During an earnings call on 16/7, interim CEO Jeffrey Geygan announced that the company waived all shipping fees for franchisee and partner orders during the quarter ending 31/5. Starting 1/6, this policy transitioned to a fixed monthly fee.

"We believe this change will encourage stores to order more frequently, leading to a more consistent and higher-quality in-store experience for consumers," Geygan said.

A sign for the Rocky Mountain Chocolate Factory in Duluth, Minnesota. Photo: Rocky Mountain at Duluth

A sign for the Rocky Mountain Chocolate Factory in Duluth, Minnesota. Photo: Rocky Mountain at Duluth

Innovating to improve product quality

According to the company's annual financial report, Rocky Mountain Chocolate Factory encourages franchisees to order enough product for 2 to 4 weeks. However, before the free shipping initiative, the order frequency at many stores had dropped to every 4 weeks, and even every 6 weeks in some locations.

This infrequent ordering impacted product freshness. "We've seen a positive shift since the fee adjustment, with most stores returning to a bi-weekly ordering rhythm, as reflected in our ERP (enterprise resource planning) and POS (point of sale) data," Geygan said.

The shipping policy is just one of a series of reforms Rocky Mountain Chocolate Factory is implementing to improve financial performance and enhance overall operational efficiency.

Accelerating digitization and modernizing the supply chain

Since January, the company has implemented a new ERP system to synchronize core business functions, improving control over the supply chain, purchasing processes, production, and inventory.

Rocky Mountain Chocolate Factory also appointed Luis Burgos, a former executive at Kimberly-Clark and U.S. Cotton, as vice president of operations. "He brings valuable experience in lean manufacturing, continuous improvement, and Six Sigma quality management systems," the interim CEO noted.

In the near future, the company also plans to require all franchise locations to be present on food delivery platforms where feasible. This move aims to expand customer reach, boost sales, and modernize the shopping experience.

"We are progressively building a modern e-commerce ecosystem to complement our brick-and-mortar sales environment," Geygan emphasized.

The Dan (according to Supply Chain Dive)