A Rocky Mountain Chocolate Factory shop founded in Taos 28 years ago will sell its final batch of sweets Aug. 9 before liquidating its Taos Plaza location and leaving it to the Durango, Colorado, franchisor to find a way to stay in town – or not.
"We just don't see the numbers that we usually see, and this is our busy season," said Bowe Ellis, who became the fourth owner of the shop, located in a space leased by the Hotel La Fonda, after he took it over from his father, Chris Ellis, and stepmother, the late Annouk Ellis.
The franchise was established in nearby McCarthy Plaza in 1992, and then was relocated to the La Fonda in 1999. The shop has been in Ellis' family since 2004. He became its owner in 2014.
While summer days in years past would bring a steady flow of foot traffic into the shop, with events like Taos Plaza Live drawing large crowds that would filter through for chocolates, caramel apples or ice cream, business during the pandemic has fallen off by around 55 percent, Bowe Ellis estimated.
Restaffing the shop after Gov. Michelle Lujan Grisham shut most businesses down in mid-March has also proven difficult, demanding more and more hours from Ellis and longtime store manager Evelyn Espinoza. Ellis also works as an electrical engineer.
When the store's lease came up for renewal this month, Ellis decided it was time to move on.
Despite the challenges posed by the pandemic, he was optimistic he would find a fifth owner to keep the franchise going, but he said a promising deal he had set in motion with two local business partners - whom he did not identify - was nixed by the Durango-based company.
"At the outset what [the business partners] wanted to do was sell a particular product of theirs in the store that was not part of the Rocky Mountain Chocolate Factory brand," Ellis said. "They had approached Rocky with that request. They needed it in order to go forward with them. Rocky denied that."
Ellis said he and the partners had already signed a letter of intent. The partners had put down a deposit.
Later, the partners told the company they would drop their request to sell the product, but Ellis said Rocky's team had already soured on the deal.
"When I called Rocky to get a clarification, to ask if there could be a second chance to look at this, I was just told that there was no further subject to discuss and that was it," Ellis said. "I had a sale and it fell through because of Rocky Mountain denying them."
Efforts to reach a spokesperson at the corporation for comment regarding the failed sale or whether it will seek to retain a foothold in Taos were unsuccessful as of press time Wednesday (July 29).
Feeling burned by the company's decision and anxious to move forward, Ellis now plans to sell off the shop's furniture and equipment after its final day in business on Aug. 9. He said it will be much more challenging for the company to start a new franchise from scratch once his agreement terminates with the corporation.
"I can tell you right now that the cost of doing that is pretty prohibitive," he said. "There's a new franchise fee and there are all sorts of requirements for putting new equipment in. It would be a lot more work than it would have been if someone had just bought from me."
There's a question of whether the corporation will survive at all.
According to the NASDAQ stock exchange, Rocky Mountain stock price has lost more than 50 percent of its value since January, going from $9.20 per share to $3.47 as of Wednesday. The company, which operates a little over 400 stores in the United States, Canada, South Korea, Qatar, the Republic of Panama and the Republic of the Philippines, reported a meager $188,000 in retail sales for the quarter ended May 31.
Much of that has been due to government mandated closures in mid-March. Here in New Mexico, businesses in the food industry are limited to 50 percent capacity and cannot seat customers indoors.
Ellis said that he, Espinoza and their few remaining employees were struggling to keep their shop going. They made adjustments to ride out the public health crisis - like reducing hours from noon to 6 p.m., wearing masks and implementing other controls to make customers feel safe.
Despite those efforts, the store is set to go the way of thousands of other businesses that have closed this year due to the pandemic when it sells its last confections on Aug. 9.