Rocky Mountain Chocolate Factory sold the franchise rights of U-Swirl Inc., a frozen yogurt franchise headquartered in Durango on May 1.
The move comes as part RMCF’s attempt to focus on its core operations in manufacturing and marketing.
U-Swirl originated in Henderson, Nevada, but after the company was acquired by RMCF in 2013, it was headquartered in Durango. The frozen yogurt company was sold to Foster’s Freeze, a California based company with over 60 locations.
Rocky Mountain’s sale of all remaining U-Swirl franchise-related assets represents the company’s exit from frozen yogurt operations completely. This includes its own Aspen Leaf frozen yogurt franchise with locations in Farmington and St. Joseph, Missouri.
In total, U-Swirl has 10 locations across the United States. In Fiscal Year 2022, the RMCF’s frozen yogurt operations segment generated about $2.9 million of revenue and $700,000 of adjusted earnings before interest, taxes, depreciation and amortization.
Between Fiscal Year 2017 and Fiscal Year 2022, revenue and adjusted EBITDA for the company’s frozen yogurt operations segment declined 45% and 60%, respectively, according to a news release from RMCF last week.
“The yogurt business has been a part of the Rocky Mountain Chocolate Factory family for over a decade, beginning with the launch of Aspen Leaf in 2010 and then our acquisition of U-Swirl in 2013,” said CEO Rob Sarlls.
Sarlls said the divestiture enabled the company to focus on manufacturing and marketing its chocolate products for a consistently growing marketplace.
The proceeds from the sale will be reinvested into RMCF’s factory and equipment to drive operational efficiencies, product development, and improve product quality and consistency, he said.
It will also allow the company to strengthen its relationship with its existing Rocky Mountain franchisees, something that was a primary focus for the company which was part of the company’s strategic plan.
The company has attempted to recommit itself to its Durango roots as part of the strategic plan. This included adding a Durango-based senior director of manufacturing and a director of research and development in February.