As the Food and Drug Administration (FDA) delays finalizing its proposed rule governing the sale of electronic cigarettes while it reviews public comments, the "vaping" franchise opportunities are continuing to grow.
The end of September marks the deadline for providing comments to the proposed FDA rule which will impose warning labeling requirements, mandate childproof packaging and outline advertising guidelines for the more than 7,700 e-cig flavors being sold under more than 450 brands, which currently have no labeling or testing requirements. The FDA said it was drafting the rule to respond to growing public concerns about liquid nicotine poisonings and exposures. Proposed newly "deemed" products would include electronic cigarettes, cigars, pipe tobacco, certain dissolvables that are not "smokeless tobacco," gels, and waterpipe tobacco.
Meanwhile state and local authorities are filling the void by enacting laws outlawing sales of e-cigarette products to minors, banning "vaping" in public places and placing other restrictions similar to those imposed on tobacco products.
Despite the looming FDA rule and state and local laws, however, the vaping franchise industry surprisingly continues to expand. For example, the newly launched franchisor, KURE which sells "upscale vaporium" franchises offering free samples of more than 90,000 e-juice flavor combinations, free Wi-Fi, snacks and beverages, as well as vaping products and hardware, signed agreements to open 22 locations in its first three weeks of operation. The popular concept has an attractive price point as well with some franchisors, like Palm Beach Vapors offering an initial franchise fee as low as $15,000 and estimated start-up costs at less than $100,000. In addition, it seems unlikely that the FDA rule when finalized will create a large dent in franchise sales. The biggest impediment to brick and mortar franchise locations offering vaping cafes, lounges, and shop atmospheres are local regulations restricting the use of e-cigarettes in enclosed public places and not the FDA's intended age restriction and regulation of labels and other disclosures. For now, franchise systems can seek to avoid expansion into highly regulated cities when other less restrictive territories exist. It is probably safe to assume that e-cigarette franchise options hasn't peaked.
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