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Rocky Mountain Chocolate Factory announces company transformation plan

Candy company intends to regain local presence with rebranding
Rocky Mountain Chocolate Factory has experienced 30% decrease in store count over the last 10 years. CEO Rob Sarlls is optimistic the company’s new strategic plan will help turn the company around. (Jerry McBride/Durango Herald file)

Rocky Mountain Chocolate Factory announced a transformation plan on Wednesday during the company’s quarterly reports meeting.

The transformation plan was developed by the Durango-based company headed by CEO Rob Sarlls to turn the company around after experiencing struggles in recent years.

Over the last 10 years, RMCF has experienced 30% decrease in store count and factory pound volume production decreased by slightly more. It was an obvious sign that sales were decreasing.

The plan aims to solve some of these issues by implementing a more streamline logistics process, rebranding the company’s franchisee stores, focusing on selling high-volume products and eliminating underperforming stores over the next three to five years.

“We want to make sure that we're making the best products for our franchisees and consumers, and making sure that we're utilizing the folks in the factory in the most effective way,” Sarlls said.

Part of streamlining the logistics process involves replacing old technology at the Durango factory with equipment that uses technological assistance to speed up the process of production. With the addition of the newly implemented technology, Sarlls said the factory won’t be adding more employees but also will keep all of its existing employees.

In addition, the company will close 25 to 35 of its underperforming stores, but the company did not specify which locations would be closing. It will also begin offering an omnichannel experience that allows customers to purchase the company’s candy through big-name retailers like Amazon and Costco.

As part of the transformation plan, the company will work with multiunit operators with the intention of opening 75 to 100 new stores over the next five years. That means an owner can purchase more than one store at a time.

“Right now, 25% of our franchisee owners operate more than one store,” Sarlls said. “We want to increase that number dramatically.”

Multiunit operators allow businesses to streamline marketing expenses as well as build a larger management team.

Sometimes multiunit operators can be owners of another business who may want to diversify their investment portfolio

“We're providing tools for investors who are investing in retail concepts to be as successful as possible,” Sarlls said. “So we need to do everything in our power to facilitate their success.”

Another part of the plan is rebranding Rocky Mountain Chocolate Factory stores with a new appearance but also to recommit to where the company was founded.

Rocky Mountain Chocolate Factory Board Chairman Jeff Geygan said in an email that the company intends to hold its annual stockholder meeting in Durango in August.

“This is the beginning of a much broader engagement with stockholders, franchisees, vendors and the local Durango community,” he said. “Over the next few years I can imagine RMCF working with the city and other local vendors to make this an annual festival-like event with many other local merchants joining in the fun,” Geygan said.

Sarlls said the company would like the event to be comparable to the events Warren Buffett holds in Omaha, Nebraska, for the Berkshire Hathaway Inc. stockholder meetings.

The plan also establishes a few muli-year outcomes for the company such as establishing a network of 250 or more stores that do over $800,000 in revenue, increase e-commerce sales from 2 to 10% and more than double the chocolate revenue and factory pound volume.


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