Risk Score
Pending analysis
Investment Range
$295,415 - $880,344
Franchise Fee
$15,000
Total US Locations
172
Business Summary
Kilwins Chocolates Franchise, Inc. operates businesses that specialize in selling Kilwins brand hand-crafted chocolates, original recipe ice cream, fudge, and other confections. These businesses can be either full-line stores or smaller ice cream and chocolate shops, which sell a modified product assortment. Stores operate in an indoor structure, typically ranging from 1,000 to 1,500 square feet, while shops are smaller, ranging from 500 to 900 square feet. The business model focuses on retail sales made in-person to customers, with offerings also including delivery services.
Corporate History
Kilwins Chocolates Franchise, Inc. was incorporated on March 5, 1981, and began franchising its Kilwins Stores that same year. The company focuses solely on its Kilwins brand, offering full-line chocolate, confectionery, and ice cream stores or smaller ice cream and chocolate shops. Kilwins Quality Confections, LLC, an affiliate, acts as the primary supplier for manufactured candy and ice cream products for all Kilwins locations. In February 2023, Kilwins Chocolates Franchise, Inc. and its affiliate were acquired by an entity controlled by Levine Leichtman Capital Partners, LLC.
Financial Overview
Investment Range
$295,415 - $880,344
Franchise Fee (Low)
$15,000
Franchise Fee (High)
$40,000
Royalty %
5%
Marketing %
3%
Equipment Costs (Low)
$207,353
Equipment Costs (High)
$629,565
Working Capital
$41,500
Audited Financials
Yes
Offers Financing
No
Audit Opinion
Unqualified opinion
Financial Health Notes
Kilwins Chocolates Franchise, Inc.'s audited financial statements show that as of December 31, 2024, the company had negative working capital of approximately $140,933. In contrast, at the end of 2023, the company had positive working capital of about $92,498, and at the end of 2022, it had strong positive working capital of approximately $4.4 million. The company's total assets as of December 31, 2024, were approximately $55.9 million, with total liabilities of about $7.2 million, resulting in strong stockholders' equity of approximately $48.6 million. Kilwins Chocolates Franchise, Inc. and its affiliate also act as guarantors for borrowings of their parent company, totaling $65 million, with the company's assets pledged as collateral. Management believes the risk of material loss from these guarantees is remote. The auditors have issued an unqualified opinion on the financial statements, indicating fair presentation without significant concerns.
Financing Details
Kilwins Chocolates Franchise, Inc. does not offer any direct or indirect financing to its franchisees. The franchisor also does not guarantee any notes, leases, or other obligations for its franchisees.
Performance Metrics
Total US Locations
172
Franchised Units
168
Corporate Units
4
Avg Square Footage
1,000
Franchising Since
1981
Legal & Compliance Analysis
Recent Litigation
No
Bankruptcy
No
Litigation Count
1
Litigation Summary
Kilwins Chocolates Franchise, Inc. has disclosed one past litigation case. This lawsuit, filed in August 2011, was against former franchisees and a related party for operating a competing business. Kilwins Chocolates Franchise, Inc. alleged that the former franchisees violated non-competition agreements, conspired against the franchisor, and engaged in fraud. The defendants filed counterclaims, including an antitrust violation. Kilwins Chocolates Franchise, Inc. was granted a partial summary judgment, leading to the dismissal of the antitrust claim and enforcement of the non-compete covenants. The defendants' appeal was denied. The matter was settled in April 2013, with the defendants paying Kilwins Chocolates Franchise, Inc. $180,000, agreeing to adhere to non-compete terms for a limited period, and relinquishing intellectual property and leases for their former shops. This case concluded in August 2013. No other litigation is required to be disclosed.
Bankruptcy History
Kilwins Chocolates Franchise, Inc. has no bankruptcy history to report in this document.
Agreement Terms
Initial Term
10 years
Renewal Term
10 years
Renewal Conditions
Kilwins Chocolates Franchise, Inc. franchisees who operate a Store have the option to renew their agreement for one additional 10-year term. To do so, they must provide written notice to Kilwins Chocolates Franchise, Inc. between 6 to 12 months before the initial term ends and pay a renewal fee of $10,000 (or 25% of the then-current initial franchise fee, whichever is greater). Franchisees must be in material compliance with all agreements, have met all financial and other obligations, and undertake any required renovation and modernization of the store, including upgrading computer systems, to meet current brand standards. They must also meet current qualification and training requirements, sign a general release, and sign Kilwins Chocolates Franchise, Inc.'s then-current form of Franchise Agreement, which may have different terms. Importantly, there is no renewal right for a Shop franchise.
Training & Support Program
Franchisor Assistance
Kilwins Chocolates Franchise, Inc. provides comprehensive assistance to its franchisees. Before a store opens, the franchisor offers designated training programs for the franchisee and their highly trained personnel, a Manual that includes construction requirements, AutoCAD layouts, equipment schedules, and specifications. Kilwins Chocolates Franchise, Inc. inspects and approves the store for opening and assists with the Opening Marketing Program. Franchisees also receive lists of required equipment, utensils, and suppliers, as well as a suggested opening inventory. For existing multi-unit franchisees, a representative may be present at the initial store opening. During operation, Kilwins Chocolates Franchise, Inc. conducts periodic inspections, provides ongoing training, and administers the Marketing Fund. Optional additional personal assistance and counsel from qualified representatives are available for a fee. The franchisor also offers site selection guidelines, counseling, and an approval process for proposed locations. While Kilwins Chocolates Franchise, Inc. provides pricing guidance, franchisees have discretion over pricing but the franchisor reserves the right to set maximum and minimum prices.
Initial Training Hours
200
Training Location
The initial training program is typically conducted over two weeks at Kilwins Chocolates Franchise, Inc.'s headquarters in Petoskey, Michigan, for Session 1, followed by a minimum of six days of on-the-job training at the franchisee's own store location for Session 2.
Ongoing Support
Kilwins Chocolates Franchise, Inc. provides ongoing support through periodic inspections of stores to evaluate products, services, and sanitation. The franchisor also offers ongoing training programs as deemed appropriate, at various times and locations. Upon request and subject to staff availability, franchisees can receive personal assistance and counsel from a qualified representative for an additional daily fee plus expenses. Kilwins Chocolates Franchise, Inc. also administers a Marketing Fund to which franchisees contribute, helping to promote the brand. Additionally, franchisees may be required to enroll their employees in web-based training programs for a monthly fee per store and attend periodic refresher courses, seminars, and conventions, typically not more than once every two years.
Franchise Requirements
Ideal Candidate Profile
Kilwins Chocolates Franchise, Inc. looks for franchisees with strong financial resources, a suitable educational and work background, a personality that fits well with their team, and the ability to work collaboratively.
Industry Experience Required
No
Management Experience Required
No
Sales Experience Required
No
Technical Skills Required
No
Operational Details
Location Type
retail
Owner Participation
Supervisory
Territory Type
Protected
Territory Size Requirements
Kilwins Chocolates Franchise, Inc. defines its Protected Territory typically as a circle centered on the front door of the store, with a specific radius to be determined and stated in the Franchise Agreement. However, the actual territory definition can vary based on the desired location's characteristics, and there is no specified minimum size. For New York State, the protected area is typically defined as a one city block radius in high pedestrian/tourist areas, the confines of a shopping center if the store is located within one, or a one-mile radius in suburban or local downtown areas.
Staffing Notes
Kilwins Chocolates Franchise, Inc. requires that at least one member of the "Highly Trained Personnel" (which includes the franchisee or an approved operating partner, and a full-time general manager) who has completed the franchisor's training program must always be actively managing the franchised business. During the store's opening, at least one Highly Trained Personnel must be present with the franchisor's opening team. Franchisees must maintain a sufficient number of competent and trained staff to serve customers promptly, ensuring at least one Highly Trained Personnel is on duty at all times. All employees must adhere to specific dress codes, cleanliness, and sanitation standards prescribed by Kilwins Chocolates Franchise, Inc. For franchisees operating five or more stores, an additional full-time supervisor, approved by the franchisor, is required to oversee store operations. Stores must also operate during specified hours and days, and employees must comply with personal appearance standards set by the franchisor.