How Rocket Fizz’s Simple, Nostalgia-Focused Business Model Sets Franchisees Up for Success

Rocket Fizz is a rapidly expanding candy and soda franchisor in the U.S. and Canada, with over 100 locations currently in operation and many more in development. Each store offers a unique shopping experience, featuring 600 flavors of micro-brewed sodas in glass bottles and over 1,000 different types of packaged candies. And for franchisees, the business model is simple. 

"It's a simple business that people love,” said CEO Rich Shane. “The economics support not only the business itself, but growth beyond, and you're doing something that makes you and your customers happy.”

Shane and Vice President of Franchise Development Bob Campbell recently spoke with 1851 Founder, Publisher and CEO Nick Powills during his regular podcast, “Meet the Zor.” The pair shared the journey of Rocket Fizz from its humble beginnings to becoming a thriving franchise with over 100 stores. With a focus on providing an entertainment shopping experience and fostering franchisee independence, Rocket Fizz stands out in the retail landscape.

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A summarized transcript of the interview has been included below. It has been edited for clarity, brevity and style.

Nick Powills: What is your franchise story? How did you accidentally fall into franchising? 

Rich Shane: I'm the CEO of Rocket Fizz. We are a candy and soda franchise. We currently have about 100 stores around the U.S. and Canada. And we've been in business for about 14 years.

I got started because my two business partners started the business and I was helping them get it going. And then, the more we worked together, the more we thought, “Ah, a partnership among us makes sense.” And Bob has been an advisor to us and a counselor for years and, of course, a good friend and has joined us to help us grow this to the next level.

I've always been in retail or B2C businesses, starting with Web 1.0 and kind of continuing on as we've moved into Web 2.0 and so on. We've been growing this business outside of the internet realm in the sense that it's a brick-and-mortar-focused business where we create an entertainment shopping experience for our customers. 

Bob Campbell: We still have a founder, Ryan Morgan, one of the co-founders is with us. He's our president and COO. And, you know, the business was really started between him and a guy named Rob Powells, who was a — they've known each other since childhood, I think, right? And grew up and were on a long road trip one day and decided, “Hey, wouldn't it be cool to open a soda company?” I think they were drinking soda as well at some point along the trip, and they thought, “You know, who does this well?” And so forth. They came up with a concept while driving from Reno down to L.A., and that's how the ultimate beginning of the business presented itself.

Powills: Bob, what's your personal franchise story? 

Campbell: My first job was with a franchise company, literally in high school at 16 years old. Worked for a location. Got through high school and said, “Okay guys, thanks. You've been a great company. I'm going to go to college now and probably get a real job.” They said, “Hey, you know what? Why don't you move departments and go into sales?” And so I did work for them through college. And then, at the end of college, I said, “Hey, guess what? I'm done. I got a business degree. I'm going to go out and get a real job and work in corporate America.” And they said, “Hey, we've got 37 locations. We have a corporate America job for you if you're interested.” So I did that for a couple of years. And then I just realized at some point that it wasn't the business for me.

I lived in California and my sister had twins, and [that’s when] I first got exposed to young kids. I thought, “You know, I think I'd rather work with kids. I'm going to become a teacher.” And then you figure out in California that being a teacher and raising a family are not two things that generally go hand in hand. So I thought, “Okay, well, what can I do? What businesses are around that have to do with children and yet can leverage some of my background?” So I ended up applying for and getting a job working as a franchise service consultant at Gymboree corporate headquarters, which was also located in the Bay Area.

Seventeen years later — the last seven of which I ran their franchise business — [Gymboree] had 530 locations in 20 countries by that time. Learned a lot along the way. Did legal affairs — you name it — trademark copyright protection, music publishing — it was all hands on deck company pre-public, then went public. We were venture capital-backed, so I got exposed to that world as well. I was asked to serve on the board of another company that I'm still on the board of — another franchise company — and somehow in the interim did some work for a company through one of the venture capitalists that wanted to start franchising. [It was] there I met one of Rich's best friends and worked with him, and he's the one that made the introduction to Rich and I. We started working together, started meeting and going over and giving them some suggestions about ways that they might want to grow and operate their business. 

At the time, we decided, “Well, that'd be great to work together.” And so I moved down here to South Carolina and called Rich. I started working with them about a little over a year ago and have implemented some changes and some improvements, I think — hopefully Rich agrees — to the systems here, particularly on the development side, a little bit more in marketing, a little bit more on demographic analysis and identifying the best practices in the system and so forth.

We've actually had a great year in terms of growth. We have an interesting model in that over 60% of our franchise owners have more than one location, yet all of our franchise owners started with one location, so our bigger challenge has been letting the rest of the world know about this great opportunity that's out there. I'm the one doing franchise development — I speak with our prospective franchisees every day, and a lot of them have relayed the story to me that they just love Rocket Fizz. They had some great experiences at our stores and yet they just thought Rocket Fizz was their local candy soda store — they had no idea that it was franchised. And once they found out, they reached out to us. 

So it's a blessing and a curse from a franchise development standpoint. You want consumers to think you are their local soda candy store, located on the square or in the mall. And given that we're franchise based, we are local stores but, at the same time, we want to grow domestically and internationally. 

Shane: You know, Bob, you touched on something important that we give our franchisees quite a bit of independence. We encourage them to innovate and make their stores their own and make them a local experience. So while there is a theme and a trade dress and something that's common among all of our stores, there's absolutely something unique and personal to every location — and that's by design. We have a foundation that we train people on to kind of help them get up to speed and understand how to be a good merchant, how to buy the right products and present them in the best possible light and then encourage them to kind of make the stores something that's appropriate for their neighborhood and to immerse themselves in the neighborhood. 

And, you know, let's face it, when your opportunities in franchising are carpet cleaning or tax preparation — or you can do something really fun and entertaining like a candy store where people are delighted to be in your presence — it really is a no-brainer. And the economics support that as well. So it's not just a fun business and a business that you can make your own — and we, of course, teach you how to do that — but it's a business that has an economic model that really works for the franchisees. And the proof is in the pudding in what Bob just mentioned in that every single one of our franchisees started with one store. And some of them have grown to four or five — even more than 10 stores. And this is literally in a stepwise fashion by using the cash flow of the business that they already are operating to grow their business, which is the right way to do it, of course. Not taking on debt necessarily, not taking on equity partners, but growing it from the cash flow of the business.

Powills: Rich, go into the future, because this will help frame some of my follow-up questions. What is the vision? What do you want to accomplish with this business? 

Shane: So the idea of providing an entertainment experience for people is not new — it's done in amusement parks, it's done in other retail establishments, it's done with a neighborhood park, even. You want people to enjoy where they're spending their time because that'll cause them to come in repeatedly or experience what you have to offer. And I think growing that — not only in our footprint around the United States and perhaps even more internationally, but also providing the latest trends in terms of social media and products that kids or perhaps even adults want to experience — and staying on the cutting edge of the products that drive people into the stores — not just the things that you can find at any convenience store or gas station, but the things that are sort of unique and interesting and drive [customers] into your store. So we're pretty active in terms of innovation in our space, both in candy and soda. We have our own bottling plant and we come out with our own sodas that you can only get at Rocket Fizz. We have about 150 that we make ourselves, and every store has about 500, so there's innovation on the soda side. On the candy side, we make our own taffy and have more than 100 flavors, and we're constantly innovating there as well.

In terms of the future, we'd like to see greater penetration around the U.S. There's a huge number of really thriving communities that don't have Rocket Fizz, and don't even necessarily have a candy store in them as well. So there's a huge opportunity in that regard. Bob, would you add anything to that? 

Campbell: Just that we haven't really spoken about what makes our stores unique. Really, for those who've been to one of our stores, it's an easy thing to describe. For those of you that haven't, when you talk about a candy store, do we have a Snickers bar in our store? Yeah, we might. But we might have five other types of Snickers bars that you've never seen before. We will also have international options. 

The theme of the store is one of nostalgia. You'll have your candy cigarettes, your gag gifts of finger locks, all sorts of things that just make the experience one of heavily relying on nostalgia, yet still able to be current. For instance, we have a thriving anime food and candy portion of the store, which is very current. The teens love that stuff. We're able to curate an amazing number of SKUs. I think we open an average store with about 4,500 SKUs of products — that includes the sodas and games, gags, gifts, etc., as well as candy. We have access to over approximately 30,000 SKUs. If you're a store owner and you want to be creative and that's your background, if you want to emphasize something, there's always more to emphasize. The store you open will constantly change throughout your ownership because of that curated inventory that helps make us unique. It's both domestic and international products as well. We have a lot of Japanese and German and — you name it — all over the world products.

Powills: Bob, break down the business opportunity. What's the cost to get in? How much can I make? 

Campbell: Well, as you know, the [Federal Trade Commission] precludes us from saying too much about how much you can make. I can tell you that we have very happy store operators. The investment is roughly, at minimum, probably $120,000 — at maximum about $225,000 — to get open and in operation. I would say on average, over the last year and a half that I've been here, people are spending anywhere between $150,000 and $175,000. So from the standpoint of a typical franchise, definitely on the lower range per se.

In addition, we have great relationships with landlords. We're inside malls, we're in Tanger Outlet Malls. We have a lot of national relationships that have enabled us to open quickly.

We can open a store very fast. Once we have a lease sign and a vanilla shell, we can pretty much be open within a month, which is pretty rare. We don't have any kitchens to build, which really drives down the investment cost. We really don't have to deal much with the health department. You're basically buying and selling products that come packaged. 

Powills: Do you have an Item 19?

Campbell: Yes, of course.

Powills: What are you disclosing on that? 

Campbell: Basically, we break down the revenues by quartile — the lower range and upper range of each quartile so you know what the lowest performance store is, what the highest performance store is.

Powills: What’s the average store performance?

Campbell: Roughly $520,000 or so in that range.

Powills: If I'm hearing correctly, Rich, when you're thinking through your vision, you're saying, "We've got work to do. We've got room to still grow. We've engineered a good business." So you're not just looking to build and exit. You're still trying to figure this thing out and get it grown. Is that accurate, Rich?

Shane: One hundred percent. One of the two founders is still with us. Ryan and I bought out our third partner a few years ago. We're still active day to day in the business and love it and want it to grow. We're incredibly enthusiastic about it. There's a lot of greenfield opportunity. We feel like we've very clearly decoded what it takes to build a successful business. It's a matter of finding the folks that have an interest in this kind of existence, which is a happy existence with respect to being at work. You're doing something that makes people happy. There's opportunity for that in so many neighborhoods around the U.S. 

Campbell: I was going to say we started recently doing some video interviews of our franchise owners. It was fascinating to me to hear how many of them do talk about fun. They just say, “You know what? People come in and they're happy as soon as they hit the door because they look at this environment that's almost overwhelming in its selection of products and they leave even happier.” How many retail experiences do you have in your life where that's the case nowadays? Not so many. So very unique in that regard. I think from a quality of life standpoint, that's a big deal.

Shane: We've been fortunate to attract people who are also interested in having a second career. Maybe they’ve come out of the military; they've got a pension and they're not ready to retire. Or they're a teacher and they enjoy being with kids and they want to talk to kids in a different environment. Folks who have changed their career and, as Bob was alluding to, are just looking for something more fun to do. We've attracted all types. I mean, if you think about the kind of people that enjoy sweets, it crosses every demographic group, every age group, both genders. It's everything that has nostalgia associated with it. People kind of understand what we're doing and enjoy it because it's part of their childhood. So we really kind of appeal to every spectrum in the population. 

Powills: I want to give you guys some feedback because, obviously, I get that opportunity too when I'm doing these podcasts. When I land on your website, I don't see the "why you, why now." Part of what you have to do is you've got to show me my million-dollar investment.

You're having that experience, like, "Oh, I love Rocket Fizz. I just didn't know it was a franchise." You've got to marry these things together and, if you do it, you've already engineered a great franchise brand.

Man, if you put people front and center and show me the opportunity to make this thing feel like a million bucks, now your experience from a buyer standpoint will align back to what you're trying to sell.

Shane: I think it's fair feedback. It's in line with what we've been talking about internally in terms of putting our best foot forward. We don't necessarily always do that, not because we don't want to, but because we didn't have the creative idea or we're in process on something that we haven't yet shown to the public. I think that's valuable feedback, and I think it's spot on. It really is my reaction.

Powills: Kudos to you guys. I think you're on the right path. Let's close with this: Rich or Bob, if someone's watched this video up to this point, any closing words you want them to know before we depart?

Campbell: I can't believe from my background and experience in working with various franchise organizations truly how straightforward the operations of this business are. You spend a good amount of time maintaining inventory awareness and ordering, hiring people, training them. It's very straightforward. It's a simple business, and we even build the store to some degree for you.

I think we're one of the few franchise companies that provides all of the FF&E — we actually build your fixtures for you and we provide you with the coolers for the sodas and so forth. There are very few that just basically include that as part of the deal, and we do. It allows us to have a good degree of control of the brand, which is the ultimate part of the rationale for it, but it also allows us to do it faster and at a lesser cost. 

Shane: I just want to reiterate in closing what Bob said — that the economics of this are really compelling and the breakeven for some people has been months — substantially less than a year in some cases and not much more than a year in many other cases. It's a simple business that people love. The economics support not only the business itself, but growth beyond, and you're doing something that makes you and your customers happy, so give it a look.

Watch the full interview here.