Growth proceeds from a proven flagship to a measured multi-city store rollout, then to franchising, kiosks, airport sites and packaged retail, and finally to regional expansion. Sequencing is deliberate: the concept and its economics must be proven and systematised before they are replicated or franchised.
Rollout sequence
- Phase 1 (Years 1–2): launch the flagship experiential store in Johannesburg, build the central production kitchen, and introduce mobile catering services.
- Phase 2 (Years 2–3): open stores in Pretoria, Cape Town and Durban, and expand corporate catering and festival operations.
- Phase 3 (Years 3–5): launch the franchise programme, open shopping-mall kiosks and airport locations, and supply packaged ice cream to premium retailers.
- Phase 4 (Years 5–10): expand into Namibia, Botswana, Zambia, Mozambique and Mauritius through franchising and master-franchise agreements.
Franchising and asset-light scale
Franchising is the capital-efficient engine of national scale. Once the concept, recipes, operations and brand are proven and documented, franchisees fund their own outlets while the Company earns initial fees, ongoing royalties and manufacturing margin on centrally supplied product, growing the footprint and brand without funding every outlet. Kiosks add a capital-light, high-footfall format, and packaged products extend the brand into supermarkets. This is why the model can target 150-plus outlets within a decade on a modest initial raise, but it depends entirely on first proving a repeatable, quality-controlled system.
Analyst flagProve and systematise before franchising — and mind the capital
The greatest risk to a franchise-led model is scaling before the concept is genuinely repeatable: poorly-run franchise outlets damage the brand faster than good ones build it. The plan therefore proves the flagship, builds the central kitchen and documents the system before franchising. Note too that the R16 million funds Phase 1; the company-owned store rollout of Phase 2 is funded from reinvested cash (tightening liquidity in the early years), and a faster or more company-owned expansion would require further capital, quantified in Sections 15 and 18.
Illustrative franchise economics
The franchise proposition must work for both the franchisee and the brand. The illustrative unit economics below show an attractive, capital-light growth engine: franchisees fund their own outlets and earn a sound return, while Frost & Roll earns fees, royalties and central-kitchen supply margin without funding each outlet.
|
Franchise metric |
Kiosk |
Store |
|---|---|---|
|
Franchisee investment |
~R0.9m |
~R2.2m |
|
Initial franchise fee |
~R150k |
~R300k |
|
Ongoing royalty |
6% of revenue |
6% of revenue |
|
Marketing levy |
2% of revenue |
2% of revenue |
|
Central-kitchen supply margin |
Recurring |
Recurring |
|
Indicative franchisee payback |
~2–3 years |
~3–4 years |