Rocket Fizz Franchise Opportunity Review

February 19, 2019


Candy stores and soda shops were all the rage during the mid to late 1900’s. It can be hard to find a place that matches the nostalgia with the variety of products in this day and age but Rocket Fizz Soda Pop and Candy Shop has done just that. They are a retail chain specializing in candy and bottled soda that will transport you to a different time. They are currently looking to expand their brand and are selling franchise licenses to assist with that goal. Entrepreneurs who are seeking a retail franchise opportunity are encouraged to check out Rocket Fizz to determine if it will be a mutually beneficial fit.

 

The History of Rocket Fizz

 

In 2009, Ryan Morgan and Rob Powells developed their idea for an old-fashioned candy store and soda shop and opened their first location in Camarillo, California. They started with an idea to bring back the candy shops that were so popular in the 1960’s through the 1980’s. They offer one of the largest and most unique varieties of candy and soda in the world. They have their own line of glass-bottled sodas, with flavors ranging from ranch dressing to chocolate and peanut butter, and everything in between. Their retro candies are also popular with customers of all ages.

 

Franchise Location Statistics

 

Before deciding on a franchise license to purchase, it is important to evaluate each franchise to determine its probability of success and sustainability. Rocket Fizz has been selling franchises since 2010, and their initial license period is 10 years, making some of their statistics incomplete. None of their franchised locations have yet hit the end of their licenses, so there is no data concerning the number of contract renewals. This could leave a rather large void in your research and make it harder to come to a decision.

 

Despite their short time of franchising, Rocket Fizz does have a decent amount of information regarding the success rates of their existing locations. Unfortunately, it’s not all good news.

 

They are growing at a slow rate. The net franchise growth rate is determined by taking the number of franchise locations that are opening and subtracting the number that are closing. Rocket Fizz has a net growth rate of 67. This score sounds like it would be pretty high, until it is compared to the national average of 97. Any growth is good, but a truly healthy franchise system should be growing at a rate much closer to the average.

 

Another factor in determining the health of the system is the turnover rate. This is determined by adding together the number of locations that have been reacquired, transferred, terminated, not renewed (whether by choice of the franchisor or franchisee), or otherwise ceased operations, and dividing that number by the total number of locations that continue to operate. A healthy franchise will have a turnover rate of approximately 5 percent or less. Rocket Fizz has a turnover rate of 14.68 percent. This is a staggering number already, but when considering the fact that no franchised locations have yet reached the end of their license period, it becomes scary. Without having any non-renewals to factor in, the number of closed or transferred locations points to a problem within the franchise system itself.

 

None of these factors is a guaranteed indicator that the franchise will fail. Each franchise location will have different results, based on a number of additional factors, such as experience and practice of the operator, location demographics and size of market, and current economic climate. Growth and turnover rates should be looked to as part of a thorough research endeavor only, and no decision should be made off of those factors alone.

 

Launching a Rocket Fizz Location

 

Getting started with a Rocket Fizz franchise is not as complicated as you might think. They are very helpful to their franchisees with the start up process. They will assist with the real estate scouting to find the perfect place for the new location, and even help with lease negotiations. They will provide guidance for the build-out of the new location, including assisting with securing permits and acquiring qualified architects and contractors to design and complete the build-out. With all of the ways that Rocket Fizz is willing to be involved with the launch process, it takes a lot of the pressure off of the new franchisee.

 

To get started with Rocket Fizz, you will first need to apply for a license. They require a preliminary application that will result in a phone consultation. If after the consultation, both parties agree to move forward, a second, more complete application will be required. If that application is accepted, a license will be granted, given the applicant has the $54,000 fee available in liquid cash. If you are in the market for more than one location, Rocket Fizz does offer a discount for the purchase of multiple licenses.

 

After the license is procured, additional expenses will be incurred that the new franchisee will also have to have capital to cover. Purchasing or renting out the space, building it out to match Rocket Fizz’s specifications, hiring staff,  and stocking inventory will all be required before your store can open its doors and start serving customers. It is estimated that a new Rocket Fizz franchisee will need $126,000 and $308,000 in start up capital. For a franchise location, this is actually a smaller start up cost estimation than a lot of retail stores or restaurants. Small storefront space and cheap inventory are likely large factors in this low cost. With low start up prices, it will be easier for your location to get a return on investment and start turning a profit faster.

 

Regardless of a franchisee’s business experience, opening a new location of a franchise you are unfamiliar with will come with some obstacles. Rocket Fizz offers classroom-style training to their new owners to help make the transition as smooth as possible. The training will cover proprietary information the operators will need to know in order to stay compliant with the franchise license, as well as information regarding the product being sold.

 

Running a Successful Location

 

Once the location is up and running, it will be extremely important for the franchisee to closely monitor all operations. As a franchisor with some obvious problems within its system, Rocket Fizz has a higher likelihood of failure, but a conscientious owner/operator can help navigate the difficult times and keep the store afloat when others have failed. One of the most important ways a franchisee can help its location avoid failure, is to monitor costs and revenues and make adjustments when necessary and able, such as controlling the costs associated with staffing and inventory.

 

There will be costs that will be unavoidable for the franchisee and will be out of their control in terms of adjustment. For instance, Rocket Fizz will consistently charge its franchise locations royalty fees and advertising fees. These are non-negotiable terms of the license and must be paid in full regardless of performance of the store. The rates for these fees are determined by the franchisor, and therefore, out of the hands of the owner/operator.

 

Currently, Rocket Fizz is charging its franchised locations a royalty fee of 5 percent of sales. Their advertising fee is 2 percent. These fees cover the use of all intellectual property of Rocket Fizz, as well as all advertising costs. Rocket Fizz does use celebrity personalities in their advertising campaigns, which are covered by the fee. Occasionally, they also hold in-store promotional events featuring their celebrity spokespeople, giving franchisees the opportunity to host these events and draw in customers.

 

All franchised companies have a set of rules and guidelines for their franchisees to follow. This is important for the sake of continuity and cohesiveness among locations. Rocket Fizz places a high priority to keeping the variety of products offered in each store very similar. They are highly focused on ensuring items that are offered in one store are offered in most, if not all, other locations. The ability of a customer to be able to purchase their favorite candy, no matter which location they walk into, is incredibly important to the brand and they will work with the franchisee to help make sure the inventory is available.

 

Making the Choice

 

Just as each franchise opportunity is different, so is every potential owner. Certain business models work better for certain types of people. The more you know about yourself and about the opportunity being presented, the better chance you have of making a solid, informed decision before investing. Having this information prior to investing could be the single most important factor in determining if your business will succeed or fail.

 

When dissecting the information that has been provided, it is important to note that all of the statistics are averages and do not reflect the actual results of all locations. While the averages for Rocket Fizz point to some problematic areas within their system, they are still able to maintain profitable locations. They have been selling franchise licenses for eight years now, and are still posting a positive growth rate, even if it is lower than the national average. That tells us that there are franchisees out there, a decent amount of them, that are finding success with this franchisor and that there is room for this kind of business in the right neighborhoods. While eight years is not a large time span, there have been franchises that have failed in less time. Rocket Fizz is still operational, and still growing.

 

In the end, it is up to the potential owner and Rocket Fizz themselves, if entering into a franchise agreement is in the best interest for both parties. Being armed with your research, and a knowledge of your own skills, strengths, and weaknesses will be the best factors for choosing an industry and a franchisor. If you have the knowledge and commitment to overcome any possible problems that appear to be present within Rocket Fizz as an organization, you could be one of the locations that are keeping the company in the red as far as growth is concerned. Strong franchisees have the potential to boost a business that may otherwise sink. Rocket Fizz could use a few more owners with the ability to fight through the struggles, and help bring the soda pop and candy shop business back to Main Street America. The right business combination could result in an explosion of Rocket Fizz locations all over the country.

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