Rocky Mountain Chocolate Factory, Inc., incorporated in 1982, is an international franchiser, confectionery manufacturer and retail operator in the United States, Canada and the United Arab Emirates. The Company manufactures an extensive line of premium chocolate candies and other confectionery products. The Company\'s revenues are derived from three principal sources: sales to franchisees and others of chocolates and other confectionery products manufactured by the Company; the collection of initial franchise fees and royalties from franchisees\' sales; and sales at Company-owned stores of chocolates and other confectionery products.
\n'); document.write('The Company typically produces approximately 300 chocolate candies and other confectionery products, using proprietary recipes developed primarily by its master candy maker. These products include many varieties of clusters, caramels, creams, mints and truffles. During the Christmas, Easter and Valentine\'s Day holiday seasons, the Company may make as many as 100 additional items, including many candies offered in packages specially designed for the holidays. A typical Rocky Mountain Chocolate Factory store offers up to 100 of these candies throughout the year and up to an additional 100 during holiday seasons. Individual stores also offer more than 15 premium fudges and other products prepared in the store. The Company uses chocolate, nut meats and other ingredients in its candies and continually strives to offer new confectionery products in order to maintain the excitement and appeal of its products. The Company develops special packaging for the Christmas, Valentine\'s Day and Easter holidays, and customers can have their purchases packaged in decorative boxes and fancy tins throughout the year. Approximately 40% of the products sold at Rocky Mountain Chocolate Factory stores are prepared on the premises.
\n'); document.write('The Company recently launched a new store design concept intended specifically for high foot traffic regional shopping malls. The new store design concept is modern with crisp and clean site lines and an even stronger emphasis on the Company\'s unique upscale kitchen. Based on encouraging initial results, the Company is requiring that all new Rocky Mountain Chocolate Factory stores incorporate the new design concept.
\n'); document.write('The average store size is approximately 1,000 square feet, approximately 650 square feet of which is selling space. Most stores are open seven days a week. Typical hours are 10 a.m. to 9 p.m., Monday through Saturday, and 12 noon to 6 p.m. on Sundays. Store hours in tourist areas may vary depending upon the tourist season.
\n'); document.write('In fiscal 2002, the Company opened its first full service retail kiosk concept. The kiosk is a vehicle for retail environments where in-line real estate is unavailable or build-out costs and/or rent factors do not meet the Company\'s financial criteria. The kiosk, which is approximately 250 square feet, incorporates the Company\'s trademark cooking area where caramel apples, fudge and other popular confections are prepared in front of customers using traditional cooking utensils. The kiosk also includes the Company\'s core product and gifting lines in order to provide the customer with a full Rocky Mountain Chocolate Factory experience.
\n'); document.write('The Company currently establishes Rocky Mountain Chocolate Factory stores in four primary environments: factory outlet malls, tourist areas, regional malls and street fronts. Each of these environments has a number of attractive features, including high levels of foot traffic.
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