Pelican’s Snoball is a dessert shop concept that sells flavored ice in the form of balls called “snowballs”, as their primary product of sale. The idea originated in 2001 by 13 year old Ansley Johnson, who was inspired by the snow cones from visiting her grandparents in Chalmette, Louisiana.
Ansley differentiated her product from typical snow cones by innovating a new form of flavored ice — soft, fluffy, shaved ice rather than crunchy and sloppy. A few years later, the success of the restaurant led people to become interested in operating their own Pelican Snoballs business, which led the Johnson family to decide to franchise their dessert shop.
By 2017, there were almost 80 Pelican’s Snoball franchises across the United States. As of today, there are almost 200 franchises in 14 states.
The initial franchise fee for a Pelican’s Snoball franchise is $20,000.
The estimated total investment cost for a Pelican’s Snoball franchise ranges from $61,150 to $195,300.
|Lease / Rent||$1,500 – $18,000|
|Plans and Construction||$8,000 – $80,000|
|Equipment||$15,000 – $30,000|
|POS||$1,000 – $1,500|
|Inventory||$10,000 – $20,000|
|Signs||$1,000 – $7,000|
|Advertising||$100 – $2,000|
|Insurance||$3,000 – $6,400|
|Training Expenses||$1,000 – $4,000|
|Business Licenses||$50- $200|
|Additional Funds||$0 – $3,000|
The royalty fee for a Pelican’s Snoball franchise is 8%.
Pelican’s Snoball does NOT offer any form of in-house financing, whether it be direct or indirect. This means that franchisees that need financial assistance with starting their business will need to go through external financing, such as a bank or other lending institution.
(January 1, 2019 – December 31, 2019)
In the Item 19 of Pelican’s Snoballs FDD, the gross sales of the average franchisee are represented. At first glance, the figures seem reasonable, as the majority of stores bring in over six figures annually. However, it is important to remember that these are just gross figures, meaning that this is the initial revenue that the average stores make before costs and expenses are taken into account.
Since Pelican’s Snoball does not give representations of the net profit sales figures of the average Pelican’s Snoball franchisee, it cannot be determined exactly how much the average owner will take back home. But assuming that COGS and other ongoing expenses take about half of the store’s initial revenue, it can be expected that the average franchise owner will make around $50,000.
Furthermore, it can also be assumed that in the first year, the franchise owner will be unlikely to break a profit, since the low end of the initial investment matches the low end of the average annual gross sales, and the same goes for the high end of the initial investment and high end of the average gross sales.
This is actually typical for many franchise owners, and in America most people in America often need their business to last a few years before they can start turning over a true profit.
|Mean Average||Median Average||# of stores that met or exceeded the Mean or Average||Highest Grossing Stores in Range||Lowest Grossing Store in Range|
|Top 25% (39 stores)||$200,788||$192,007||15||$307,918||$160,548|
|Middle 50% (76 stores)||$125,300||$125,490||39||$157,438||$92,862|
|Bottom 25% (39 stores)||$69,567||$72,812||21||$91,293||$33,406|
|Median Gross Sales||$995,281||$436,391||$901,747||$373,496||$879,890|
|Maximum Gross Sales||$3,453,579||$620,658||$2,560,583||$1,162,498||$1,347,439|
|Mean Average per month||Median Average||# of stores that met or exceeded the Mean or Average||Highest Grossing Stores in Range||Lowest Grossing Store in Range|
|Top 25% (4 stores)||$17,977||$21,070||2||$23,079||$13,560|
|Middle 50% (9 stores)||$6,914||$6,228||4||$11,054||$3,887|
|Bottom 25% (4 stores)||$2,836||$3,101||3||$3,211||$2,090|
|Amount||Percent of Revenues||Amount||Percent of Revenues|
|Franchise Royalties||$ 1,641,249||78.97%||$ 1,491,644||61.25%|
|COST OF GOODS SOLD||$ 132,490||6.37%||$ 405,298||16.63%|
|Gross Profit||$ 1,945,876||93.63%||$ 2,029,911||83.37%|
|GENERAL AND ADMINISTRATIVE EXPENSES||$ 1,388,121||66.79%||$ 1,673,354||68.72%|
|Income from Operations||$ 557,755||26.84%||$ 356,557||14.65%|
|OTHER INCOME (EXPENSE)|
|Gain on debt restructuring||$ —||—-%||$ 166,884||6.85%|
|Interest expense||$ (152,979)||(7.36)||$ (90,751)||(3.73)|
|$ (152,979)||(7.36)%||$ 76,133||3.12%|
|NET INCOME||$ 404,766||19.48%||$ 432,690||17,77%|
Pelican’s Snoballs does not have any company-owned stores, so the majority of their revenue will come from franchise royalties, fees and merchandise sales. In fact, according to their latest income statement, the vast majority of their revenue comes from franchise royalties, almost 80%. Pelican’s Snoball, at 8%, has a slightly higher royalty fee than the franchise average of 6%. However, their royalty fee, like most royalties, are taken as a percentage of gross sales. Therefore, another implication is that the relative success of Pelican’s Snoball franchisees has correspondingly generated revenue for the broader corporation through franchise royalties.
The total revenues of Pelican’s Snoballs comes out to a little over $2 million. Compared to other giants in the Food and Beverage industry, this number might seem small, but it is important to keep in mind the scale of Pelican’s Snoballs. After all, it is a relatively new company that was started in the early 2000s , and their products are very niche, making rapid development and expansion somewhat difficult.
A good point of comparison would be the Crumbl franchise, another smaller but very strong contender in the dessert industry. In 2019, Crumbl Cookies made over $4 million in initial revenue, basically double of what Pelican’s Snoballs made. Interestingly enough, however, the net income for Crumbl franchise is $259,925, almost half of Pelican’s Snoballs $404,776 net income that same year. Therefore, even though Crumbl Cookies may generate more in terms of gross revenue, Pelican’s Snoballs remains a more profitable franchise.
As a whole, Pelican’s Snoballs is a relatively profitable business in the dessert industry. Furthermore, their estimated total investment cost is relatively low compared to other businesses in the broader Food and Beverage industry. Vetted Biz calculated the investment averages for every one of our franchise industries, and Food & Beverage remained one of the highest, ranging from $439,675 to $1,444,928. However, Pelican’s Snoballs total estimated initial investment is significantly lower than this number, as their estimated total investment cost ranges from $61,150 to $195,300.
Furthermore, despite being on the smaller end of franchises, Pelican’s Snoballs appears to be a relatively profitable franchise, for both the franchisee and franchisor end. In fact, compared to another contender in the dessert industry, the corporation of Pelican’s Snoballs fares significantly better in terms of net profit.
Think Pelican’s Snoballs is the franchise for you, are you interested in exploring other franchises in the dessert industry or Food and Beverage industry? Make sure to check out the thousands of franchises on the listings page of our website to find the right franchise for you!
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