Bahama Buck’s

Bahama Bucks 1

Bahama Buck’s is shaving off a niche in the dessert market.

By Tim O’Connor

Bahama Buck’s wants to take its customers on a mini vacation with every cup of shaved ice they purchase. The franchise offers more than 100 base flavors and a variety of toppings, creating more than 9 billion combinations, from pink lemonade mixed with cherry to pickle juice with chili salt and chamoy (available only at select locations). Those customization options appeal to millennials and help shaved ice find a niche in the dessert market between ice cream and frozen yogurt.

Bahama Buck’s is at the forefront of the shaved ice/Sno market. The company is experiencing a period of rapid growth and is looking for franchisees who can help turn its gourmet Sno into a desirable dessert option across the country, and who are willing to follow its model of “blessing our guests.”Bahama Fact Box

That model takes different forms throughout the organization. For the corporate team, its guests are the individual store owners, for the owners it’s the staff and for the staff it’s the customer. Adhering to that service mindset is how Bahama Buck’s creates the ultimate tropical dessert experience.

President Blake Buchanan founded the first Bahama Buck’s store in June 1990 when he was still a sophomore at Texas Tech in Lubbock, Texas. Buchanan had seen a sale listing selling shaved ice equipment and it sparked his interest in creating his own business. “Little did I know it would be a career decision right there and then,” he says. “I didn’t know how to make ice cream or yogurt but I knew how to freeze water.”

Buchanan’s father and grandfather helped him build the first Sno stand in the backyard. His first employees were his future wife, Kippi, and friend Eric Lee, now the company’s CFO. The stand confused Texas Tech students at first. Some had never had shaved ice or Sno before and others thought it sold hotdogs.

But sales doubled the second year as word of mouth spread and Buchanan and Lee soon realized they had a concept that could catch fire. A year later, the duo opened a store in the Phoenix market to take advantage of the young population and year-round warm weather.

The concept didn’t take off as quickly as Buchanan and Lee envisioned. The company spent the last 23 years developing its product and growing steadily, until three years ago when it finally hit the critical mass Buchanan and Lee imagined when they were still college students.

In 2013, the company had only 28 stores. Since then, Bahama Buck’s has sold more than 200 locations. The company now has 87 stores operating and another 166 in development. A new store is on pace to open every three weeks and existing locations have witnessed a 92 percent sales increase in the past three five years.

Franchisee Focused

One of the things that has propelled Bahama Buck’s to the top of the shaved ice market is that the company manufactures its own flavorings. That allows it to partner with companies such as Coca-Cola, Mondelez and Impact Confections to create fun flavors based on well-known brands. Bahama Buck’s also offers shock flavors such as pancakes and syrup that get customers interested in trying the concoction in shaved ice form.

Rapid expansion is good for revenue, but it can also be a challenge for a franchisor. The company must make sure it has the people and processes in place to manage the sudden influx of new locations and ensure consistent quality across the brand.

Bahama Buck’s is adjusting to its growth by spending more time identifying the right locations and vetting owners. When possible, the company looks for franchisees who want to open multiple stores so that they have more experience with each successive location. “They understand the system, the product and they know the volume they’re going to run into,” Lee explains.

Bahama Buck’s pitches itself as a way for franchisees to control their own destiny. “There’s such an appeal to not only loving your work but to work at something you love doing,” Lee says. The typical Bahama Buck’s location is able to return two to three times what the standard industry franchise restaurant can do, he adds.

That return is possible because of the support the corporate team provides franchisees at each stage of development. Owners must participate in a weeklong program at Bahama Buck’s University in Lubbock where they learn how to make the product and run their business. The company then aids in site selection and, once a location is chosen, sends in a fixture team to set up, decorate and make the store functional.

A grand opening team ensures the launch goes smoothly and Bahama Buck’s provides operations and marketing personnel to help the location create continued success. Those teams work with each store to create local goals with corporate rewards. “They [the franchisee] get involved, they get incentivized and it’s a win-win for everybody,” Lee says.

In February, Bahama Buck’s launched its latest support initiative, a web portal for franchisees called Icebox. Icebox provides stores with instantaneous data about performance, online training videos, marketing resources, equipment support and a company newsletter. The idea stemmed from a committee of franchisees that advises the corporate team.

Pacing Growth

When the interest in Bahama Buck’s franchises started surging in 2013 the company began to consider how it would manage that growth. In November 2014, Bahama Buck’s consolidated the offices and warehouses it had spread around Lubbock into a new 50,000-square-foot facility. Its corporate staff count rose from 10 people to more than 100. “With that new growth coming on we knew we needed more support,” Lee says.

Although many franchisees are developing multiple stores, Bahama Buck’s is being careful not to push too fast. The 166 planned openings are being paced out over the next few years to avoid overwhelming both the corporate staff and the owners.

Bahama Buck’s goal is to reach an average unit volume of $500,000 annually and have 200 locations up and running by the end of 2018. The company’s investments and selection of franchisees who buy into the “blessing our guests” philosophy is putting those targets in reach. “Both those goals we set around 2012,” Buchanan says. “We’ve had to ramp up to make sure those goals happen.”

 

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