Rocky Mountain Chocolate Factory, Inc. (RMCF) announced a portfolio of 34 new franchise store commitments, a 25% jump in full‑franchise growth and the largest surge in development activity in the company’s history. The new stores are spread across four regions: nine in Southeast Florida, ten in the Chicago metro area, eight covering Charleston, Denver and Santa Fe, and seven in Central New Jersey, bringing the total franchise network to more than 140 locations.
The expansion is a cornerstone of RMCF’s transformational strategy to revitalize its brand, deploy a new enterprise‑resource planning (ERP) and point‑of‑sale (POS) system, and deliver a modern, craft‑focused store experience. Management believes the new prototype will enhance customer engagement and support scalable growth, while the ERP rollout is expected to improve operational visibility and cost control across the network.
Despite the upbeat expansion news, RMCF’s recent financials reveal ongoing challenges. Q4 2025 earnings showed a net loss of $6.1 million, or $(0.86) per share, driven by higher raw‑material costs and significant marketing and administrative spend tied to the brand refresh. Gross margins slipped to a negative product and retail margin of $(0.8) million, reflecting the cost pressure. Q2 2025 also reported a net loss of $0.7 million, or $(0.09) per share, with a negative gross profit of $(33,000). These results underscore that while franchise growth is accelerating, profitability remains under pressure.
Interim CEO Jeff Geygan emphasized that the new store prototype “is more than a redesign. It is a reaffirmation of our heritage and the craft that built this brand.” He added that the expansion “brings that spirit to life in a way that is relevant, scalable and positioned for national growth.” Geygan also highlighted the company’s focus on improving liquidity, rebuilding the executive team, and returning to sustainable growth and profitability, signaling confidence in the long‑term upside of the expansion plan.
The market reacted positively, with RMCF’s stock rising 3.1% on the day of the announcement. Investors were drawn to the scale of the franchise commitments and the strategic shift toward a modern store model, while also noting the company’s ongoing financial headwinds. The expansion is seen as a key driver of future revenue growth, but analysts remain cautious about the company’s ability to translate store openings into profitability given the current margin environment.
Overall, the new store commitments represent a significant milestone for RMCF, marking a decisive step toward revitalizing its brand and expanding its footprint. However, the company’s recent losses and margin compression highlight the need for disciplined cost management and effective execution of the new ERP and POS systems to ensure that the expansion translates into sustainable profitability.
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