
| Additional funds | $2000-$10,000 |
| Royalty Fee | $3,000 |
| Agreement Period | 10 Years, Renewable |
| Required liquid capital | $30,000 |
| Net Worth | $50,000 |
| Total Initial Investment | $167,115 and $212,100 |
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How much is the Kona Ice franchise profit margin?
The net margin for any ice truck franchise could probably vary depending on the location, competition, brand image, season, and overall experience of the franchisee operating the brand.
On average, a food franchise operating in the ice cream business model can anticipate daily sales of over $200 to $2000.
However, one must understand that there are several costs involved in operating a food truck.
The plus point with Kona Ice is its low overhead cost of only 6%, compared to the industry’s overhead cost of 32%. This undoubtedly gives its franchisee partner an advantage in terms of generating additional profit margins.
According to the Shaved Ice University, a shaved ice business like Kona Ice Truck Franchise can anticipate an average daily sales of $500 to $2,000, potentially reaching up to $3,000 or $4,000 for high-street locations, festive seasons, and warm areas.
Based on the above estimate, one can expect a net profit margin of over $50,000 on a gross revenue of over $100,000.However, it is needless to mention that the given estimates aren’t official, and for the latest and more accurate information, you may need to check with franchise officials.
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Is the Kona Ice franchise worth your investment?
With a midpoint investment of nearly $170,675 and a calculated estimated margin of $50,000, it could possibly take more than 3 years to recoup your initial investment.
However, if you plan to own more than 4–5 Kona ice trucks or kiosks, the chain may provide an extra discount on the franchise fee and other costs, which could possibly increase your end margin and potentially reduce the duration to recoup your investment.
It is always a better idea to discuss with at least 3–4 existing truck owners to understand more about its profit and with more than 5–6 exited owners, which can help you in making your final decision.
How many Kona Ice franchises have opened and closed?
As mentioned earlier in the post, the chain actually started its franchise program in 2008, and since then it has grown into a brand with over 1500 locations spread throughout the United States and Canada.
Certainly, this enormous expansion didn’t happen overnight; it nearly took them more than 15 years to have a chain of over 1500 trucks.
To basically equate this figure with their growth, one can obviously state that the chain has opened nearly 100 locations every year since its inception. Isn’t it just phenomenal?
| Year | Start of the Year | End of the Year | Net Change |
|---|---|---|---|
| 2018 | 931 | 1061 | +130 |
| 2019 | 1061 | 1181 | +120 |
| 2020 | 1181 | 1304 | +123 |
| 2022 | 1304 | 1500 | +196 |
Why consider owning a Kona Ice franchise?
- Serving nutritional products:
- As a franchisee, you’ll have access to their proprietary food products that meet all the federal nutritional standards for schools, allowing you to not only serve flavorful ice cream but also nutritious foods.
- Patented Flavor:
- While there are several ice cream flavors available on the market, Kona’s patented flavorwave has a separate customer base. It can certainly help its franchisee grab a significant ice cream market share in their area.
- Quick ROI:
- With an initial investment of almost $160K, Kona Ice can achieve a ROI in 3.5 years, with an annual profit potential of $50,000.
- Renowned brands in the industry:
- With over a decade of experience in operating over 1500 locations across the globe and a delectable range of Kona Ice, the chain is certainly a well-developed brand with over a thousand touch points nationwide.
- Fixed royalty of $3000 for the initial few years:
- Unlike other food franchises, Kona Ice doesn’t levy a hefty royalty fee; instead, they charge a royalty fee of $3,000 for the first two years, $3,500 for the next 3–6 years, and $4,000 for the 7th year onwards.
- Financing support:
- For the aspiring candidates, it also offers financial support that can be availed of after making the initial deposit of $20,000, which includes a $15,000 as franchise fee and $5,000 for truck deposit fee
What does it require to start a Kona Ice franchise?
- First and most important, one should be financially well-qualified and have the necessary funding to start a Kona Ice Truck franchise, and they should be ready to invest a minimum of $167,115 and $212,100.
- Although the chain doesn’t demand for any prior experience, owning one would be an extra advantage
- Candidates are advised to dedicate themselves to the Kona Ice business, follow the company standards, and maintain their legacy.
- Interested applicants must undergo and complete the necessary training program offered by the Kona Ice’ team.
- Interested franchisees should have a passion to work in the Ice Cream industry and possess the leadership and financial skills to operate a Kona ice cream truck.
What are the alternatives to the Kona Ice franchise?
Undoubtedly, Kone Ice is one of America’s most loved mobile food franchises that not only offers its franchises at competitive pricing but also levy a nominal annual royalty fee of $3,000.
However, there are a few alternatives that you can consider checking out:
SweetFrog Franchise
SweetFrog was established one year later, from the foundation of Kona Ice. Headquartered in Richmond, Virginia, the chain is another popular frozen yogurt franchise, with more than 300 outlets spread across the country.
However, to become one of their approved franchises, you need to pour in more investment, which could range between $239,500 and $607,000. The investment includes the franchise fee of $30,000 and other costs.
Additionally, the franchisee will be liable to pay a royalty fee of 5% and an ad marketing fee of 3%.
Read more: How to Get sweetFrog Franchise? – Cost & Profit
Freddy’s Franchise
It’s true that Freddy’s doesn’t sell Kona Ice, but they boast a massive fan following for their frozen custard and Steakburgers.
Freddy’s was founded in early 2000, and since then, it has grown into a chain of over 480 restaurants across the country.
One can certainly enjoy great family time and some of their mouthwatering frozen custard, burgers, combo meals, and more.
The initial investment for Freddy’s franchise may range between $794,254 and $2,327,329, including a franchise fee of $30,000.
Read more: How to Start A Freddy’s Franchise – Cost, Fee, & Profit – Freddy’s
How to Get Kona Ice franchise?
The application process is quite easy; one only needs to have the passion to serve delicious ice cream flavors and enthusiasm to work in the ice cream industry.
To embark on the exciting journey with Kona Ice, you need to follow the necessary steps:
- Visit Kona Ice’s official website and navigate to the contact us page.
- Fill in the details, such as name, email ID, phone number, net worth, capital available, city, state, zip, and other required information.
The Editor’s Thought:
While the entire food industry, along with the ice cream sector, is booming, one can certainly grab the opportunity to partner with Kona Ice.
Kona Ice has been in the industry for over a decade and has proven its presence with more than 1500 locations nationwide.
Additionally, with a moderate initial capital and a fixed royalty fee of $3,000 for the first two years, Kona Ice should be a viable pick in the mobile food franchise market.
Kona Ice operates as a niche business, exclusively offering a variety of flavorful shaved ice from its food truck. This singular product focus may impact sales during off-seasons, in low-visibility areas, and with low customer foot traffic.
Good Luck!! Happy Franchising!!
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FAQ
How much does it cost to buy a Kona Ice franchise?
The initial investment required to buy a single Kona Ice food franchise could possibly range between $167,115 and $212,100, including a franchise fee of $15,000.
Is Kona Ice profitable?
It certainly depends on the franchise’s locations. However, based on its midpoint investment of nearly $170,000 and an estimated annual profit margin of $50,000, a franchise owner can recoup their investment in nearly 3.5 years.
Who owns Kona Ice?
Kona ice is owned by Tony Lamb. He founded it in 2008.
How many Kona Ice locations are there?
At present, There are approximately 1500 Kona Ice food trunks present across the country.
