How Much Does a Kona Ice Franchise Owner Make?

The official answer is that the 2026 FDD does not disclose owner earnings, sales, profit, EBITDA, net income, or cash flow. Item 19 on page 52 states that Kona Ice, Inc. makes no representations about future franchisee performance or past performance of franchised or company-owned outlets. Therefore, no brand-reported average, median, quartile, or percentage-achieving result exists to anchor a direct earnings conclusion.

This is not an FDD-gate failure. The Federal Trade Commission’s franchise guide explains that an Item 19 disclosure is optional, but any franchisor sales or earnings claim generally must appear there and be supported by a reasonable basis. The absence of an Item 19 claim means public revenue estimates, broker statements, search-result snippets, and franchisee anecdotes cannot be presented as official Kona Ice performance.

What does Item 20 add to the analysis?

Item 20 provides system scale and turnover context, not unit economics. Kona Ice reported 1,816 franchised outlets at the start of 2025 and 1,929 at year-end, with 140 openings, 27 outlets ceasing operations for other reasons, and 99 transfers during the year. Four company-owned outlets existed at year-end 2025, but the FDD gives no sales or profit data for them.

Those counts help define the population and identify franchisees for interviews. They do not establish that a typical outlet earns money. The FTC advises buyers to use Item 20 contacts to ask current and former franchisees about revenue, costs, profitability, operating tenure, and reasons for leaving.

The range is estimated by applying transparent margin assumptions to a mobile-food-service revenue anchor, then subtracting Kona Ice’s disclosed fixed annual fees. The model is for one primary KEV in contract years 3–6, excludes smoothies and Additional Equipment, and is rounded only after the full-precision calculation.

The IRS endpoints are reproducible from 2023 Table 1: all restaurant and drinking-place sole-proprietor returns reported approximately $77.217 billion of business receipts and $2.610 billion of net income less deficit; returns with net income reported approximately $58.742 billion of receipts and $8.013 billion of net income.

What exactly does “owner-operator benefit” include?

It combines residual business income with the economic value of work performed by the owner. The IRS Schedule C proxy does not deduct a sole proprietor’s own wage, so the estimate is not equivalent to passive business profit or a market salary paid in addition to profit.

Active owner operation is central to this model, and a fully manager-run structure is not supported by the benchmark economics. Item 15 requires a Managing Owner with at least 51% ownership and voting power to directly supervise and participate in day-to-day operations. The owner or Managing Owner must be active for at least the first 60 days. A Designated Manager may be allowed later under specified conditions.

The 2023 BLS Special Food Services benchmark reports a $47,820 annual mean wage for first-line food-service supervisors. The 2024 BLS benchmark for food-service managers in food services and drinking places is $63,040. Subtracting either wage from the owner-operator benefit produces negative residual profit in all three scenarios, although the Upside scenario approaches break-even under the lower supervisory proxy. Employer payroll taxes and benefits are not added, so these manager-run results are optimistic.

The recurring franchise charge is primarily a fixed-dollar burden rather than a percentage-of-sales royalty. For one primary KEV in years 3–6, the modeled mandatory fixed stack is $6,476 per year. This figure is official FDD data assembled into a compatible annual total; it is not a franchisor-reported profit calculation.

The table excludes the recommended Google Voice number, optional KonaOS AI Premium, optional E-Lead service, optional smoothies, Additional Equipment royalties, conference costs, non-compliance charges, payment-service fees, and other contingent amounts. It also excludes variable operating expenses such as branded products, ice, sugar, vehicle fuel and maintenance, insurance, event fees, storage, permits, payment processing, and payroll. Fixed fees may increase under the adjustment provisions described in Item 6.

Why does the fixed royalty structure matter?

A fixed royalty consumes a larger share of revenue when sales are low and a smaller share when sales are high. At the Conservative revenue scenario, the $6,476 modeled fixed stack equals about 2.72% of revenue. At Base revenue it equals 2.18%, and at Upside revenue it equals 1.82%. That operating leverage amplifies weak territories and rewards stronger volume, but it does not eliminate variable-cost risk.

The largest uncertainty is whether the government establishment benchmarks resemble a specific Kona Ice territory and vehicle portfolio. Census defines a Mobile Food Services establishment as the central operating location, not each vehicle or cart. A Kona Ice franchise may operate one KEV plus Additional Equipment in a Protected Territory, so the Census denominator is not necessarily equivalent to one KEV or one franchise agreement.

How should the Census and IRS benchmarks be interpreted?

They are structural proxies, not forecasts. The 2022 Economic Census Sector 72 program is closely matched to the mobile format through NAICS 722330, but it covers employer establishments across many concepts and operating models. The IRS margin evidence is broader still: restaurants and drinking places operated as sole proprietorships, not a mobile shaved-ice cohort.

The Conservative margin includes profitable and loss-making returns in aggregate. The Upside margin uses only returns reporting net income, so it has survivorship and selection bias. The Base margin is not reported by the IRS; it is a transparent midpoint used to avoid treating either endpoint as the single expected result.

A buyer should replace every external proxy with territory-specific records and franchisee evidence before making a capital decision. Because Item 19 provides no brand financial performance representation, the most decision-useful evidence will come from written substantiation for any seller statement, records for an existing business if applicable, and consistent interviews with current and former franchisees.

The official Kona Ice U.S. franchise website describes the event-focused mobile format, while the official Kona Ice vehicle overview helps distinguish the KEV and other mobile equipment. Those pages explain the concept; they do not replace Item 19 evidence or franchisee financial records.

The strongest defensible public conclusion is an estimated owner-operator benefit of roughly $2,000 to $42,000 per year for one primary KEV, with a Base scenario near $18,800. It is a Mode D scenario range with Limited confidence, not an official Kona Ice earnings disclosure. The principal driver is revenue and operating margin in the local event calendar; the fixed fee schedule is material but secondary.

The largest unresolved uncertainty is the mismatch between a Census employer establishment, an IRS sole proprietor, and a specific Kona Ice territory that may use multiple vehicles or Additional Equipment. Owner involvement is also decisive: the modeled range compensates an active owner for labor, and subtracting a full-year management wage produces negative residual profit in these scenarios. Before relying on any number, a buyer should verify the current Item 19, request written substantiation for any earnings statement, and reconcile comparable franchisee records through detailed current and former franchisee interviews.