Rocky Mountain's franchising strategy pays off

By Alex McNally

- Last updated on GMT

Related tags: Revenue, United states, Income, Rocky mountain chocolate factory

Rocky Mountain has shot up 64 places in the Forbes annual listing
of the US's 200 best small companies, recognition
of an aggressive franchising and marketing strategy that
turned it into a major confectionery player.

US-based the Rocky Mountain Chocolate Factory is now placed at number 60, moving to the top end of the table from last year's spot of 124. The company claims to own the largest chain of retail chocolate stores in the US, but wants to widen this lead with further franchising deals. The Forbes' ranking is compiled from publicly trading companies with sales between $5 million and $750 million. To qualify, a company must have a share price above $5. Qualifying companies are ranked according to return on equity, as well as sustained sales and earnings growth over 12-month and five-year periods. Rocky Mountain's chief executive Frank Crail said : "Our franchise network is the largest chain of retail chocolate stores in the United States, in terms of the number of stores in operation, and we are proud that the company's financial performance ranks among the top small publicly-traded companies, as well." ​Revenues from royalty and marketing, franchise fees and retail sales totalled $1.7m for the quarter, and retail sales were boosted by the opening of four new franchised stores during the quarter just ended, with eight or ten more scheduled during the current quarter. ​A company spokesperson said the firm was on track to reach a target of between 35 to 40 stores by the end of the fiscal year ending 28 February. It has been a good year overall for the company, which reported an eight per cent revenue increase earlier this year. Sales revenue was up to $7.3m (€5.3m) in their first quarter report for financial year 2008, compared to $6.8m (€4.9m) for the same period last year. Operating margins remained similar, at 22.3 per cent in the first quarter ended 31 May compared to 21.7 per cent in the same period last year. Operating income was $1.6m compared to $1.5m the same quarter in 2006. Net earnings for all operations increased 11 per cent to $1m (€0.7m) compared to the three months ending 31 May 2007. The Colorado-based company is an international franchiser of gourmet chocolate and confectionery stores, as well as a manufacturer of premium chocolates and other confectionery products. It operates 319 stores in the US, Canada and United Arab Emirates. In 2002 the firm won the National Paperbox Association's 'Gold Award' for its line of gift packaging designed for franchised retail stores.

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