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Dipping Dots

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Back to the (Ice Cream of the) Future
Dippin’ Dots still looking to break new franchise ground

 Curt Jones wanted to make ice cream, but he hardly anticipated a global empire.

 

A microbiologist by trade, Jones was working on cryogenic freezing techniques with active cultures in a laboratory when he decided on a whim to see what those same processes would do to a self-concocted ice cream mixture at home. Upon doing so, he discovered it would freeze the ice cream faster and result in smaller crystals and a smoother, creamier end product.

 

He took that introductory knowledge and opened up a small retail store in Lexington, Ky. in 1988, but any grand visions for success were soon tempered by the initial customer’s purchase of choice.

 

Lucky for him, though, the early encounter wasn’t too indicative of the future.

 

“The very first person that walked in actually ordered a soda,”said Steve Rothenstein with a laugh. “So I think from that very first sale, I’m not sure he could have envisioned what was coming.”

 

Fast-forward 26 years and Jones is chief executive officer of an international operation through which his invention – Dippin’ Dots – is available at retail settings in all 50 U.S. states and in 10 other countries, alongside distribution at fairs, festivals, sports stadiums and nearly every place in between.

 

“I don’t think he ever could have imagined it was going to grow that big, but I think he knew he had something special,” said Rothenstein, who’s now director of the company’s burgeoning franchising operation. “I think he knew he had a really good product. And he took the work ethic from the farm, if you will, and he put it into the business and he managed to grow it.”

 

Grow it to the point where the Guinness people have come calling, in fact.

 

The company established an inaugural world record when a team of five served scoops of ice cream into 473 cups over a three-minute stretch as part of the annual July 4 festivities in Nashville. And, earlier in the day, servers visited an indoor barbecue event for families at the Monroe Carell Jr. Children’s Hospital at Vanderbilt and dished out more than 400 scoops to patients.

 

“We don’t make a big deal about a lot of the charity work we’ve done, because it’s more about just doing the right thing,” Rothenstein said. “But it is part of our story and it’s very rewarding.”

 

The company as a whole has awarded 115 franchise licenses which now account for 130 open stores in one format or another, including seasonal locations, mall kiosks and brick-and-mortar outlets.

 

Franchises are provided by territory and don’t require a permanent location, so many of the 115 licensees work in their areas via fairs, festivals, special events or other distribution-type activities – such as placing freezers in other businesses where people can purchase products.

 

“We are in almost every state fair in the country and more than 2,500 other fairs and festivals throughout the year,” Rothenstein said. “We’ve become such the norm at malls and those sorts of events that it’s almost more noticeable when we’re not somewhere than when we are.”

 

Financial requirements for prospective franchisees include a minimum net worth of $250,000 and $80,000 in available liquid cash. The franchise fee is $15,000 for a renewable five-year agreement, all franchisees are owner/operators and 90 percent of all franchisees own/operate more than one unit.

 

Most franchises have no more than three to five employees.

 

An additional franchising option for prospective candidates arrived in early July, when Dippin’ Dots finalized its acquisition of Doc Popcorn, an 11-year-old gourmet popcorn operation that was founded in the kitchen of a New York City apartment before its owners relocated to Boulder, Colo.

Doc Popcorn had nearly 100 franchisees in 30 states, as well as Japan, Mexico and Puerto Rico, and had been even more mall-focused than Dippin’ Dots, positioning itself as an impulse purchase thanks to the omnipresent buttery flavored aromas. In recent years, it had followed a path similar to Dippin’ Dots into fairs and festivals, as well as arenas and convention centers.

“We’re excited about the opportunity to mix the sweet and the savory. One of the things that we’re going to be able to help with is getting Doc Popcorn into the places we’ve been for 10 and 20 years now,” Rothenstein said. “Similar to where we were 10 years ago, that’s pretty much where they are. Plus we’ve always had, on the Dippin’ Dots side, the fairs and festivals.So we’re really going to bring that to them and bring that to their proprietors.”

Dual mall-located units featuring both businesses will be a reality in the relatively near future, Rothenstein said, thanks to the relatively small physical footprint needed to produce both products.

The first joint location, though, will more than likely be at the Dippin’ Dots corporate store outlet in Paducah, Ky. Several existing owners on both the Dippin’ Dots and Doc Popcorn sides have expressed interest in owning franchises of the other business as well, so Rothenstein is working on updates to the franchise agreements and other paperwork to satisfy myriad state regulatory requirements.

“Once that’s done, we will have an offering in there that will talk about the opportunity for one brand to bring in the other,” he said. “We’re going through a couple of different ideas and we want to make sure we provide value, not only for our franchisees but also for our ownership group. There will be some exciting opportunities, but the exact nature of those are to be determined.”

A “sustainable, but smart” growth rate – meaning an addition of 10 to 15 new franchise partners annually – is at the top of the corporate priority list going forward, while the projections for growth on the Doc Popcorn side are slightly loftier because of its comparative newness as an operation.

Also on the agenda is a continued search, by the Fischer Enterprises ownership group, for acquisition opportunities with both related, as was the case with Doc Popcorn’s, and unrelated product offerings.

“I understand the power of bringing the right folks on for the right opportunities, so I grow in that manner,” Rothenstein said. “For sure, this was not their last acquisition.”

 AT A GLANCE

WHO: Dippin’ Dots
WHAT:
International flash-frozen ice cream business with franchised locations in retail store settings, fairs, festivals and theme parks in the U.S. and 10 other countries

WHERE: Paducah, Ky.

WEBSITE: www.DippinDots.com

Short URL: http://www.businessworld-magazine.com/?p=3619

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