A Chance on Chocolate
With parties and corporate clients, Chocolate Works is hoping its specialized model will win over many franchisees.
Step into a Chocolate Works shop and you will feel like you have walked through the gates of Willy Wonka’s chocolate factory—only without the Oompa Loompas. The stores have chocolate and candy of every size and shape, hundreds of candy bins, dozens of different types of truffles; and molds of everything from gorillas to hearts to Eiffel Towers, and Lamborghinis to tennis rackets.
Stuart Levenberg and Ken Stein are co-owners of the Kensington Company, which is a franchise consulting firm that also helps franchisors find potential franchisees for their respective businesses. Chocolate Works is one such franchise that Kensington Company manages.
Levenberg and Stein love the Chocolate Works concept so much that their families are part of it. Their “better halves,” Donna Stein and Rachel Levenberg, run the day-to-day operations in the Bellmore, NY, Chocolate Works store. Currently there are seven Chocolate Works franchises in the Northeast with an additional fifteen scheduled to be launched by the end of the year.
Holidays such as Valentine’s Day and Christmas are obvious times for large sales volumes but there are plenty of additional opportunities as well. Birthday and themed parties are hosted all year and the store’s workshops boost customer traffic.
A series of chocolate parties separates the business model from others of its kind. It’s these parties that help establish the brand as something special. “We consider this something very unique—it’s not just a party in a chocolate store, but the kids actually become chocolatiers,” Levenberg says. “They get to [pour their own] molds and decorate them and use the enrobing machine. It brings new people into the store.” He points out that these chocolate parties are not just for kids. “We have ladies’ night, camps, workshops, charities, activities for the seniors, date night, etc.” Levenberg adds. “Our classes provide wonderful opportunities for budding chocolatiers to show off their artistic potential, and break into the chocolate-making scene while molding and designing their own chocolate in a fun and relaxed environment,” Levenberg says. “This is not a passive business, the more you put in the more you will pull out.”
In addition to the parties, Levenberg says gift giving is big year-round for major corporations and small companies that want to make an impression, so chocolate is a major player in that game.
Depending upon location, franchises cost between $300,000-$350,000. This includes the $50,000 initial franchise fee, rent, insurance, opening inventory and supplies, signage, initial training, grand-opening advertising and build-out. Franchise owners will have access to all exclusive trademarks, equipment, products and recipes, and procedures. They will also be presented with a copy of the company’s confidential operations manual to help run the shop smoothly on a day-to-day basis. The Chocolate Works team will also provide new franchises with one week of pre-opening, corporate-based training, including both classroom and in-store, on-the-job. Additionally, an onsite Chocolate Works representative will provide up to five days of support around store opening time.
Franchisees will be required to pay royalties at a rate of five percent of gross revenues on all sales, except for those made to institutional customers, such as a school or non-profit. For institutional customers, the franchisor and franchisee each receives 50 percent of net profits.
“It’s a fun business and lucrative. Emotionally, this is a business you can enjoy owning and promoting,” Levenberg says. “Logically, the margins, the lifestyle, the ROI all make sense. It’s rare to have all. We liked the three revenue streams: retail, corporate gifts, and birthday parties.”
“For those with a passion for all things delicious, and who like the idea of having a hands-on opportunity to bring Chocolate Works sweetness to their local area, this is a perfect opportunity,” Levenberg says. “You don’t need to have specific experience in the candy and confections business to become a franchise owner with Chocolate Works. We look for people who have a passion for our products, and who have some retail experience and/or customer service skills.”