Summer 2011
Cool Business Opportunity

Tropical Sno is banking on the fact that simple shaved ice treats make for sizzling hot sales everywhere.

Tropical Sno’s shaved ice is a hot-weather treat that sells like crazy including in colder regions during the summer time.

The company, which is owned by Draper, UT-based Pioneer Family Brands, has 750 authorized dealers in more than 30 countries around the world. Tropical Sno was founded in 1984, and since that time its president, Donald Griffiths, estimates that the company has sold more than 250,000,000 shaved ices.

Dealership program

Griffiths says that Tropical Sno is not a franchise and the company doesn’t charge any franchise fees. “Our program is what we call a dealership program. We license the dealer to use our name and logo, and they agree to use only the Tropical Sno flavors and to purchase their supplies from us.”

Dealers must follow Tropical Sno’s guidelines for making and serving a quality product, including using a specific ice shaving machine available only from Tropical Sno. Dealers can purchase everything from signage to menus and uniform apparel from the company.

Dealers are free to choose from a variety of flavors to serve—ranging from fruit flavors like strawberry and banana to specialty flavors like cheesecake, cotton candy and margarita. Griffiths says that Tropical Sno stands apart from its competition due to the quality of its flavors. All of Tropical Sno’s flavors are dry powder concentrate instead of liquid, which gives the product a long shelf life and retains flavor integrity. To make the powder into the liquid used to pour over the shaved ice, the powder is mixed with a five-pound bag of sugar in a gallon jug; the jug is then filled with water and shaken.

Becoming a dealer

Potential dealers first complete an online form, available on the company website, to request more information. The company follows up and goes over basic details and goals for the business.

“We provide some guidance on finding a location, but the ultimate responsibility is up to [the dealers],” Griffiths says. Once they secure the location, the new dealer signs an agreement 
and places an order for supplies to get started.”

While there are no franchise fees, Griffiths reports that the average start-up cost to outfit a location is less than $30,000 and the return on investment is typically less than two years. “If you’re looking to do everything top notch, it’s about $25,000 to $30,000 to buy all of the supplies to get started. An entry-level package is about $7,500 for a small pushcart operation. These are portable so the dealer can take it to corporate events, parties and festivals.”

Growth plans

With dealers around the globe, Tropical Sno’s locations are very diverse. “In colder climates our product becomes a summertime tradition. Tropical Sno dealers in these locations will pack sales into a few months rather than spread them throughout the year, and these dealers may sell just as much as someone in a warmer climate,” Griffiths adds.

President Obama has been photographed enjoying shaved ice as a treat when on vacation in Hawaii, and Griffiths says this helped the company land a new distributor who set up 30 locations in India.

“This particular entrepreneur was looking for a new business and started searching the Internet. He came across a photo of Obama eating shaved ice and decided to look into it as a business opportunity—then he found us.”

Tropical Sno is also working on expanding its presence in malls—the company exhibited at SPREE this year. “We’re putting an emphasis on mall expansion, and from our presence at SPREE we have several who have committed or are close to committing to adding Tropical Sno locations. Outdoor type outlet centers will be a focus for us, since heat and sunshine help to drive sales of shaved ice.”

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