Kona Ice
Kona Ice offers flavored shaved ice, blended beverages, and ice cream through mobile businesses. Known for tropical flavors and summer treats, it operates in the frozen dessert and beverage franchise industry.
Kona Ice franchise FAQ
How much does it cost to open one — the total initial investment?
The total initial investment necessary to begin operation of a Kona Ice franchised business ranges from $189,441 to $234,366. This includes an initial franchise fee of $15,000 [p.12], the cost of cups and flavorings along with other initial inventory totaling $6,475 [p.13], and between $172,966 and $188,291 that must be paid to the franchisor or its affiliates for pre-opening assistance [p.1].
What is the initial franchise fee?
This isn't specified in the excerpts. The provided FDD excerpts do not contain information about an initial franchise fee; instead, they discuss a scenario where no initial franchise fee is required for a transferee franchisee [p.305] and details about additional reservation fees [p.23].
What are the ongoing royalty and advertising fees?
The ongoing royalties include a mandatory payment, with the amount depending on sales levels [p.4]. Additionally, franchisees participating in the KEV Monitor Advertising Program will pay a 15% royalty of the Advertising Gross Sales generated from this program [p.23]. This isn't specified in the excerpts for other specific advertising fees beyond the monitor advertising.
How long is the initial franchise agreement, and can I renew it?
The initial term of the franchise agreement is 10 years [p.118]. You may qualify to enter into a maximum of two successor franchise agreements if you meet the conditions for renewal specified in the FDD [p.118].
Can I sell or transfer my franchise, and what does that require?
Yes, you can transfer your ownership of the franchise, but it requires approval from the franchisor. The transfer must comply with applicable laws and any other conditions reasonably required by the franchisor [p.142]. Additionally, a transfer fee is due, which varies based on whether the transferee is an existing Kona Ice franchisee or not [p.141]. This isn't specified in the excerpts.
On what grounds can the franchisor terminate the agreement?
This isn't specified in the excerpts. The provided FDD excerpts primarily cover termination rights for franchisees and do not detail the grounds for a franchisor's termination of the agreement.
What financial requirements — net worth and liquid capital — do I need to qualify?
This isn't specified in the excerpts.
Do I get an exclusive or protected territory?
Yes, you receive an exclusive territory based on the geographic area and population properties within that area. Your Protected Territory will be identified in an exhibit to your Franchise Agreement and you are restricted from operating outside these boundaries unless approved by the franchisor. [p.43]
What training and ongoing support does the franchisor provide?
The franchisor provides initial training through Kona Kollege, which includes operating a KEV under supervision and using instructional materials such as equipment manuals and operational guides. This training is provided at no cost for one attendee, with travel expenses covered by the franchisor. Ongoing support is overseen by Tony Lamb and managed by the Operational Support and Development Department involving experts from various departments. [p.41, p.42]
How many franchised outlets are there, and how many have closed or been terminated?
The FDD does not specify the exact number of franchised outlets currently in operation or those that have closed or been terminated. However, it mentions that as of the Issuance Date, no franchisee organizations are sponsored or endorsed by the company [p.65], and there is a list of terminated franchises provided on page 215 [p.215].
Does the franchisor share any financial performance or earnings information?
The franchisor may provide actual records of an existing outlet if purchased, but it does not make representations about a franchisee's future financial performance or past performance of company-owned or franchised outlets. Financial performance information can be given only if provided by the actual records of an existing outlet or if the franchisor supplements the information in Item 19 with possible performance scenarios [p.55].
What am I restricted to selling, and where must I buy supplies?
You are restricted to selling only the products that the franchisor designates and approves [p.28]. You must obtain services and products from designated suppliers, approved suppliers, or according to the franchisor's specifications [p.28]. This includes items like branded merchandise, business management software, additional equipment, flavoring, and insurance [p.28].