The Kona Ice Franchise is Real Cool
An Interview with President, Tony Lamb
by Ed Teixeira
In this interview with Kona Ice President, Tony Lamb you’ll learn about
an exciting and growing franchise and how its franchisees have donated
$3,000,000 to schools and sports groups.
There’s a franchise headquartered in northern Kentucky just south of Cincinnati,
Ohio that’s doing just fine. It’s Kona Ice and although its franchise may be
under some radar screens its franchise program and charitable donations are not.
Kona Ice operates 250 franchise territories in 40 States. Each franchisee
operates one Kona Ice per territory consisting of 50,000 to 100,000 people based
on postal zip codes. A franchisee can also purchase a kiosk and cart for indoor
selling, however, they must purchase a truck first. Kona Ice franchise
development is limited to the single unit franchise program, although a number
of franchisees purchase more than one franchise.
Recently, I had the opportunity to interview Kona Ice founder, Tony Lamb.
Tony got started in the Kona Ice franchise the good old way. Tony told
me he was a marketing consultant and one of his clients bought a Mr. Softee ice
cream truck. After working with the client for about a year the concept of a
truck selling ice cream intrigued Tony. He decided to have an ice cream truck
built and he set up a prototype program with partner Ed Reynolds in 2007. Their
product was thinly shaved ice with various flavors on top. Success came quickly.
In 2008 Kona Ice sold 8 franchises, last year Kona sold 80 franchises. Now the
franchisor has 100 franchises operating 250 units with 55 deposits made for the
current year.
 The
Kona Ice franchise has a non-traditional approach to its franchise program.
Tony’s comment: “I didn’t want to have an issue with disputes over royalties so
we have a fixed royalty program. In this all cash business with a fixed royalty
program there is no confrontation or audits involved for both Kona Ice and our
franchisees.” The royalty is $3,000 per month for years 1-5, $3,500 for years
6-7, $4,000 per year for years 8 and higher. Royalties may be paid over a 3-6
month period.
When I asked Tony about franchisee validation he told me that a new
franchisee in Florida had spoken with 42 franchisees and not one had anything
bad to say about Kona Ice.
Despite its highly successful franchise program, Tony is the most proud of
the Kona Ice charitable program. Tony explained that in 2008 with the onset of
the recession we saw sports groups like the Little League and school programs
starting to suffer. “We saw a need to help raise monies for schools sports and
other activities. Our franchisees are encouraged to develop fundraising
partnerships with schools, sports teams and other nonprofit groups. The trucks’
food costs are so low that a franchisee can donate 25 percent of its sales to a
nonprofit organization and still make money. Too date Kona Ice franchisees have
donated $3 million dollars to schools and sports leagues. Our Lexington Kentucky
franchisee has donated $70,000 to local schools.”
In terms of the sales mix, 50% of the franchisees do 100% shaved ice and 40% do
a combination of shaved ice cream and pre-packaged ice cream. The remaining 10%
does a combination of shaved ice, pre-packaged ice cream and confectionary
foods.
A Kona Ice franchise is a true turnkey operation with a $98,900 investment
that includes a $15,000 franchise fee and $83,900 for the truck. Financing is
available through GMAC
Tony Lamb and his team have built a highly successful franchise program with
the appeal of a simple concept, fixed royalty and outstanding fund raising
programs, which cement customer’s loyalty.
Visit the Kona Ice website for
more information.
© 2012 FranchiseKnowHow, LLC
Ed Teixeira is the President of FranchiseKnowHow, LLC. He can be reached at
franchiseknowhow@gmail.com
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