Kilwins Chocolates Franchise Inc.

With its stores located mostly in vacation and historic areas, Kilwins was founded in 1947 by Don and Katy Kilwin in northern Michigan, and has since expanded to stores located along the eastern part of the United States, from Key West, Fla., to Mackinac City, Mich., and from Portsmouth, N.H., to Fort Collins, Colo.

 “We consider our stores to be ideal for a vacation, whether a little break from work or a stroll downtown in an historic area, or for an actual vacation,” says Ron Brunette, Kilwins chief of design and branding. “We very much want to position our stores in locations where that kind of activity can take place.”

The company’s evolution accelerated three years ago when a new branding and marketing initiative began. The privately-held company continued an expansion of opening 10 or more new locations annually in an effort it calls “planful growth.” 

“Don McCarty, CEO, and the executives team wanted very much to ensure that growth was done thoughtfully, through the correct brand lens,” Brunette explains.

The ‘8 Ps’

The most important factor in the company’s growth was using a “brand lens,” which company executives ranked hierarchically and named “The 8 Ps: product, pricing, promotion, packaging, people, place, presentation and publicity.” Each of these areas were reviewed to evaluate how well it exemplified the company’s brand message.

Every aspect of the company was considered, from its existing and new products to a new promotional strategy, training support, store design and visual merchandising. “From logo to location, each aspect of the 8 Ps was reviewed and redesigned or reformulated as needed,” Brunette says, For example, over the last few years, all of the company’s nearly 200 different packages were custom-created for the company’s products, using a redesigned color palate, new logos and new materials.

Concurrently, every aspect of store design, fixturing, lighting and layout was reviewed, down to the detail of creating five branded paint colors and three proprietary designs of wallpaper to give franchisees a group of proprietary finishes from which to select one or two for a particular location.

 In 2011, Kilwins built a new 40,000-square-foot manufacturing plant in a rehabilitated existing building in Petoskey, along with a corporate headquarters, company store and Chocolate Kitchen facility offering free tours throughout the day. “Our products are handcrafted,” Brunette maintains. “It’s not the easiest or the cheapest way to do it, but we feel it is best for our customers and our brand. All of our efforts are really in support of making confections that are hand-crafted following time-tested original recipes, with the highest quality ingredients possible.”

Varied Product Offerings

Kilwins competes in the artisan chocolate market with many of its high-tier products. “For example, we have the single-origin line, which is chocolate from a single country,” Brunette says. “We will focus on one new country every year. This year, it’s the Dominican Republic; next year, it’s Peru; in 2015, Mexico; in 2016, Venezuela. We develop a full product line across-the-board, with single-origin ice cream, truffles, toppings and chocolate bars in milk, white and dark chocolate. I’ve never even seen single-origin ice cream in the marketplace!”

 Besides single-origin programs and its popular original recipe ice cream and made-in-store items, the company also produces chocolates ranging from traditional truffles to more adventurous chocolates for gourmet tastes, such as savory truffles made with bleu cheese, chipotle peppers, stout beer or bacon. To promote these products, the company uses a calendar of 15 traditional American holidays and seasons that it augments with special and limited-edition products throughout the year. For example, a filigreed heart truffle could be produced for Valentine’s Day, a new fudge could be created to commemorate July 4th, or pumpkin pie ice cream might be used to highlight Thanksgiving. 

Continued Growth and Innovation

“For marketing use, we have thousands of product shots we’ve done to highlight our confections in a very different way than we did before,” Brunette notes. “They are attached to our Style Guide, which is almost 200 pages long, that serves as our handbook of the Kilwins brand philosophy. Everything in the guide is proprietary to Kilwins.”

 Many Kilwins locations are near shorelines because they are vacation destinations, so in 2011 the company added 16 flavors of salt water taffy in two collections to its product lineup. “We make all our own Salt Water Taffy Chews,” Brunette declares. “We learned that process and even use original reconditioned salt water taffy equipment from the 1940s. We’re actually using that equipment and making taffy the same way it was made in the 1940s! That’s really important to us, that our confections are made according to the old way of doing things.”

Each store’s business is divided among chocolates, ice cream and what the company calls “MIS,” or made-in-store items, all using recipes developed almost 80 years ago. The company transports all its products with a dedicated fleet of trucks that are split into a refrigerated section for confections and a frozen section for ice cream. It has been rolling out a point-of-sale system so it can track what is selling best at each location, and is testing out a streaming music service that varies the music by location, time of day and season.

 The Kilwins real estate development group is always evaluating new, attractive, charming locations for stores, and suitable local franchisees that might be interested in owning a store. While the company owns a few company-run stores, it follows a franchise model for expansion, with each owner running their own store according to established brand standards.

Because Kilwins wants the best locations in attractive areas and franchisees who are excited by the concept, finding and securing the right store location is a constant challenge. The company is careful to create partnerships only with owners that believe in the Kilwins brand.

Kilwins works one-on-one with franchisees on their stores, which are usually renovations of existing buildings in which their best architectural features are carefully preserved. In fact, Kilwins encourages franchisees to include those existing elements that relate to the area in which the stores are located whenever possible, mixed in with Kilwins branded elements. The company‘s new store format and philosophy has been used in approximately 20 locations to date and is being rolled out to additional franchisees as their franchises are renewed.

 To continue to support the brand, every franchisee undergoes extensive initial training, as well as continuing training and information through regional meetings, webinars and video, teaching everything from recipes for made-in-store items to techniques of visual merchandising.

 Brunette reflects on the changes the company has made or is implementing. “We’ve gone through tremendous change, but none of the change happened because the things they replaced were failures,” he marvels. “They all happened in response to wanting to continue to create excellence around this really terrific brand.”