Snow cones–those delicious cups of shaved ice doused in flavored syrup–are a summer favorite of many kids.
While Tony Lamb thought his snow cone startup franchise, Kona Ice, would be a great seasonal business, but much to his surprise he found there was a way to sell a summer treat year-round.
“I always presented the company as a seasonal business and [told potential franchisees] if you’re looking for full-time employment, this isn’t it,” says Lamb. While the trucks franchisees purchased did a great job at outdoor sporting events and school festivals; once kids retreated indoors, they were put in park for three to four months.
A couple of years into the business, several franchisees told Lamb they were interested in turning their seasonal business into a full-time opportunity to extend their sales through the winter months. This meant bringing the snow cones indoors, something Lamb hadn’t considered in his original business plan.
His primary concern was how moving the business indoors would affect the Kona Ice experience. “Our business model is focused on presentation and speed of serving. We can serve 500 people and hour and we have a truck that looks like Disney World. We’d have to be able to duplicate that [to keep our branding],” says Lamb.
Franchisees weren’t the only ones craving more from Kona Ice. Simultaneous pressure from customers who also told Lamb they wanted the product to be available in the winter months at indoor sporting events and fundraisers forced him to re-evaluate the seasonality of his business.
Over the next 18 months, Lamb invested over $100,000 in R&D to come up with this new revenue channel. He researched complimentary businesses that would winterize Kona-Ice’s menu, only to come to the realization that it was snow cones that the customers wanted.
He also recognized the solution had to be affordable to the franchisee, so a large, inflatable indoor Kona Island entertainment center that would cost as much as the truck wouldn’t match the financial ability of franchisees.
In the end, Lamb built eight prototypes of what he called the Kona Mini–a miniature replica of the Kona truck that would cost franchisees one-fourth of the price of a full-size truck. He gave the eight prototypes to his top eight franchisees in different parts of the country. “The feedback was amazing,” he says. In October 2012, Kona Ice rolled out the Kona Mini and have so far sold over 140 to franchisees.
The mini has proved to be extremely profitable, allowing the franchisee to have a separate retail location for a fraction of the price. Not only can franchisees continue their revenue stream during the winter months, but they are now also able to strengthen their relationships with schools, sports leagues and youth organizations by continuing to do business with them throughout the year.
Bottom Line: Lamb says that listening to customers and franchisees forced him to change how he thought about his business.