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Taking a Chance on Chocolate

Frank Crail, a former CIA systems analyst and tech company founder, wanted a simpler life. He and his wife wanted to move from Southern California to a small town where they could start a small business and raise a large family. They accomplished the latter, eventually having seven children.

But that small-town business idea did not remain small; under Crail’s leadership as CEO, Rocky Mountain Chocolate Factory grew to become the largest candy store chain in the United States. Thirty years after it was founded, Rocky Mountain Chocolate Factory has more than 350 franchises in the United States, Canada and the United Arab Emirates.

Crail had been co-founder and president of a company that developed billing software for the cable television industry when he and his wife decided to move to Durango, Colo. He knew he wanted to start some type of business there. “I looked around for a business to open and really didn’t fi nd anything that seemed to make any sense,” Crail tells SUCCESS, “and actually went up and down the street talking to people and asking, ‘What kind of business does Durango need?’ ”

Many people told him a carwash would be nice, but Crail couldn’t see himself running a carwash. Another suggestion he heard was a candy store, and that idea appealed to him.

Crail opened the first Rocky Mountain Chocolate Factory in May 1981 and started franchising the following year. Four years later, his company went public.

Now offering about 300 varieties of chocolate candies and confectionary products, such as fudge, gourmet truffles and caramel-dipped apples, Rocky Mountain Chocolate Factory continues to grow. It recently introduced a new concept called Aspen Leaf Yogurt, a self-serve yogurt franchise, and the fi rst store opened in San Antonio, Texas, in December.

SUCCESS: You created a family experience for customers by drawing them in with the aroma of chocolate and encouraging them to watch it being made. Was this part of your marketing plan?

Frank Crail: Yes, it was. We try to create an ambience in the store where people feel comfortable coming in, where kids like to watch stuff being made. We sample; we try not to be just a chocolate store where you can come in and buy some chocolate and leave, but we really try to engage people and entertain them and actually answer questions and make them part of the process of what we are doing. And I think that’s one of the trademarks of Rocky Mountain.

Was it your plan to franchise in the beginning?

FC: No, it wasn’t. Really what happened, after we got the first store up and running, one of the other partners thought he would like to do it on a full-time basis … So we found a little space in Breckenridge [Colo.], and that’s when we opened our second store. And Jim Hilton, who was the partner, moved to Breckenridge and ran that store for about six months. And then we opened a third store in Boulder, Colo., and the third partner, Mark Lipinski, operated that store. And so there still wasn’t any grand idea of ‘Let’s franchise.’

Another friend of ours who lived in San Diego heard about it and said, ‘Wow, I would like to move out of San Diego and try something if you guys franchise.’ At that point, we really didn’t know anything about franchising; it was totally new. So I started doing some investigation on what it would take to franchise, and we decided, ‘Let’s give it a shot; let’s test it and see if it makes any sense as a business opportunity.’ Things went well, and so we decided we would start franchising.

What strategies did you use to grow your business?

FC: The No. 1 thing is you have to have a great product. We have never cut back on the expense of raw materials. From the very beginning we put up the best product we possibly could. And I think no matter how good your service is, no matter how great the ambience is in the store, the customer is not going to come back unless they know the product they bought is really good.

Were you ever fearful in the beginning or as you were building your company?

FC: One of the things that drive people to be successful is the fear of failure. Many times I would wake up at 2 in the morning and think, Oh my gosh, how am I going to make payroll? Or, Is this really going to work? How are we going to overcome this obstacle? I guess I sort of have a habit of looking at what’s the worst possible thing that could happen. Anything better than that is going to be good.

It’s much easier now than it was in the early days, when I just felt like I was the only person worrying about anything. Now I’ve got lots of people that help me do that.

What daily practices help you stay motivated and focused?

FC: Well, being around good people is something that is very important to me. I like to be able to know that when I wake up in the morning I can hardly wait to get to work. I still feel that way today, and I’ve been doing this for 30 years.

Going from software to chocolate seems like a stretch—was that difficult?

FC: When I had the computer consulting business, it was fairly small, and we had 15 employees. We were consultants; we would go in and work for bigger companies, and we were put into a cubicle and did a lot of technical work. So the part that I like about the chocolate business is much more interaction with people; whether it’s customers or vendors, you meet some of the greatest people in the world in this industry.

I’m more of a people person. In this business, it’s not just about the chocolate. If I look at the core competency of Rocky Mountain Chocolate Factory, it’s not manufactured chocolates so much; it’s our ability to support people in the business and make them successful. It’s our knowledge of the chocolate business, our knowledge of real estate, our knowledge of how to support people, our knowledge of taking people who want to be entrepreneurs and don’t necessarily have the tools or the inclination to go out and learn it from scratch. But there is someone here to help them every step of the way and put them in business and help them be successful.

What advice can you give to beginning entrepreneurs wanting to start a business today?

FC: Don’t ever give up. If you really believe in your vision, do not give it up for anybody. There’ll be a lot of people who will tell you that it will never work or you’ll never get it done, for there is too much competition and you don’t have enough money; there are a lot of different reasons why people try to discourage you. If you are sure you have something, just don’t give up. And just as equally important, surround yourself with the best people you possibly can.

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