10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

  X   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended May 31, 2013

___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________to________

Commission file number: 0-14749

Rocky Mountain Chocolate Factory, Inc.

(Exact name of registrant as specified in its charter)

Colorado	84-0910696
(State of incorporation)	(I.R.S. Employer Identification No.)

265 Turner Drive, Durango, CO 81303

(Address of principal executive offices, including zip code)

(970) 259-0554

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes    X     No 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes   X    No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	Accelerated filer
Non-accelerated filer	Smaller reporting company       X
(Do not check if a smaller reporting company)

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ____   No      X   

On June 30, 2013, the registrant had outstanding 6,080,290 shares of its common stock, $.03 par value.

1

ROCKY MOUNTAIN CHOCOLATE FACTORY, INC.

FORM 10-Q

TABLE OF CONTENTS

PART I.      FINANCIAL INFORMATION		3
Item 1.	Financial Statements	3
CONSOLIDATED STATEMENTS OF INCOME		3
CONSOLIDATED BALANCE SHEETS		4
CONSOLIDATED STATEMENTS OF CASH FLOWS		5
NOTES TO INTERIM (UNAUDITED) CONSOLIDATED FINANCIAL STATEMENTS		6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	11
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	16
Item 4.	Controls and Procedures	16
PART II.     OTHER INFORMATION		17
Item 1.	Legal Proceedings	17
Item 1A.	Risk Factors	17
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	18
Item 3.	Defaults Upon Senior Securities	18
Item 4.	Mine Safety Disclosures	18
Item 5.	Other Information	18
Item 6.	Exhibits	18
Signature		19

2

PART I.     FINANCIAL INFORMATION

Item 1.     Financial Statements

ROCKY MOUNTAIN CHOCOLATE FACTORY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

(unaudited)

	Three Months Ended May 31,
	2013		2012
Revenues
Sales	$	8,178,689	$	8,090,626
Franchise and royalty fees		1,999,173		1,567,567
Total revenues		10,177,862		9,658,193
Costs and Expenses
Cost of sales, exclusive of depreciation and amortization expense of $71,870 and $70,395, respectively		5,027,164		5,022,236
Franchise costs		478,810		544,426
Sales and marketing		505,437		461,182
General and administrative		1,270,704		840,096
Retail operating		840,962		931,013
Depreciation and amortization		235,756		237,140
Total costs and expenses		8,358,833		8,036,093
Income from Operations		1,819,029		1,622,100
Interest Income		11,664		11,294
Income Before Income Taxes		1,830,693		1,633,394
Income Tax Provision		584,154		571,065
Consolidated Net Income	$	1,246,539	$	1,062,329
Less: Net (loss) income attributable to non-controlling interest		67,232		-
Net Income attributable to RMCF	$	1,179,307	$	1,062,329
Basic Earnings per Common Share	$	.19	$	.17
Diluted Earnings per Common Share	$	.19	$	.17
Weighted Average Common Shares Outstanding		6,074,332		6,159,445
Dilutive Effect of Stock Options		237,416		151,317
Weighted Average Common Shares Outstanding, Assuming Dilution		6,311,748		6,310,762

The accompanying notes are an integral part of these consolidated financial statements.

3

ROCKY MOUNTAIN CHOCOLATE FACTORY, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

	May 31,		February 28,
	2013		2013
Assets	(unaudited)
Current Assets
Cash and cash equivalents	$	5,372,448	$	5,321,696
Accounts receivable, less allowance for doubtful accounts of $634,146 and $507,806, respectively		3,413,367		3,916,320
Notes receivable, current portion, less current portion of the valuation allowance of $10,382 and $10,382, respectively		240,516		197,078
Inventories, less reserve for obsolete inventory of $255,527 and $253,148, respectively		4,174,348		4,221,036
Deferred income taxes		643,748		628,633
Other		417,451		259,170
Total current assets		14,261,878		14,543,933
Property and Equipment, Net		6,628,690		6,777,143
Other Assets
Notes receivable, less current portion and valuation allowance of $37,400 and $37,400, respectively		517,750		469,362
Goodwill, net		1,046,944		1,046,944
Franchise rights		800,000		800,000
Intangible assets, net		476		635
Other		214,976		195,928
Total other assets		2,580,146		2,512,869
Total Assets	$	23,470,714	$	23,833,945
Liabilities and Stockholders’ Equity
Current Liabilities
Accounts payable	$	1,246,141	$	1,998,897
Accrued salaries and wages		512,289		1,184,739
Other accrued expenses		1,550,763		1,294,487
Dividend payable		668,832		667,532
Deferred income		475,179		417,484
Total current liabilities		4,453,204		5,563,139
Deferred Income Taxes		859,385		881,694
Commitments and Contingencies
Stockholders’ Equity
Preferred stock, $.10 par value; 250,000 authorized; 0 shares issued and outstanding Series A Junior Participating Preferred Stock, authorized 50,000 shares		-		-
Undesignated series, authorized 200,000 shares		-		-
Common stock, $.03 par value, 100,000,000 shares authorized,6,080,290 and 6,068,470 issued and outstanding, respectively		182,409		182,054
Additional paid-in capital		7,722,171		7,559,442
Retained earnings		9,152,568		8,642,093
Non-controlling interest in equity of subsidiary		1,100,977		1,005,523
Total stockholders’ equity		18,158,125		17,389,112
Total Liabilities and Stockholders’ Equity	$	23,470,714	$	23,833,945

The accompanying notes are an integral part of these consolidated financial statements.

4

ROCKY MOUNTAIN CHOCOLATE FACTORY, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(unaudited)

	Three Months Ended May 31,
	2013			2012
Cash Flows From Operating Activities
Net income	$	1,179,307		$	1,062,329
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		235,756			237,140
Provision for loss on accounts and notes receivable		70,709			88,000
Provision for obsolete inventory		-			15,000
Gain on sale of property and equipment		(2,600	)		-
Expense recorded for stock compensation		142,808			135,033
Deferred income taxes		(37,424	)		(68,829	)
Changes in operating assets and liabilities:
Accounts receivable		446,607			509,779
Inventories		262,391			604,183
Other current assets		(158,610	)		(185,437	)
Accounts payable		(968,459	)		(591,728	)
Accrued liabilities		(416,174	)		335,572
Deferred income		57,695			(10,500	)
Net cash provided by operating activities		812,006			2,130,542
Cash Flows From Investing Activities
Addition to notes receivable		(153,893	)		(37,351	)
Proceeds received on notes receivable		47,704			61,176
Proceeds from sale or distribution of assets		2,600			-
Purchases of property and equipment		(57,795	)		(252,852	)
Other		47,386			(2,565	)
Net cash used in investing activities		(113,998	)		(231,592	)
Cash Flows From Financing Activities
Repurchase of common stock		-			(362,680	)
Tax benefit of stock awards		20,276			5,740
Dividends paid		(667,532	)		(616,239	)
Net cash used in financing activities		(647,256	)		(973,179	)
Net Increase in Cash and Cash Equivalents		50,752			925,771
Cash and Cash Equivalents, Beginning of Period		5,321,696			4,125,444
Cash and Cash Equivalents, End of Period	$	5,372,448		$	5,051,215

The accompanying notes are an integral part of these consolidated financial statements.

5

ROCKY MOUNTAIN CHOCOLATE FACTORY, INC. AND SUBSIDIARIES

NOTES TO INTERIM (UNAUDITED) CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Nature of Operations

The accompanying consolidated financial statements include the accounts of Rocky Mountain Chocolate Factory, Inc., its wholly-owned subsidiary, Aspen Leaf Yogurt, LLC and its majority-owned subsidiary, U-Swirl, Inc. (collectively, the “Company”). All intercompany balances and transactions have been eliminated in consolidation.

Rocky Mountain Chocolate Factory, Inc. (“RMCF”) is an international franchisor, confectionery manufacturer and retail operator in the United States, Japan, South Korea, Canada and the United Arab Emirates. RMCF manufactures an extensive line of premium chocolate candies and other confectionery products.

Aspen Leaf Yogurt, LLC (“ALY”) was incorporated in the state of Colorado as Aspen Leaf Yogurt, Inc. on September 30, 2010 and organized through conversion as Aspen Leaf Yogurt, LLC on October 14, 2010. ALY was a franchisor and retail operator of self-serve frozen yogurt retail locations until the sale of substantially all of its assets in January 2013. ALY has ceased to operate any Company-owned Aspen Leaf Yogurt locations, or sell and support franchise locations.

On January 14, 2013, Ulysses Asset Acquisition, LLC (“Newco”), a wholly-owned subsidiary of the Company formed in the State of Colorado on January 2, 2013, entered into an agreement to acquire substantially all of the franchise rights of YHI, Inc. and Yogurtini International, LLC (collectively, “Yogurtini”), which are the franchisors of self-serve frozen yogurt retail units branded as “Yogurtini.” In addition, on January 14, 2013, the Company entered into two agreements to sell all of its membership interests in Newco and substantially all of its assets in ALY to U-Swirl, Inc., a publicly traded company (OTCQB: SWRL), in exchange for a 60% controlling equity interest in U-Swirl, Inc. U-Swirl, Inc. is in the business of offering consumers frozen desserts such as yogurt and sorbet. U-Swirl launched a national chain of self-serve frozen yogurt cafés called U-Swirl Frozen Yogurt and are franchising this concept. U-Swirl has built and operates cafés owned and operated by U-Swirl, Inc. (“Company-owned”) and franchises to others the right to own and operate U-Swirl cafés. It also franchises and operates self-serve frozen yogurt cafes under the name “Yogurtini” and “Aspen Leaf Yogurt.”

The Company’s revenues are currently derived from three principal sources: sales to franchisees and others of chocolates and other confectionery products manufactured by the Company; the collection of initial franchise fees and royalties from franchisees’ sales; and sales at Company-owned stores of chocolates and frozen yogurt and other confectionery products. The following table summarizes the number of stores operating under RMCF and its subsidiaries at May 31, 2013:

	Sold, Not Yet Open		Open		Total
Rocky Mountain Chocolate Factory
Company-owned stores		-		7		7
Franchise stores – Domestic stores		4		218		222
Franchise stores – Domestic kiosks		-		6		6
Franchise units – International		1		67		68
Cold Stone Creamery – co-branded		2		56		58
U-Swirl, Inc. Stores (Including Yogurtini and Aspen Leaf Yogurt)
Company-owned stores		-		14		14
Franchise stores – Domestic stores		4		57		61
Total		11		425		436

Basis of Presentation

The accompanying consolidated financial statements have been prepared by the Company, without audit, and reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial reporting and Securities and Exchange Commission regulations. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the consolidated financial statements reflect all adjustments (of a normal and recurring nature) which are necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. The results of operations for the three months ended May 31, 2013 are not necessarily indicative of the results to be expected for the entire fiscal year.

6

These consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended February 28, 2013.

Stock-Based Compensation

At May 31, 2013, the Company had stock-based compensation plans for employees and non-employee directors that authorized the granting of stock awards, including stock options and restricted stock units.

The Company recognized $142,808 of stock-based compensation expense during the three months ended May 31, 2013 compared with $135,033 during the three months ended May 31, 2012. Compensation costs related to stock-based compensation are generally amortized over the vesting period.

The following table summarizes stock option transactions for common stock during the three months ended May 31, 2013 and 2012:

	Three Months Ended
	May 31,
	2013			2012
Outstanding stock options as of February 28 or 29:		270,945			307,088
Granted		-			-
Exercised		-			-
Cancelled/forfeited		(88,725	)		(14,952	)
Outstanding stock options as of May 31:		182,220			292,136
Weighted average exercise price	$	7.93		$	10.64
Weighted average remaining contractual term (in years)		1.17			2.57

The following table summarizes non-vested restricted stock unit transactions for common stock during the three months ended May 31, 2013 and 2012:

	Three Months Ended
	May 31,
	2013			2012
Outstanding non-vested restricted stock units as of February 28 or 29:		57,030			101,980
Granted		280,900			-
Vested		(7,820	)		(10,420	)
Cancelled/forfeited		-			(560	)
Outstanding non-vested restricted stock units as of May 31:		330,110			91,000
Weighted average grant date fair value	$	11.78		$	9.15
Weighted average remaining vesting period (in years)		5.17			1.61

7

During the three months ended May 31, 2013, the Company issued 4,000 fully vested, unrestricted shares of stock to non-employee directors compared with 4,000 fully vested, unrestricted shares of stock to non-employee directors in the three months ended May 31, 2012. In connection with these non-employee director stock issuances, the Company recognized $48,400 and $37,200 of stock-based compensation expense during the three-month period ended May 31, 2013 and 2012, respectively.

During the three months ended May 31, 2013, the Company recognized $94,408 of stock-based compensation expense related to non-vested, non-forfeited restricted stock unit grants. The restricted stock units generally vest 20% annually over a period of five years. Total unrecognized compensation expense of non-vested, non-forfeited restricted stock units, as of May 31, 2013, was $3,609,515, which is expected to be recognized over the weighted average period of 5.2 years.

During the three month period ended May 31, 2013, the Company granted 280,900 shares of restricted stock units with a grant date fair value of $3,437,950 or $12.24 per share, compared with no restricted stock units awarded in the three months ended May 31, 2012. The restricted stock unit grants vest between 17% and 20% annually over a period of five to six years. There were no stock options awarded during the three months ended May 31, 2013 or 2012.

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model utilizing the following weighted average assumptions:

NOTE 2 - EARNINGS PER SHARE

Basic earnings per share is calculated using the weighted-average number of common shares outstanding. Diluted earnings per share reflects the potential dilution that could occur from common shares issuable through stock options and restricted stock units. For the three months ended May 31, 2013 and 2012, 101,661 and 105,236 stock options were excluded, respectively, from the computation of earnings per share because their effect would have been anti-dilutive.

NOTE 3 – INVENTORIES

The Company held the following inventory at May 31, 2013 and February 28, 2013:

	May 31, 2013		February 28, 2013
Ingredients and supplies	$	2,734,069	$	2,531,559
Finished candy		1,338,297		1,590,966
U-Swirl, Inc. food and packaging		101,982		98,511
Total inventories	$	4,174,348	$	4,221,036

NOTE 4 - PROPERTY AND EQUIPMENT, NET

Property and equipment at May 31, 2013 and February 28, 2013 consists of the following:

	May 31, 2013		February 28, 2013
Land	$	513,618	$	513,618
Building		4,777,476		4,764,005
Machinery and equipment		8,923,060		8,864,126
Furniture and fixtures		1,033,254		1,024,261
Leasehold improvements		1,930,991		1,930,991
Transportation equipment		392,755		392,755
		17,571,154	$	17,489,756
Less accumulated depreciation		10,942,464		10,712,613
Property and equipment net	$	6,628,690	$	6,777,143

8

NOTE 5 - STOCKHOLDERS’ EQUITY

Stock Repurchases

On February 19, 2008, the Company announced the plan to purchase up to $3.0 million of its common stock in the open market or in private transactions, whenever deemed appropriate by management. During the three months ended May 31, 2012, the Company repurchased 33,800 shares under the plan at an average price of $10.73 per share. The Company did not repurchase any shares during the three months ended May 31, 2013.

Cash Dividend

The Company paid a quarterly cash dividend of $0.11 per share of common stock on March 15, 2013 to shareholders of record on March 1, 2013. The Company declared a quarterly cash dividend of $0.11 per share of common stock on May 23, 2013 payable on June 14, 2013 to shareholders of record on June 4, 2013.

Future declaration of dividends will depend on, among other things, the Company's results of operations, capital requirements, financial condition and on such other factors as the Company's Board of Directors may in its discretion consider relevant and in the best long term interest of the shareholders.

NOTE 6 – SUPPLEMENTAL CASH FLOW INFORMATION

	Three Months Ended
	May 31,
Cash paid (received) for:	2013			2012
Interest	$	(8,606	)	$	(11,192	)
Income taxes		594,336			52,780
Non-Cash Operating Activities Accrued Inventory		215,703			243,605
Non-Cash Financing Activities Dividend payable	$	668,832		$	675,731
Accrued Capital Expenditures	$	-		$	47,216

NOTE 7 - OPERATING SEGMENTS

The Company classifies its business interests into five reportable segments: Franchising, Manufacturing, Retail Stores, U-Swirl, Inc. operations and Other. The accounting policies of the segments are the same as those described in the summary of significant accounting policies in Note 1 to these consolidated financial statements and Note 1 to the Company’s financial statements included in the Company’s Annual Report on Form 10-K for the year ended February 28, 2013. The Company evaluates performance and allocates resources based on operating contribution, which excludes unallocated corporate general and administrative costs and income tax expense or benefit. The Company’s reportable segments are strategic businesses that utilize common merchandising, distribution, and marketing functions, as well as common information systems and corporate administration. All inter-segment sales prices are market based. Each segment is managed separately because of the differences in required infrastructure and the difference in products and services:

Three Months Ended May 31, 2013	Franchising		Manufacturing			Retail			U-Swirl, Inc.		Other			Total
Total revenues	$	1,660,016	$	6,726,056		$	515,138		$	1,717,406	$	-		$	10,618,616
Intersegment revenues		-		(440,754	)		-			-		-			(440,754	)
Revenue from external customers		1,660,016		6,285,302			515,138			1,717,406		-			10,177,862
Segment profit (loss)		848,444		1,748,467			(44,859	)		168,079		(889,438	)		1,830,693
Total assets		1,334,534		10,035,858			1,277,606			3,357,523		7,465,193			23,470,714
Capital expenditures		8,451		31,481			5,611			-		12,252			57,795
Total depreciation & amortization		8,593		72,373			14,740			105,578		34,472			235,756

9

 

Three Months Ended May 31, 2012	Franchising		Manufacturing			Retail		U-Swirl, Inc.		Other			Total
Total revenues	$	1,567,567	$	6,956,432		$	1,677,281	$	-	$	-		$	10,201,280
Intersegment revenues		-		(543,087	)		-		-		-			(543,087	)
Revenue from external customers		1,567,567		6,413,345			1,677,281		-		-			9,658,193
Segment profit (loss)		668,935		1,818,267			12,635		-		(866,443	)		1,633,394
Total assets		1,463,906		9,594,086			5,158,282		-		7,460,317			23,676,591
Capital expenditures		7,539		52,422			160,859		-		32,032			252,852
Total depreciation & amortization		11,380		71,337			116,781		-		37,642			237,140

Revenue from one customer of the Company’s Manufacturing segment represented approximately $1.8 million of the Company’s revenues from external customers during the three months ended May 31, 2013 compared to $2.1 million during the three months ended May 31, 2012.

NOTE 8–GOODWILL AND INTANGIBLE ASSETS

Intangible assets at May 31, 2013 and February 28, 2013 consist of the following:

				May 31, 2013				February 28, 2013
	Amortization Period (Years)			Gross Carrying Value		Accumulated Amortization		Gross Carrying Value		Accumulated Amortization
Intangible assets subject to amortization
Store design		10		$	205,777	$	205,301	$	205,777	$	205,142
Packaging licenses	3	-	5		120,830		120,830		120,830		120,830
Packaging design		10			430,973		430,973		430,973		430,973
Total					757,580		757,104		757,580		756,945
Intangible assets not subject to amortization
Franchising segment-
Company stores goodwill					1,099,328		267,020		1,099,328		267,020
Franchising goodwill					295,000		197,682		295,000		197,682
Manufacturing segment-Goodwill					295,000		197,682		295,000		197,682
Trademark					20,000		-		20,000		-
Total Goodwill					1,709,328		662,384		1,709,328		662,384
Franchise Rights					800,000		-		800,000		-
Total intangible assets				$	3,266,908	$	1,419,488	$	3,266,908	$	1,419,329

Amortization expense related to intangible assets totaled $159 and $2,494 during the three months ended May 31, 2013 and 2012, respectively. The decrease in amortization expense is primarily the result of some assets becoming fully amortized and Aspen Leaf Yogurt assets being sold. As of May 31, 2013 $476 net intangible assets subject to amortization remained to be amortized through FY 14.

NOTE 9 – RELATED PARTY TRANSACTIONS

The Company has entered into Franchise Agreements and a Development Agreement with a member of the Company’s Board of Directors. The Director operates two ALY locations under the Franchise Agreements and the Development Agreement. As of May 31, 2013, the Company had receivables of approximately $2,200 due from the Director associated with the director’s ownership and operation of the two current ALY locations.

U-Swirl, Inc. was owed $11,489 and $8,597 as of May 31, 2013 and February 28, 2013, respectively, from a U-Swirl franchise that is owned and operated by the grandchildren of the Company’s Chief Marketing Officer. The corporate secretary and treasurer of the franchise is also the Company’s corporate secretary.

As of May 31, 2013 and February 28, 2013, U-Swirl, Inc. had deferred revenue of $30,000 and $30,000, respectively, from an area developer in which the Company’s Chief Executive Officer and Chief Operating Officer have a minority interest.

10

 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Cautionary Note Regarding Forward-Looking Statements

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited financial statements and related notes of the Company included elsewhere in this report. The statements included in this report other than statements of historical fact, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, and include statements regarding our cash flow, dividends, operating income and future growth. Many of the forward-looking statements contained in this document may be identified by the use of forward-looking words such as "will," "believe," "expect," "anticipate," "estimate," and "potential," or similar expressions. Factors which could cause results to differ include, but are not limited to: changes in the confectionery business environment, seasonality, consumer interest in our products, general economic conditions, the success of U-Swirl, Inc., receptiveness of our products internationally, consumer trends, costs and availability of raw materials, competition, the success of our co-branding strategy and the effect of government regulations. Government regulations which we and our franchisees either are or may be subject to and which could cause results to differ from forward-looking statements include, but are not limited to: local, state and federal laws regarding health, sanitation, safety, building and fire codes, franchising, employment, manufacturing, packaging and distribution of food products and motor carriers. For a detailed discussion of the risks and uncertainties that may cause our actual results to differ from the forward-looking statements contained herein, please see the “Risk Factors” contained in our Annual Report on Form 10-K for the fiscal year ended February 28, 2013 which can be viewed at the SEC’s website at www.sec.gov or through our website at www.rmcf.com. These forward-looking statements apply only as of the date of this report. Readers are cautioned not to place undue reliance on the forward-looking statements in this Quarterly Report on Form 10-Q. Except as required by law, we are not obligated to release publicly any revisions to these forward-looking statements that might reflect events or circumstances occurring after the date of this report or those that might reflect the occurrence of unanticipated events.

Overview

We are a product-based international franchisor, confectionery manufacturer and retail operator. Our revenues and profitability are derived principally from our franchised system of retail stores that feature chocolate, frozen yogurt, and other confectionery products. We also sell our candy in selected locations outside our system of retail stores to build brand awareness. We own and operate sixteen retail units as a laboratory to test marketing, design and operational initiatives.

The most important factors in continued growth in our earnings are ongoing unit growth, increased same-store sales and increased same-store pounds purchased from the factory. Historically, unit growth has more than offset decreases in same-store sales and same-store pounds purchased.

Our ability to successfully achieve expansion of our Rocky Mountain Chocolate Factory franchise system depends on many factors not within our control, including the availability of suitable sites for new store establishment, the availability of adequate financing options and the availability of qualified franchisees to support such expansion.

Efforts to reverse the decline in same-store pounds purchased from the factory by franchised stores and to increase total factory sales depend on many factors, including new store openings, same-store sales, and the receptivity of our franchise system to our product introductions and promotional programs.

11

In January 2013, Ulysses Asset Acquisition, LLC (“Newco”), a wholly-owned subsidiary formed in the State of Colorado on January 2, 2013, entered into an agreement to acquire substantially all of the assets of YHI, Inc. and Yogurtini International, LLC (collectively, “Yogurtini”), which are the franchisors of self-serve frozen yogurt retail units branded as “Yogurtini.” In addition, we entered into two agreements to sell all of our membership interests in Newco and substantially all of our assets in Aspen Leaf Yogurt, LLC to U-Swirl, Inc., a publicly traded company (QTCQB: SWRL), in exchange for a 60% controlling equity interest in U-Swirl, Inc. Upon completion of these transactions, we ceased to operate any Company-owned Aspen Leaf Yogurt locations or sell and support franchise locations. We believe that the acquisition of 60% controlling interest in U-Swirl, Inc. will provide us with the ability to reverse operating losses incurred by the development and operation of Aspen Leaf Yogurt, LLC and provide an opportunity to continue to expand our presence in the self-serve frozen yogurt industry. Our ability to execute on this strategy is dependant upon continued expansion of the franchise network of U-Swirl, Inc. and the success of their franchisees.

In March 2013, we entered into a License Agreement covering the Kingdom of Saudi Arabia. Under the terms of the agreement, the licensee agreed to open and begin operating four (4) Rocky Mountain Chocolate Factory stores within 30 months following the execution of the agreement. The licensee has also been granted a 30-month option to convert its initial License Agreement into a Master License Agreement covering the entire country of Saudi Arabia. If the licensee chooses to exercise the option prior to its expiration date, the licensee will acquire the right to itself and/or through third-party franchisees to develop an additional six (6) Rocky Mountain Chocolate Factory stores in the Kingdom of Saudi Arabia.

In March 2013, we entered into a License Agreement covering South Korea. Under the terms of the agreement, the licensee agreed to open five (5) Rocky Mountain Chocolate Factory stores within 30 months following the execution of the agreement. The first Rocky Mountain Chocolate Factory store was opened in Seoul, South Korea in May 2013. The licensee has also been granted a 30-month option to convert its initial License Agreement into a Master License Agreement covering the entire country of South Korea. If the licensee chooses to exercise the option prior to its expiration date, the licensee will acquire the right to itself and/or through third-party franchisees to develop not less than 30 Rocky Mountain Chocolate Factory stores, inclusive of the five (5) stores developed under the terms of the initial License Agreement.

Results of Operations

Three Months Ended May 31, 2013 Compared to the Three Months Ended May 31, 2012

Basic earnings per share increased 11.8% from $.17 during the three months ended May 31, 2012 to $.19 during the three months ended May 31, 2013. Revenues increased by $519,700 in the three months ended May 31, 2013 compared to the three months ended May 31, 2012. This increase in revenues was due primarily to an increase in franchise related revenue, partially offset by a decline in factory sales resulting from a decrease in shipments of product to customers outside our network of franchised retail stores. Operating income increased 12.1% from $1.62 million for the three months ended May 31, 2012 to $1.82 million for the three months ended May 31, 2013. Net income increased 11.0% from $1.06 million in the three months ended May 31, 2012 to $1.18 million in the three months ended May 31, 2013. The increase in net income was due primarily to an income from operations related to frozen yogurt, compared with an operating loss in the same period of the prior year.

Revenues	Three Months Ended
	May 31,					$		%
($’s in thousands)	2013		2012		Change			Change
Factory sales	$	6,285.4	$	6,488.6	$	( 203.2	)		( 3.1	)%
Retail sales		1,893.3		1,602.0		291.3			18.2	%
Franchise fees		276.4		123.9		152.5			123.1	%
Royalty and marketing fees		1,722.8		1,443.7		279.1			19.3	%
Total	$	10,177.9	$	9,658.2	$	519.7			5.4	%

Factory Sales

The decrease in factory sales for the three months ended May 31, 2013 versus the three months ended May 31, 2012 was primarily due to a 9.6% decrease in shipments of product to customers outside our network of franchised retail stores and a 5.4% decrease in the average number of domestic Rocky Mountain Chocolate Factory franchised stores in operation. These decreases were partially offset by a 2.6% increase in same-store pounds purchased by our network of franchised stores.

Retail Sales

The increase in retail sales was primarily due to changes in units in operation, resulting from the acquisition of a majority ownership in U-Swirl, Inc. Same store sales at Company-owned stores increased 6.0% in the three months ended May 31, 2013 compared to the three months ended May 31, 2012.

12

Royalties, Marketing Fees and Franchise Fees

The increase in royalties and marketing fees from the three months ended May 31, 2012 to the three months ended May 31, 2013 resulted from a 16.9% increase in domestic franchise stores in operation from the three months ended May 31, 2012 to the three months ended May 31, 2013, primarily as a result of our acquisition of a majority ownership position in the U-Swirl franchise system. This increase was partially offset by a decrease in the number of domestic Rocky Mountain Chocolate Factory franchises in operation. The average number of domestic Rocky Mountain Chocolate Factory franchise stores in operation decreased from 239 in the three months ended May 31, 2012 to 226 during the three months ended May 31, 2013. Franchise fee revenues increased as a result of the license fees associated with the license agreements for the development and franchising of Rocky Mountain Chocolate Factory stores in South Korea and the Kingdom of Saudi Arabia. This increase was partially offset by a decrease in the number of domestic franchise store openings from two in the three months ended May 31, 2012 to one opening in the three months ended May 31, 2013.

Costs and Expenses	Three Months Ended
	May 31,							%
($’s in thousands)	2013		2012		Change			Change
Cost of sales – factory adjusted	$	4,377.2	$	4,432.2	$	(55.0	)		(1.2	)%
Cost of sales - retail		650.0		590.0		60.0			10.2	%
Franchise costs		478.8		544.4		(65.6	)		(12.0	)%
Sales and marketing		505.4		461.2		44.2			9.6	%
General and administrative		1,270.7		840.1		430.6			51.3	%
Retail operating		841.0		931.0		(90.0	)		(9.7	)%
Total	$	8,138.1	$	7,798.9	$	339.2			4.2	%

		Three Months Ended
Adjusted Gross margin		May 31,				$		%
		2013		2012		Change		Change
($’s in thousands)
Factory adjusted gross margin	$	1,908.2	$	2,056.4	$	(148.2	)	(7.2	)%
Retail		1,243.3		1,012.0		231.3		22.9	%
Total	$	3,151.5	$	3,068.4	$	83.1		2.7	%

	Three Months Ended
Adjusted Gross margin	May 31,				%		%
	2013		2012		Change		Change
(Percent)
Factory adjusted gross margin	30.4	%	31.7	%	(1.3	)%	(4.1	)%
Retail	65.7	%	63.2	%	2.5	%	4.0	%
Total	38.5	%	37.9	%	.6	%	1.6	%

13

Adjusted gross margin and factory adjusted gross margin are non-GAAP measures. Adjusted gross margin is equal to the sum of our factory adjusted gross margin plus our retail gross margin calculated in accordance with GAAP. Factory adjusted gross margin is equal to factory gross margin minus depreciation and amortization expense. We believe adjusted gross margin and factory adjusted gross margin are helpful in understanding our past performance as a supplement to gross margin, factory gross margin and other performance measures calculated in conformity with GAAP. We believe that adjusted gross margin and factory adjusted gross margin are useful to investors because they provide a measure of operating performance and our ability to generate cash that is unaffected by non-cash accounting measures. Additionally, we use adjusted gross margin and factory adjusted gross margin rather than gross margin and factory gross margin to make incremental pricing decisions. Adjusted gross margin and factory adjusted gross margin have limitations as analytical tools because they exclude the impact of depreciation and amortization expense and you should not consider it in isolation or as a substitute for any measure reported under GAAP. Our use of capital assets makes depreciation and amortization expense a necessary element of our costs and our ability to generate income. Due to these limitations, we use adjusted gross margin and factory adjusted gross margin as measures of performance only in conjunction with GAAP measures of performance such as gross margin and factory gross margin. The following table provides a reconciliation of factory adjusted gross margin to factory gross margin, the most comparable performance measure under GAAP:

	Three Months Ended
	May 31,
($’s in thousands)	2013		2012
Factory adjusted gross margin	$	1,908.2	$	2,056.4
Less: depreciation and amortization		71.9		70.4
Factory GAAP gross margin	$	1,836.3	$	1,986.0

Cost of Sales

Factory margins decreased 130 basis points in the three months ended May 31, 2013 compared to the three months ended May 31, 2012 due primarily to a decline in manufacturing efficiencies associated with 6.0% lower production volume in the three months ended May 31, 2013 compared to the three months ended May 31, 2012. The increase in Company-owned store margin is due primarily to an increase in U-Swirl units in operation and associated higher margins.

Franchise Costs

The decrease in franchise costs in the three months ended May 31, 2013 versus the three months ended May 31, 2012 is due primarily to a decrease in franchise development costs associated with Aspen Leaf Yogurt. As a percentage of total royalty and marketing fees and franchise fee revenue, franchise costs decreased to 23.9% in the three months ended May 31, 2013 from 34.7% in the three months ended May 31, 2012. This decrease as a percentage of royalty, marketing and franchise fees is primarily a result of lower franchise costs and higher franchise and royalty revenues.

Sales and Marketing

The increase in sales and marketing costs for the three months ended May 31, 2013 compared to the three months ended May 31, 2012 is primarily due to increased marketing-related compensation costs and an increase in marketing costs associated with U-Swirl, Inc. franchise locations.

General and Administrative

The increase in general and administrative costs for the three months ended May 31, 2013 compared to the three months ended May 31, 2012 is due primarily to the consolidation of U-Swirl, Inc. general and administrative costs and an increase in compensation related expenses. For the three months ended May 31, 2013, approximately $406,000 of U-Swirl, Inc. general and administrative costs were consolidated within our results, compared with no amount in the three months ended May 31, 2012. As a percentage of total revenues, general and administrative expenses increased to 12.5% in the three months ended May 31, 2013 compared to 8.7% in the three months ended May 31, 2012.

Retail Operating Expenses

The increase in retail operating expenses for the three months ended May 31, 2013 compared to the three months ended May 31, 2012 was due primarily to changes in units in operation, resulting from the acquisition of a majority ownership in U-Swirl, Inc. Retail operating expenses, as a percentage of retail sales, decreased from 58.1% in the three months ended May 31, 2012 to 44.4% in the three months ended May 31, 2013.

Depreciation and Amortization

Depreciation and amortization of $236,000 in the three months ended May 31, 2013 declined $1,000 from $237,000 incurred in the three months ended May 31, 2012, due to certain intangible assets becoming fully amortized.

Interest Income

Interest income of $11,700 realized in the three months ended May 31, 2013 represents an increase of $400 from the $11,300 realized in the three months ended May 31, 2012.

14

Income Tax Expense

Our effective income tax rate for the three months ended May 31, 2013 was 31.9%, compared to 35.0% for the three months ended May 31, 2012. The decrease of 3.1% was primarily the result of the consolidation of the U-Swirl, Inc. net operating income. There was no income tax expense recognized on U-Swirl, Inc. income before income taxes for the three months ended May 31, 2013. U-Swirl, Inc. has significant net operating loss carryovers. In accordance with section 382 of the Internal Revenue Code, deductibility of U-Swirl, Inc.’s U.S. net operating loss carryovers may be subject to annual limitation in the event of a change in control. We have performed a preliminary evaluation as to whether a change in control has taken place, and have concluded that there was a change of control with respect to the net operating losses of U-Swirl, Inc. when the Company acquired its 60% ownership interest in January 2013. Our effective income tax rate may increase in future periods, or for the full year as a result of estimates related to the income tax liability arising from the income before income taxes of U-Swirl, Inc.

Liquidity and Capital Resources

As of May 31, 2013, working capital was $9.8 million, compared with $9.0 million as of February 28, 2013, an increase of $800,000. The increase in working capital was primarily due to positive operating results.

Cash and cash equivalent balances increased $50,000 from $5.32 million as of February 28, 2013 to $5.37 million as of May 31, 2013 as a result of cash flow generated by operating activities being mostly offset by cash flows used by financing and investing activities. Our current ratio was 3.2 to 1 at May 31, 2013 in comparison with 2.6 to 1 at February 28, 2013. We monitor current and anticipated future levels of cash and cash equivalents in relation to anticipated operating, financing and investing requirements.

We have a $5.0 million ($5.0 million available as of May 31, 2013) working capital line of credit collateralized by substantially all of our assets with the exception of our retail store assets. Additionally, the line of credit is subject to various financial ratio and leverage covenants. As of May 31, 2013, we were in compliance with all such covenants.The line is subject to renewal on July 31, 2013. As of May 31, 2013, no amount was outstanding under this line of credit.

We believe cash flows generated by operating activities and available financing will be sufficient to fund our operations at least through the end of fiscal 2014.

Off-Balance Sheet Arrangements

As of May 31, 2013 we had no off-balance sheet arrangements or obligations.

Impact of Inflation

Inflationary factors such as increases in the costs of ingredients and labor directly affect our operations. Most of our leases provide for cost-of-living adjustments and require us to pay taxes, insurance and maintenance expenses, all of which are subject to inflation. Additionally, our future lease costs for new facilities may include potentially escalating costs of real estate and construction. There is no assurance that we will be able to pass on increased costs to our customers.

Depreciation expense is based on the historical cost to us of fixed assets, and is therefore potentially less than it would be if it were based on current replacement cost. While property and equipment acquired in prior years will ultimately have to be replaced at higher prices, it is expected that replacement will be a gradual process over many years.

Seasonality

We are subject to seasonal fluctuations in sales, which cause fluctuations in quarterly results of operations. Historically, the strongest sales of our confectionary products have occurred during the Christmas holiday through Mother’s Day. We believe the strongest sales of frozen yogurt products will occur during the summer months. In addition, quarterly results have been, and in the future are likely to be, affected by the timing of new store openings and sales of franchises. Because of the seasonality of our business and the impact of new store openings and sales of franchises, results for any quarter are not necessarily indicative of results that may be achieved in other quarters or for a full fiscal year.

15

Item 3.     Quantitative and Qualitative Disclosures about Market Risk

We do not engage in commodity futures trading or hedging activities and do not enter into derivative financial instrument transactions for trading or other speculative purposes. We also do not engage in transactions in foreign currencies or in interest rate swap transactions that could expose us to market risk. However, we are exposed to some commodity price and interest rate risks.

We frequently enter into purchase contracts of between six to eighteen months for chocolate and certain nuts. These contracts permit us to purchase the specified commodity at a fixed price on an as-needed basis during the term of the contract. Because prices for these products may fluctuate, we may benefit if prices rise during the terms of these contracts, but we may be required to pay above-market prices if prices fall and we are unable to renegotiate the terms of the contract. As of May 31, 2013, based on future contractual obligations for chocolate products, we estimate that a 10.0% change in the prices of cocoa would result in an $170,000 favorable or unfavorable price benefit resulting from our contracts.

We have a $5.0 million bank line of credit that bears interest at a variable rate. As of May 31, 2013, no amount was outstanding under the line of credit. We do not believe that we are exposed to any material interest rate risk related to this credit facility.

Item 4.     Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”)) that are designed to ensure that material information relating to us is made known to the officers who certify as to our financial reports and to other members of senior management and the Board of Directors. These disclosure controls and procedures are designed to ensure that information required to be disclosed in our reports that are filed or submitted under the Exchange Act, are recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Management, with the participation of our CEO and CFO, has evaluated the effectiveness, as of May 31, 2013, of our disclosure controls and procedures. We acquired a 60% controlling interest in U-Swirl, Inc. in January 2013 and U-Swirl’s operations are consolidated into our unaudited financial statements included in this report.  As such, the scope of our assessment of the effectiveness of our disclosure controls and procedures did not include the internal controls over financial reporting at U-Swirl.  This exclusion is consistent with the SEC’s guidance that an assessment of a recently acquired business may be omitted from the scope of our assessment of the effectiveness of disclosure controls and procedures that are also part of internal control over financial reporting in the year of acquisition.  Based on that evaluation, our CEO and CFO have concluded that our disclosure controls and procedures were effective as of May 31, 2013.

Changes in Internal Control over Financial Reporting

As a result of the acquisition of U-Swirl, Inc. in January 2013, the Company is evaluating and implementing changes to processes, policies and other components of its internal control over financial reporting with respect to the consolidation of U-Swirl’s operations into the Company’s financial statements. Management continues to be engaged in substantial efforts to evaluate the effectiveness of our internal control procedures and the design of those control procedures relating to U-Swirl. Except for the activities described above, there were no changes in the Company’s internal control over financial reporting that occurred during the quarter ended May 31, 2013 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

16

PART II.     OTHER INFORMATION

Item 1.       Legal Proceedings

We are not currently involved in any material legal proceedings other than routine litigation incidental to our business.

Item 1A.     Risk Factors

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in Part 1, “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended February 28, 2013. There have been no material changes in our risk factors from those disclosed in our Annual Report on Form 10-K for the fiscal year ended February 28, 2013.

17

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3.     Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5.     Other Information

None.

Item 6.     Exhibits

3.1 Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Annual Report on Form 10-K of the Registrant for the year ended February 28, 2009)

3.2 Articles of Amendment to Articles of Incorporation (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of the Registrant filed on May 22, 2009)

3.3 Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K of the Registrant filed on December 14, 2007)

31.1* Certification of Chief Executive Officer Filed Pursuant To Section 302 Of The Sarbanes-Oxley Act of 2002

31.2* Certification of Chief Financial Officer Filed Pursuant To Section 302 Of The Sarbanes-Oxley Act of 2002

32.1** Certification of Chief Executive Officer Furnished Pursuant To Section 906 of The Sarbanes-Oxley Act of 2002

32.2** Certification of Chief Financial Officer Furnished Pursuant To Section 906 of The Sarbanes-Oxley Act of 2002

101.INS ****XBRL Instance Document

101.SCH ****XBRL Taxonomy Extension Schema Document

101.CAL ****XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF ****XBRL Taxonomy Extension Definition Linkbase Document

101.LAB ****XBRL Taxonomy Extension Label Linkbase Document

101.PRE ****XBRL Taxonomy Extension Presentation Linkbase Document

____________________________

* Filed herewith.

** Furnished herewith.

****Furnished with this report. In accordance with Rule 406T of Regulation S-T, the XBRL-related information in Exhibit 101 to this Quarterly Report on Form 10-Q shall be deemed “furnished” and not “filed” or part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

18

Signature

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	ROCKY MOUNTAIN CHOCOLATE FACTORY, INC.
	(Registrant)
Date: July 15, 2013		/s/ Bryan J. Merryman
		Bryan J. Merryman, Chief Operating Officer,
		Chief Financial Officer, Treasurer and Director

19

EX-31

Exhibit 31.1

Certification Pursuant To Section 302 Of The Sarbanes-Oxley Act of 2002

I, Franklin E. Crail, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Rocky Mountain Chocolate Factory, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: July 15, 2013	/s/ Franklin E. Crail
	Franklin E. Crail, President, Chief Executive Officer and Chairman of the Board of Directors

EX-31

Exhibit 31.2

Certification Pursuant To Section 302 Of The Sarbanes-Oxley Act of 2002

I, Bryan J. Merryman, certify that:

1. I have reviewed this quarterly report on Form 10-Q of Rocky Mountain Chocolate Factory, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f))for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: July 15, 2013	/s/ Bryan J. Merryman
	Bryan J. Merryman, Chief Operating Officer, Chief Financial Officer, Treasurer and Director

EX-32

Exhibit 32.1

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the Quarterly Report of Rocky Mountain Chocolate Factory, Inc. (the "Company") on Form 10-Q for the quarterly period ended May 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned officer of the Company certifies, in his capacity as such, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: July 15, 2013	By	/s/ Bryan J. Merryman
		Bryan J. Merryman, Chief Operating Officer, Chief Financial Officer, Treasurer and Director

EX-32

Exhibit 32.2

CERTIFICATION PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

(18 U.S.C. SECTION 1350)

In connection with the Quarterly Report of Rocky Mountain Chocolate Factory, Inc. (the "Company") on Form 10-Q for the quarterly period ended May 31, 2013 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned officer of the Company certifies, in his capacity as such, pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: July 15, 2013	By	/s/ Bryan J. Merryman
		Bryan J. Merryman, Chief Operating Officer, Chief Financial Officer, Treasurer and Director

XML

Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Tables)

3 Months Ended

May 31, 2013

Disclosure Text Block [Abstract]

Number Of Stores [Table Text Block]

	Sold, Not Yet Open		Open		Total
Rocky Mountain Chocolate Factory
Company-owned stores		-		7		7
Franchise stores – Domestic stores		4		218		222
Franchise stores – Domestic kiosks		-		6		6
Franchise units – International		1		67		68
Cold Stone Creamery – co-branded		2		56		58
U-Swirl, Inc. Stores (Including Yogurtini and Aspen Leaf Yogurt)
Company-owned stores		-		14		14
Franchise stores – Domestic stores		4		57		61
Total		11		425		436

Schedule of Share-based Compensation, Stock Options, Activity [Table Text Block]

	Three Months Ended
	May 31,
	2013			2012
Outstanding stock options as of February 28 or 29:		270,945			307,088
Granted		-			-
Exercised		-			-
Cancelled/forfeited		(88,725	)		(14,952	)
Outstanding stock options as of May 31:		182,220			292,136
Weighted average exercise price	$	7.93		$	10.64
Weighted average remaining contractual term (in years)		1.17			2.57

Schedule of Share-based Compensation, Restricted Stock Units Award Activity [Table Text Block]

	Three Months Ended
	May 31,
	2013			2012
Outstanding non-vested restricted stock units as of February 28 or 29:		57,030			101,980
Granted		280,900			-
Vested		(7,820	)		(10,420	)
Cancelled/forfeited		-			(560	)
Outstanding non-vested restricted stock units as of May 31:		330,110			91,000
Weighted average grant date fair value	$	11.78		$	9.15
Weighted average remaining vesting period (in years)		5.17			1.61

XML

Consolidated Balance Sheets (Current Period Unaudited) (USD $)	May 31, 2013	Feb. 28, 2013
Current Assets
Cash and cash equivalents	$ 5,372,448	$ 5,321,696
Accounts receivable, less allowance for doubtful accounts of $634,146 and $507,806, respectively	3,413,367	3,916,320
Notes receivable, current portion, less current portion of the valuation allowance of $10,382 and $10,382, respectively	240,516	197,078
Inventories, less reserve for obsolete inventory of $255,527 and $253,148, respectively	4,174,348	4,221,036
Deferred income taxes	643,748	628,633
Other	417,451	259,170
Total current assets	14,261,878	14,543,933
Property and Equipment, Net	6,628,690	6,777,143
Other Assets
Notes receivable, less current portion and valuation allowance of $37,400 and $37,400, respectively	517,750	469,362
Goodwill, net	1,046,944	1,046,944
Franchise rights	800,000	800,000
Intangible assets, net	476	635
Other	214,976	195,928
Total other assets	2,580,146	2,512,869
Total Assets	23,470,714	23,833,945
Current Liabilities
Accounts payable	1,246,141	1,998,897
Accrued salaries and wages	512,289	1,184,739
Other accrued expenses	1,550,763	1,294,487
Dividend payable	668,832	667,532
Deferred income	475,179	417,484
Total current liabilities	4,453,204	5,563,139
Deferred Income Taxes	859,385	881,694
Commitments and Contingencies	0	0
Stockholders’ Equity
Preferred stock, $.10 par value; 250,000 authorized; 0 shares issued and outstanding Series A Junior Participating Preferred Stock, authorized 50,000 shares	0	0
Undesignated series, authorized 200,000 shares	0	0
Common stock, $.03 par value, 100,000,000 shares authorized,6,080,290 and 6,068,470 issued and outstanding, respectively	182,409	182,054
Additional paid-in capital	7,722,171	7,559,442
Retained earnings	9,152,568	8,642,093
Non-controlling interest in equity of subsidiary	1,100,977	1,005,523
Total stockholders’ equity	18,158,125	17,389,112
Total Liabilities and Stockholders’ Equity	23,470,714	23,833,945
Undesignated Series [Member]
Stockholders’ Equity
Preferred stock, $.10 par value; 250,000 authorized; 0 shares issued and outstanding Series A Junior Participating Preferred Stock, authorized 50,000 shares	0	0
Undesignated series, authorized 200,000 shares	$ 0	$ 0

XML

Note 4 - Property and Equipment, Net

3 Months Ended

May 31, 2013

Property, Plant and Equipment Disclosure [Text Block]

Property, Plant and Equipment Disclosure [Text Block]

NOTE 4 - PROPERTY AND EQUIPMENT, NET

Property and equipment at May 31, 2013 and February 28, 2013 consists of the following:

	May 31, 2013		February 28, 2013
Land	$	513,618	$	513,618
Building		4,777,476		4,764,005
Machinery and equipment		8,923,060		8,864,126
Furniture and fixtures		1,033,254		1,024,261
Leasehold improvements		1,930,991		1,930,991
Transportation equipment		392,755		392,755
		17,571,154	$	17,489,756
Less accumulated depreciation		10,942,464		10,712,613
Property and equipment net	$	6,628,690	$	6,777,143

XML

Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores	May 31, 2013
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Number of Stores	436
Rocky Mountain Chocolate Factory [Member] | Company-Owned Stores [Member] | Open [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Number of Stores	7
Rocky Mountain Chocolate Factory [Member] | Company-Owned Stores [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Number of Stores	7
Rocky Mountain Chocolate Factory [Member] | Franchise Stores - Domestic Stores [Member] | Sold, Not Yet Open [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Number of Stores	4
Rocky Mountain Chocolate Factory [Member] | Franchise Stores - Domestic Stores [Member] | Open [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Number of Stores	218
Rocky Mountain Chocolate Factory [Member] | Franchise Stores - Domestic Stores [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Number of Stores	222
Rocky Mountain Chocolate Factory [Member] | Franchise Stores - Domestic Kiosks [Member] | Open [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Number of Stores	6
Rocky Mountain Chocolate Factory [Member] | Franchise Stores - Domestic Kiosks [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Number of Stores	6
Rocky Mountain Chocolate Factory [Member] | Franchise Units - International [Member] | Sold, Not Yet Open [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Number of Stores	1
Rocky Mountain Chocolate Factory [Member] | Franchise Units - International [Member] | Open [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Number of Stores	67
Rocky Mountain Chocolate Factory [Member] | Franchise Units - International [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Number of Stores	68
Rocky Mountain Chocolate Factory [Member] | Cold Stone Creamery - Co-Branded [Member] | Sold, Not Yet Open [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Number of Stores	2
Rocky Mountain Chocolate Factory [Member] | Cold Stone Creamery - Co-Branded [Member] | Open [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Number of Stores	56
Rocky Mountain Chocolate Factory [Member] | Cold Stone Creamery - Co-Branded [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Number of Stores	58
U-Swirl, Inc. [Member] | Company-Owned Stores [Member] | Open [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Number of Stores	14
U-Swirl, Inc. [Member] | Company-Owned Stores [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Number of Stores	14
U-Swirl, Inc. [Member] | Franchise Stores - Domestic Stores [Member] | Sold, Not Yet Open [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Number of Stores	4
U-Swirl, Inc. [Member] | Franchise Stores - Domestic Stores [Member] | Open [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Number of Stores	57
U-Swirl, Inc. [Member] | Franchise Stores - Domestic Stores [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Number of Stores	61
Sold, Not Yet Open [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Number of Stores	11
Open [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Number of Stores [Line Items]
Number of Stores	425

XML

Note 3 - Inventories (Tables)

3 Months Ended

May 31, 2013

Inventory Disclosure [Text Block]

Schedule of Inventory, Current [Table Text Block]

	May 31, 2013		February 28, 2013
Ingredients and supplies	$	2,734,069	$	2,531,559
Finished candy		1,338,297		1,590,966
U-Swirl, Inc. food and packaging		101,982		98,511
Total inventories	$	4,174,348	$	4,221,036

XML

Note 2 - Earnings Per Share (Details)	3 Months Ended
	May 31, 2013	May 31, 2012
Earnings Per Share [Text Block]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount	101,661	105,236

XML

Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Summary of Non-Vested Restricted Stock Unit Transactions for Common Stock (Restricted Stock [Member], USD $)	3 Months Ended
	May 31, 2013	May 31, 2012
Restricted Stock [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Summary of Non-Vested Restricted Stock Unit Transactions for Common Stock [Line Items]
Outstanding non-vested restricted stock units	57,030	101,980
Weighted average grant date fair value (in Dollars per share)	$ 11.78	$ 9.15
Weighted average remaining vesting period (in years)	5 years 62 days	1 year 222 days
Granted	280,900
Vested	(7,820)	(10,420)
Cancelled/forfeited		(560)
Outstanding non-vested restricted stock units	330,110	91,000

XML

Note 8 - Goodwill and Intangible Assets (Details) (USD $)	3 Months Ended
	May 31, 2013	May 31, 2012
Goodwill and Intangible Assets Disclosure [Text Block]
Amortization	$ 159	$ 2,494
Finite-Lived Intangible Assets, Net	$ 476

XML

Note 6 - Supplemental Cash Flow Information (Details) - Supplemental Cash Flow Information (USD $)	3 Months Ended
	May 31, 2013	May 31, 2012
Supplemental Cash Flow Information [Abstract]
Interest	$ (8,606)	$ (11,192)
Income taxes	594,336	52,780
Non-Cash Operating Activities Accrued Inventory	215,703	243,605
Non-Cash Financing Activities Dividend payable	668,832	675,731
Accrued Capital Expenditures		$ 47,216

XML

Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) - Summary of Stock Option Transactions for Common Stock (USD $)	3 Months Ended
	May 31, 2013	May 31, 2012
Summary of Stock Option Transactions for Common Stock [Abstract]
Outstanding Stock Options	270,945	307,088
Weighted average exercise price (in Dollars per share)	$ 7.93	$ 10.64
Weighted average remaining contractual term (in years)	1 year 62 days	2 years 208 days
Cancelled/forfeited	(88,725)	(14,952)
Outstanding Stock Options	182,220	292,136

XML

Consolidated Statements of Cash Flows (Unaudited) (USD $)	3 Months Ended
	May 31, 2013	May 31, 2012
Cash Flows From Operating Activities
Net income	$ 1,179,307	$ 1,062,329
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	235,756	237,140
Provision for loss on accounts and notes receivable	70,709	88,000
Provision for obsolete inventory		15,000
Gain on sale of property and equipment	(2,600)
Expense recorded for stock compensation	142,808	135,033
Deferred income taxes	(37,424)	(68,829)
Changes in operating assets and liabilities:
Accounts receivable	446,607	509,779
Inventories	262,391	604,183
Other current assets	(158,610)	(185,437)
Accounts payable	(968,459)	(591,728)
Accrued liabilities	(416,174)	335,572
Deferred income	57,695	(10,500)
Net cash provided by operating activities	812,006	2,130,542
Cash Flows From Investing Activities
Addition to notes receivable	(153,893)	(37,351)
Proceeds received on notes receivable	47,704	61,176
Proceeds from sale or distribution of assets	2,600
Purchases of property and equipment	(57,795)	(252,852)
Other	47,386	(2,565)
Net cash used in investing activities	(113,998)	(231,592)
Cash Flows From Financing Activities
Repurchase of common stock		(362,680)
Tax benefit of stock awards	20,276	5,740
Dividends paid	(667,532)	(616,239)
Net cash used in financing activities	(647,256)	(973,179)
Net Increase in Cash and Cash Equivalents	50,752	925,771
Cash and Cash Equivalents, Beginning of Period	5,321,696	4,125,444
Cash and Cash Equivalents, End of Period	$ 5,372,448	$ 5,051,215

XML

Note 2 - Earnings Per Share

3 Months Ended

May 31, 2013

Earnings Per Share [Text Block]

Earnings Per Share [Text Block]

NOTE 2 - EARNINGS PER SHARE

Basic earnings per share is calculated using the weighted-average number of common shares outstanding. Diluted earnings per share reflects the potential dilution that could occur from common shares issuable through stock options and restricted stock units. For the three months ended May 31, 2013 and 2012, 101,661 and 105,236 stock options were excluded, respectively, from the computation of earnings per share because their effect would have been anti-dilutive.

XML

Note 5 - Stockholders' Equity

3 Months Ended

May 31, 2013

Stockholders' Equity Note Disclosure [Text Block]

Stockholders' Equity Note Disclosure [Text Block]

NOTE 5 - STOCKHOLDERS’ EQUITY

Stock Repurchases

On February 19, 2008, the Company announced the plan to purchase up to $3.0 million of its common stock in the open market or in private transactions, whenever deemed appropriate by management. During the three months ended May 31, 2012, the Company repurchased 33,800 shares under the plan at an average price of $10.73 per share. The Company did not repurchase any shares during the three months ended May 31, 2013.

Cash Dividend

The Company paid a quarterly cash dividend of $0.11 per share of common stock on March 15, 2013 to shareholders of record on March 1, 2013. The Company declared a quarterly cash dividend of $0.11 per share of common stock on May 23, 2013 payable on June 14, 2013 to shareholders of record on June 4, 2013.

Future declaration of dividends will depend on, among other things, the Company's results of operations, capital requirements, financial condition and on such other factors as the Company's Board of Directors may in its discretion consider relevant and in the best long term interest of the shareholders.

XML

Note 3 - Inventories

3 Months Ended

May 31, 2013

Inventory Disclosure [Text Block]

Inventory Disclosure [Text Block]

NOTE 3 – INVENTORIES

The Company held the following inventory at May 31, 2013 and February 28, 2013:

	May 31, 2013		February 28, 2013
Ingredients and supplies	$	2,734,069	$	2,531,559
Finished candy		1,338,297		1,590,966
U-Swirl, Inc. food and packaging		101,982		98,511
Total inventories	$	4,174,348	$	4,221,036

XML

Note 3 - Inventories (Details) - Inventories (USD $)	May 31, 2013	Feb. 28, 2013
Inventories [Abstract]
Ingredients and supplies	$ 2,734,069	$ 2,531,559
Finished candy	1,338,297	1,590,966
U-Swirl, Inc. food and packaging	101,982	98,511
Total inventories	$ 4,174,348	$ 4,221,036

XML

Note 7 - Operating Segments (Details) (USD $)	3 Months Ended			15 Months Ended
	May 31, 2013	May 31, 2012	May 31, 2013 Major Customer (Member)	May 31, 2013 Major Customer (Member)
Note 7 - Operating Segments (Details) [Line Items]
Number of Reportable Segments	5
Numbers Of Major Customers	1
Revenues (in Dollars)	$ 10,177,862	$ 9,658,193	$ 1,800,000	$ 2,100,000

XML

Consolidated Statements of Income (unaudited) (Parentheticals) (USD $)	3 Months Ended
	May 31, 2013	May 31, 2012
Cost of sales, depreciation and amortization	$ 71,870	$ 70,395

XML

Note 8 - Goodwill and Intangible Assets

3 Months Ended

May 31, 2013

Goodwill and Intangible Assets Disclosure [Text Block]

Goodwill and Intangible Assets Disclosure [Text Block]

NOTE 8 – GOODWILL AND INTANGIBLE ASSETS

Intangible assets at May 31, 2013 and February 28, 2013 consist of the following:

				May 31, 2013				February 28, 2013
	Amortization Period (Years)			Gross Carrying Value		Accumulated Amortization		Gross Carrying Value		Accumulated Amortization
Intangible assets subject to amortization
Store design		10		$	205,777	$	205,301	$	205,777	$	205,142
Packaging licenses	3	-	5		120,830		120,830		120,830		120,830
Packaging design		10			430,973		430,973		430,973		430,973
Total					757,580		757,104		757,580		756,945
Intangible assets not subject to amortization
Franchising segment-
Company stores goodwill					1,099,328		267,020		1,099,328		267,020
Franchising goodwill					295,000		197,682		295,000		197,682
Manufacturing segment-Goodwill					295,000		197,682		295,000		197,682
Trademark					20,000		-		20,000		-
Total Goodwill					1,709,328		662,384		1,709,328		662,384
Franchise Rights					800,000		-		800,000		-
Total intangible assets				$	3,266,908	$	1,419,488	$	3,266,908	$	1,419,329

Amortization expense related to intangible assets totaled $159 and $2,494 during the three months ended May 31, 2013 and 2012, respectively. The decrease in amortization expense is primarily the result of some assets becoming fully amortized and Aspen Leaf Yogurt assets being sold. As of May 31, 2013 $476 net intangible assets subject to amortization remained to be amortized through FY 14.

XML

Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) (USD $)	May 31, 2013	Feb. 28, 2013
Accounts receivable, allowance for doubtful accounts (in Dollars)	$ 634,146	$ 507,806
Current portion of the valuation allowance (in Dollars)	10,382	10,382
Inventories, reserve (in Dollars)	255,527	253,148
Notes receivable, valuation allowance (in Dollars)	$ 37,400	$ 37,400
Preferred stock, par value (in Dollars per share)	$ 0.10	$ 0.10
Preferred Stock, Authorized	250,000	250,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in Dollars per share)	$ 0.03	$ 0.03
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	6,080,290	6,068,470
Common stock, shares outstanding	6,080,290	6,068,470
Series A Preferred Stock [Member]
Preferred Stock, Authorized	50,000	50,000
Undesignated Series [Member]
Undesignated series, authorized shares	200,000	200,000

XML

Consolidated Statements of Income (unaudited) (USD $)	3 Months Ended
	May 31, 2013	May 31, 2012
Revenues
Sales	$ 8,178,689	$ 8,090,626
Franchise and royalty fees	1,999,173	1,567,567
Total revenues	10,177,862	9,658,193
Costs and Expenses
Cost of sales, exclusive of depreciation and amortization expense of $71,870 and $70,395, respectively	5,027,164	5,022,236
Franchise costs	478,810	544,426
Sales and marketing	505,437	461,182
General and administrative	1,270,704	840,096
Retail operating	840,962	931,013
Depreciation and amortization	235,756	237,140
Total costs and expenses	8,358,833	8,036,093
Income from Operations	1,819,029	1,622,100
Interest Income	11,664	11,294
Income Before Income Taxes	1,830,693	1,633,394
Income Tax Provision	584,154	571,065
Consolidated Net Income	1,246,539	1,062,329
Less: Net (loss) income attributable to non-controlling interest	67,232
Net Income attributable to RMCF	$ 1,179,307	$ 1,062,329
Basic Earnings per Common Share (in Dollars per share)	$ 0.19	$ 0.17
Diluted Earnings per Common Share (in Dollars per share)	$ 0.19	$ 0.17
Weighted Average Common Shares Outstanding (in Shares)	6,074,332	6,159,445
Dilutive Effect of Stock Options (in Shares)	237,416	151,317
Weighted Average Common Shares Outstanding, Assuming Dilution (in Shares)	6,311,748	6,310,762

XML

Note 4 - Property and Equipment, Net (Details) - Property and Equipment (USD $)	May 31, 2013	Feb. 28, 2013
Property and Equipment [Abstract]
Land	$ 513,618	$ 513,618
Building	4,777,476	4,764,005
Machinery and equipment	8,923,060	8,864,126
Furniture and fixtures	1,033,254	1,024,261
Leasehold improvements	1,930,991	1,930,991
Transportation equipment	392,755	392,755
	17,571,154	17,489,756
Less accumulated depreciation	10,942,464	10,712,613
Property and equipment net	$ 6,628,690	$ 6,777,143

XML

Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) (USD $)	3 Months Ended
	May 31, 2013	May 31, 2012
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items]
Equity Method Investment, Ownership Percentage	60.00%
Number of Operating Segments	3
Stock Issued During Period, Shares, Share-based Compensation, Gross (in Shares)	4,000	4,000
Stock Issued During Period, Value, Share-based Compensation, Gross	$ 48,400	$ 37,200
Share-based Compensation	142,808	135,033
Restricted Stock Units (RSUs) [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items]
Share-based Compensation	94,408
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	5 years
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized	3,609,515
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition	5 years 73 days
Stock Issued During Period, Shares, Restricted Stock Award, Gross (in Shares)	280,900
Stock Issued During Period, Value, Restricted Stock Award, Gross	$ 3,437,950
Shares Issued, Price Per Share (in Dollars per share)	$ 12.24
Restricted Stock Units (RSUs) [Member] | Maximum [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage	20.00%
Restricted Stock Units (RSUs) [Member] | Minimum [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Rights, Percentage	17.00%
Maximum [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	6 years
Minimum [Member]
Note 1 - Nature of Operations and Summary of Significant Accounting Policies (Details) [Line Items]
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period	5 years

XML

Note 8 - Goodwill and Intangible Assets (Details) - Indefinite-Lived Intangible Assets (USD $)																	3 Months Ended
	May 31, 2013	Feb. 28, 2013	May 31, 2013 Company Stores Goodwill [Member]	Feb. 28, 2013 Company Stores Goodwill [Member]	May 31, 2013 Franchising Goodwill [Member]	Feb. 28, 2013 Franchising Goodwill [Member]	May 31, 2013 Manufacturing Segment-Goodwill [Member]	Feb. 28, 2013 Manufacturing Segment-Goodwill [Member]	May 31, 2013 Trademarks [Member]	Feb. 28, 2013 Trademarks [Member]	May 31, 2013 Store Design [Member]	Feb. 28, 2013 Store Design [Member]	May 31, 2013 Packaging Licenses [Member]	Feb. 28, 2013 Packaging Licenses [Member]	May 31, 2013 Packaging Design [Member]	Feb. 28, 2013 Packaging Design [Member]	Feb. 28, 2013 Minimum [Member] Packaging Licenses [Member]	Feb. 28, 2013 Maximum [Member] Packaging Licenses [Member]
Intangible assets subject to amortization
Amortization Period (Years) - Minimum																	3 years	5 years
Amortization Period (Years) - Maximum																	3 years	5 years
Gross Carry Value	$ 757,580	$ 757,580									$ 205,777	$ 205,777	$ 120,830	$ 120,830	$ 430,973	$ 430,973
Accumulated Amortization	757,104	756,945									205,301	205,142	120,830	120,830	430,973	430,973
Franchising segment-
Gross Carry Value	1,709,328	1,709,328	1,099,328	1,099,328	295,000	295,000	295,000	295,000	20,000	20,000
Accumulated Amortization	662,384	662,384	267,020	267,020	197,682	197,682	197,682	197,682
Franchise Rights	800,000	800,000
Total intangible assets	3,266,908	3,266,908
Total intangible assets	$ 1,419,488	$ 1,419,329

XML

Note 9 - Related Party Transactions (Details) (USD $)	May 31, 2013	Feb. 28, 2013
Note 9 - Related Party Transactions (Details) [Line Items]
Accounts Receivable, Related Parties	$ 2,200
Due from Related Parties	11,489
Deferred Revenue		30,000
U-Swirl, Inc. [Member]
Note 9 - Related Party Transactions (Details) [Line Items]
Due from Related Parties		8,597
Deferred Revenue	$ 30,000

XML

Note 7 - Operating Segments

3 Months Ended

May 31, 2013

Segment Reporting Disclosure [Text Block]

Segment Reporting Disclosure [Text Block]

NOTE 7 - OPERATING SEGMENTS

The Company classifies its business interests into five reportable segments: Franchising, Manufacturing, Retail Stores, U-Swirl, Inc. operations and Other. The accounting policies of the segments are the same as those described in the summary of significant accounting policies in Note 1 to these consolidated financial statements and Note 1 to the Company’s financial statements included in the Company’s Annual Report on Form 10-K for the year ended February 28, 2013. The Company evaluates performance and allocates resources based on operating contribution, which excludes unallocatedcorporate general and administrative costs and income tax expense or benefit. The Company’s reportable segments are strategic businesses that utilize common merchandising, distribution, and marketing functions, as well as common information systems and corporate administration. All inter-segment sales prices are market based. Each segment is managed separately because of the differences in required infrastructure and the difference in products and services:

Three Months Ended May 31, 2013	Franchising		Manufacturing			Retail			U-Swirl, Inc.		Other			Total
Total revenues	$	1,660,016	$	6,726,056		$	515,138		$	1,717,406	$	-		$	10,618,616
Intersegment revenues		-		(440,754	)		-			-		-			(440,754	)
Revenue from external customers		1,660,016		6,285,302			515,138			1,717,406		-			10,177,862
Segment profit (loss)		848,444		1,748,467			(44,859	)		168,079		(889,438	)		1,830,693
Total assets		1,334,534		10,035,858			1,277,606			3,357,523		7,465,193			23,470,714
Capital expenditures		8,451		31,481			5,611			-		12,252			57,795
Total depreciation & amortization		8,593		72,373			14,740			105,578		34,472			235,756

Three Months Ended May 31, 2012	Franchising		Manufacturing			Retail		U-Swirl, Inc.		Other			Total
Total revenues	$	1,567,567	$	6,956,432		$	1,677,281	$	-	$	-		$	10,201,280
Intersegment revenues		-		(543,087	)		-		-		-			(543,087	)
Revenue from external customers		1,567,567		6,413,345			1,677,281		-		-			9,658,193
Segment profit (loss)		668,935		1,818,267			12,635		-		(866,443	)		1,633,394
Total assets		1,463,906		9,594,086			5,158,282		-		7,460,317			23,676,591
Capital expenditures		7,539		52,422			160,859		-		32,032			252,852
Total depreciation & amortization		11,380		71,337			116,781		-		37,642			237,140

Revenue from one customer of the Company’s Manufacturing segment represented approximately $1.8 million of the Company’s revenues from external customers during the three months ended May 31, 2013 compared to $2.1 million during the three months ended May 31, 2012.

XML

Note 5 - Stockholders' Equity (Details) (USD $) In Millions, except Share data, unless otherwise specified	0 Months Ended		3 Months Ended	63 Months Ended
	May 23, 2013	Mar. 15, 2013	May 31, 2012	May 31, 2013
Stockholders' Equity Note Disclosure [Text Block]
Stock Repurchase Program, Authorized Amount (in Dollars)				$ 3.0
Stock Repurchased During Period, Shares (in Shares)			33,800
Treasury Stock Acquired, Average Cost Per Share			$ 10.73
Common Stock, Dividends, Per Share, Cash Paid		$ 0.11
Common Stock, Dividends, Per Share, Declared	$ 0.11

XML

Accounting Policies, by Policy (Policies)

3 Months Ended

May 31, 2013

Accounting Policies [Abstract]

Business Description and Basis of Presentation [Text Block]

NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Nature of Operations

The accompanying consolidated financial statements include the accounts of Rocky Mountain Chocolate Factory, Inc., its wholly-owned subsidiary, Aspen Leaf Yogurt, LLC and its majority-owned subsidiary, U-Swirl, Inc. (collectively, the “Company”). All intercompany balances and transactions have been eliminated in consolidation.

Rocky Mountain Chocolate Factory, Inc. (“RMCF”) is an international franchisor, confectionery manufacturer and retail operator in the United States, Japan, South Korea, Canada and the United Arab Emirates. RMCF manufactures an extensive line of premium chocolate candies and other confectionery products.

Aspen Leaf Yogurt, LLC (“ALY”) was incorporated in the state of Colorado as Aspen Leaf Yogurt, Inc. on September 30, 2010 and organized through conversion as Aspen Leaf Yogurt, LLC on October 14, 2010. ALY was a franchisor and retail operator of self-serve frozen yogurt retail locations until the sale of substantially all of its assets in January 2013. ALY has ceased to operate any Company-owned Aspen Leaf Yogurt locations, or sell and support franchise locations.

On January 14, 2013, Ulysses Asset Acquisition, LLC (“Newco”), a wholly-owned subsidiary of the Company formed in the State of Colorado on January 2, 2013, entered into an agreement to acquire substantially all of the franchise rights of YHI, Inc. and Yogurtini International, LLC (collectively, “Yogurtini”), which are the franchisors of self-serve frozen yogurt retail units branded as “Yogurtini.” In addition, on January 14, 2013, the Company entered into two agreements to sell all of its membership interests in Newco and substantially all of its assets in ALY to U-Swirl, Inc., a publicly traded company (OTCQB: SWRL), in exchange for a 60% controlling equity interest in U-Swirl, Inc. U-Swirl, Inc. is in the business of offering consumers frozen desserts such as yogurt and sorbet. U-Swirl launched a national chain of self-serve frozen yogurt cafés called U-Swirl Frozen Yogurt and are franchising this concept. U-Swirl has built and operates cafés owned and operated by U-Swirl, Inc. (“Company-owned”) and franchises to others the right to own and operate U-Swirl cafés. It also franchises and operates self-serve frozen yogurt cafes under the name “Yogurtini” and “Aspen Leaf Yogurt.”

The Company’s revenues are currently derived from three principal sources: sales to franchisees and others of chocolates and other confectionery products manufactured by the Company; the collection of initial franchise fees and royalties from franchisees’ sales; and sales at Company-owned stores of chocolates and frozen yogurt and other confectionery products. The following table summarizes the number of stores operating under RMCF and its subsidiaries at May 31, 2013:

	Sold, Not Yet Open		Open		Total
Rocky Mountain Chocolate Factory
Company-owned stores		-		7		7
Franchise stores – Domestic stores		4		218		222
Franchise stores – Domestic kiosks		-		6		6
Franchise units – International		1		67		68
Cold Stone Creamery – co-branded		2		56		58
U-Swirl, Inc. Stores (Including Yogurtini and Aspen Leaf Yogurt)
Company-owned stores		-		14		14
Franchise stores – Domestic stores		4		57		61
Total		11		425		436

Basis of Presentation

The accompanying consolidated financial statements have been prepared by the Company, without audit, and reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial reporting and Securities and Exchange Commission regulations. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the consolidated financial statements reflect all adjustments (of a normal and recurring nature) which are necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. The results of operations for the three months ended May 31, 2013 are not necessarily indicative of the results to be expected for the entire fiscal year.

These consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended February 28, 2013.

Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block]

Stock-Based Compensation

At May 31, 2013, the Company had stock-based compensation plans for employees and non-employee directors that authorized the granting of stock awards, including stock options and restricted stock units.

The Company recognized $142,808 of stock-based compensation expense during the three months ended May 31, 2013 compared with $135,033 during the three months ended May 31, 2012. Compensation costs related to stock-based compensation are generally amortized over the vesting period.

The following table summarizes stock option transactions for common stock during the three months ended May 31, 2013 and 2012:

	Three Months Ended
	May 31,
	2013			2012
Outstanding stock options as of February 28 or 29:		270,945			307,088
Granted		-			-
Exercised		-			-
Cancelled/forfeited		(88,725	)		(14,952	)
Outstanding stock options as of May 31:		182,220			292,136
Weighted average exercise price	$	7.93		$	10.64
Weighted average remaining contractual term (in years)		1.17			2.57

The following table summarizes non-vested restricted stock unit transactions for common stock during the three months ended May 31, 2013 and 2012:

	Three Months Ended
	May 31,
	2013			2012
Outstanding non-vested restricted stock units as of February 28 or 29:		57,030			101,980
Granted		280,900			-
Vested		(7,820	)		(10,420	)
Cancelled/forfeited		-			(560	)
Outstanding non-vested restricted stock units as of May 31:		330,110			91,000
Weighted average grant date fair value	$	11.78		$	9.15
Weighted average remaining vesting period (in years)		5.17			1.61

During the three months ended May 31, 2013, the Company issued 4,000 fully vested, unrestricted shares of stock to non-employee directors compared with 4,000 fully vested, unrestricted shares of stock to non-employee directors in the three months ended May 31, 2012. In connection with these non-employee director stock issuances, the Company recognized $48,400 and $37,200 of stock-based compensation expense during the three-month period ended May 31, 2013 and 2012, respectively.

During the three months ended May 31, 2013, the Company recognized $94,408 of stock-based compensation expense related to non-vested, non-forfeited restricted stock unit grants. The restricted stock units generally vest 20% annually over a period of five years. Total unrecognized compensation expense of non-vested, non-forfeited restricted stock units, as of May 31, 2013, was $3,609,515, which is expected to be recognized over the weighted average period of 5.2 years.

During the three month period ended May 31, 2013, the Company granted 280,900 shares of restricted stock units with a grant date fair value of $3,437,950 or $12.24 per share, compared with no restricted stock units awarded in the three months ended May 31, 2012. The restricted stock unit grants vest between 17% and 20% annually over a period of five to six years. There were no stock options awarded during the three months ended May 31, 2013 or 2012.

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model utilizing the following weighted average assumptions:

XML

Note 6 - Supplemental Cash Flow Information

3 Months Ended

May 31, 2013

Cash Flow, Supplemental Disclosures [Text Block]

Cash Flow, Supplemental Disclosures [Text Block]

NOTE 6 – SUPPLEMENTAL CASH FLOW INFORMATION

	Three Months Ended
	May 31,
Cash paid (received) for:	2013			2012
Interest	$	(8,606	)	$	(11,192	)
Income taxes		594,336			52,780
Non-Cash Operating Activities Accrued Inventory		215,703			243,605
Non-Cash Financing Activities Dividend payable	$	668,832		$	675,731
Accrued Capital Expenditures	$	-		$	47,216

XML

Note 1 - Nature of Operations and Summary of Significant Accounting Policies

3 Months Ended

May 31, 2013

Disclosure Text Block [Abstract]

Business Description and Accounting Policies [Text Block]

NOTE 1 – NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Nature of Operations

The accompanying consolidated financial statements include the accounts of Rocky Mountain Chocolate Factory, Inc., its wholly-owned subsidiary, Aspen Leaf Yogurt, LLC and its majority-owned subsidiary, U-Swirl, Inc. (collectively, the “Company”). All intercompany balances and transactions have been eliminated in consolidation.

Rocky Mountain Chocolate Factory, Inc. (“RMCF”) is an international franchisor, confectionery manufacturer and retail operator in the United States, Japan, South Korea, Canada and the United Arab Emirates. RMCF manufactures an extensive line of premium chocolate candies and other confectionery products.

Aspen Leaf Yogurt, LLC (“ALY”) was incorporated in the state of Colorado as Aspen Leaf Yogurt, Inc. on September 30, 2010 and organized through conversion as Aspen Leaf Yogurt, LLC on October 14, 2010. ALY was a franchisor and retail operator of self-serve frozen yogurt retail locations until the sale of substantially all of its assets in January 2013. ALY has ceased to operate any Company-owned Aspen Leaf Yogurt locations, or sell and support franchise locations.

On January 14, 2013, Ulysses Asset Acquisition, LLC (“Newco”), a wholly-owned subsidiary of the Company formed in the State of Colorado on January 2, 2013, entered into an agreement to acquire substantially all of the franchise rights of YHI, Inc. and Yogurtini International, LLC (collectively, “Yogurtini”), which are the franchisors of self-serve frozen yogurt retail units branded as “Yogurtini.” In addition, on January 14, 2013, the Company entered into two agreements to sell all of its membership interests in Newco and substantially all of its assets in ALY to U-Swirl, Inc., a publicly traded company (OTCQB: SWRL), in exchange for a 60% controlling equity interest in U-Swirl, Inc. U-Swirl, Inc. is in the business of offering consumers frozen desserts such as yogurt and sorbet. U-Swirl launched a national chain of self-serve frozen yogurt cafés called U-Swirl Frozen Yogurt and are franchising this concept. U-Swirl has built and operates cafés owned and operated by U-Swirl, Inc. (“Company-owned”) and franchises to others the right to own and operate U-Swirl cafés. It also franchises and operates self-serve frozen yogurt cafes under the name “Yogurtini” and “Aspen Leaf Yogurt.”

The Company’s revenues are currently derived from three principal sources: sales to franchisees and others of chocolates and other confectionery products manufactured by the Company; the collection of initial franchise fees and royalties from franchisees’ sales; and sales at Company-owned stores of chocolates and frozen yogurt and other confectionery products. The following table summarizes the number of stores operating under RMCF and its subsidiaries at May 31, 2013:

	Sold, Not Yet Open		Open		Total
Rocky Mountain Chocolate Factory
Company-owned stores		-		7		7
Franchise stores – Domestic stores		4		218		222
Franchise stores – Domestic kiosks		-		6		6
Franchise units – International		1		67		68
Cold Stone Creamery – co-branded		2		56		58
U-Swirl, Inc. Stores (Including Yogurtini and Aspen Leaf Yogurt)
Company-owned stores		-		14		14
Franchise stores – Domestic stores		4		57		61
Total		11		425		436

Basis of Presentation

The accompanying consolidated financial statements have been prepared by the Company, without audit, and reflect all adjustments which are, in the opinion of management, necessary for a fair statement of the results for the interim periods presented. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial reporting and Securities and Exchange Commission regulations. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In the opinion of management, the consolidated financial statements reflect all adjustments (of a normal and recurring nature) which are necessary for a fair presentation of the financial position, results of operations and cash flows for the interim periods presented. The results of operations for the three months ended May 31, 2013 are not necessarily indicative of the results to be expected for the entire fiscal year.

These consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company's Annual Report on Form 10-K for the fiscal year ended February 28, 2013.

Stock-Based Compensation

At May 31, 2013, the Company had stock-based compensation plans for employees and non-employee directors that authorized the granting of stock awards, including stock options and restricted stock units.

The Company recognized $142,808 of stock-based compensation expense during the three months ended May 31, 2013 compared with $135,033 during the three months ended May 31, 2012. Compensation costs related to stock-based compensation are generally amortized over the vesting period.

The following table summarizes stock option transactions for common stock during the three months ended May 31, 2013 and 2012:

	Three Months Ended
	May 31,
	2013			2012
Outstanding stock options as of February 28 or 29:		270,945			307,088
Granted		-			-
Exercised		-			-
Cancelled/forfeited		(88,725	)		(14,952	)
Outstanding stock options as of May 31:		182,220			292,136
Weighted average exercise price	$	7.93		$	10.64
Weighted average remaining contractual term (in years)		1.17			2.57

The following table summarizes non-vested restricted stock unit transactions for common stock during the three months ended May 31, 2013 and 2012:

	Three Months Ended
	May 31,
	2013			2012
Outstanding non-vested restricted stock units as of February 28 or 29:		57,030			101,980
Granted		280,900			-
Vested		(7,820	)		(10,420	)
Cancelled/forfeited		-			(560	)
Outstanding non-vested restricted stock units as of May 31:		330,110			91,000
Weighted average grant date fair value	$	11.78		$	9.15
Weighted average remaining vesting period (in years)		5.17			1.61

During the three months ended May 31, 2013, the Company issued 4,000 fully vested, unrestricted shares of stock to non-employee directors compared with 4,000 fully vested, unrestricted shares of stock to non-employee directors in the three months ended May 31, 2012. In connection with these non-employee director stock issuances, the Company recognized $48,400 and $37,200 of stock-based compensation expense during the three-month period ended May 31, 2013 and 2012, respectively.

During the three months ended May 31, 2013, the Company recognized $94,408 of stock-based compensation expense related to non-vested, non-forfeited restricted stock unit grants. The restricted stock units generally vest 20% annually over a period of five years. Total unrecognized compensation expense of non-vested, non-forfeited restricted stock units, as of May 31, 2013, was $3,609,515, which is expected to be recognized over the weighted average period of 5.2 years.

During the three month period ended May 31, 2013, the Company granted 280,900 shares of restricted stock units with a grant date fair value of $3,437,950 or $12.24 per share, compared with no restricted stock units awarded in the three months ended May 31, 2012. The restricted stock unit grants vest between 17% and 20% annually over a period of five to six years. There were no stock options awarded during the three months ended May 31, 2013 or 2012.

The fair value of each stock option grant is estimated on the date of grant using the Black-Scholes option-pricing model utilizing the following weighted average assumptions:

XML

Note 7 - Operating Segments (Details) - Segment Information (USD $)	3 Months Ended
	May 31, 2013	May 31, 2012	Feb. 28, 2013
Segment Reporting Information [Line Items]
Revenues (in Dollars)	$ 10,177,862	$ 9,658,193
Total assets	23,470,714		23,833,945
Total depreciation & amortization	235,756	237,140
Interesegment Revenue (Member) | Manufacturing [Member]
Segment Reporting Information [Line Items]
Revenues (in Dollars)	(440,754)	(543,087)
Interesegment Revenue (Member) | Total (Member)
Segment Reporting Information [Line Items]
Revenues (in Dollars)	(440,754)	(543,087)
External Customers (Member) | Franchising [Member]
Segment Reporting Information [Line Items]
Revenues (in Dollars)	1,660,016	1,567,567
External Customers (Member) | Manufacturing [Member]
Segment Reporting Information [Line Items]
Revenues (in Dollars)	6,285,302	6,413,345
External Customers (Member) | Retail [Member]
Segment Reporting Information [Line Items]
Revenues (in Dollars)	515,138	1,677,281
External Customers (Member) | U-Swirl, Inc. [Member]
Segment Reporting Information [Line Items]
Revenues (in Dollars)	1,717,406
External Customers (Member) | Total (Member)
Segment Reporting Information [Line Items]
Revenues (in Dollars)	10,177,862	9,658,193
Operating Segments [Member] | Franchising [Member]
Segment Reporting Information [Line Items]
Total depreciation & amortization	8,593	11,380
Operating Segments [Member] | Manufacturing [Member]
Segment Reporting Information [Line Items]
Total depreciation & amortization	72,373	71,337
Operating Segments [Member] | Retail [Member]
Segment Reporting Information [Line Items]
Total depreciation & amortization	14,740	116,781
Operating Segments [Member] | U-Swirl, Inc. [Member]
Segment Reporting Information [Line Items]
Total depreciation & amortization	105,578
Operating Segments [Member] | Other Segments [Member]
Segment Reporting Information [Line Items]
Total depreciation & amortization	34,472	37,642
Operating Segments [Member] | Total (Member)
Segment Reporting Information [Line Items]
Total depreciation & amortization	235,756	237,140
Franchising [Member]
Segment Reporting Information [Line Items]
Revenues (in Dollars)	1,660,016	1,567,567
Segment profit (loss)	848,444	668,935
Total assets	1,334,534	1,463,906
Capital expenditures	8,451	7,539
Manufacturing [Member]
Segment Reporting Information [Line Items]
Revenues (in Dollars)	6,726,056	6,956,432
Segment profit (loss)	1,748,467	1,818,267
Total assets	10,035,858	9,594,086
Capital expenditures	31,481	52,422
Retail [Member]
Segment Reporting Information [Line Items]
Revenues (in Dollars)	515,138	1,677,281
Segment profit (loss)	(44,859)	12,635
Total assets	1,277,606	5,158,282
Capital expenditures	5,611	160,859
U-Swirl, Inc. [Member]
Segment Reporting Information [Line Items]
Revenues (in Dollars)	1,717,406
Segment profit (loss)	168,079
Total assets	3,357,523
Other Segments [Member]
Segment Reporting Information [Line Items]
Segment profit (loss)	(889,438)	(866,443)
Total assets	7,465,193	7,460,317
Capital expenditures	12,252	32,032
Total (Member)
Segment Reporting Information [Line Items]
Revenues (in Dollars)	10,618,616	10,201,280
Segment profit (loss)	1,830,693	1,633,394
Total assets	23,470,714	23,676,591
Capital expenditures	$ 57,795	$ 252,852

XML

Note 4 - Property and Equipment, Net (Tables)

3 Months Ended

May 31, 2013

Property, Plant and Equipment Disclosure [Text Block]

Property, Plant and Equipment [Table Text Block]

	May 31, 2013		February 28, 2013
Land	$	513,618	$	513,618
Building		4,777,476		4,764,005
Machinery and equipment		8,923,060		8,864,126
Furniture and fixtures		1,033,254		1,024,261
Leasehold improvements		1,930,991		1,930,991
Transportation equipment		392,755		392,755
		17,571,154	$	17,489,756
Less accumulated depreciation		10,942,464		10,712,613
Property and equipment net	$	6,628,690	$	6,777,143

XML

Note 9 - Related Party Transactions

3 Months Ended

May 31, 2013

Related Party Transactions Disclosure [Text Block]

Related Party Transactions Disclosure [Text Block]

NOTE 9 – RELATED PARTY TRANSACTIONS

The Company has entered into Franchise Agreements and a Development Agreement with a member of the Company’s Board of Directors. The Director operates two ALY locations under the Franchise Agreements and the Development Agreement. As of May 31, 2013, the Company had receivables of approximately $2,200 due from the Director associated with the director’s ownership and operation of the two current ALY locations.

U-Swirl, Inc. was owed $11,489 and $8,597 as of May 31, 2013 and February 28, 2013, respectively, from a U-Swirl franchise that is owned and operated by the grandchildren of the Company’s Chief Marketing Officer. The corporate secretary and treasurer of the franchise is also the Company’s corporate secretary.

As of May 31, 2013 and February 28, 2013, U-Swirl, Inc. had deferred revenue of $30,000 and $30,000, respectively, from an area developer in which the Company’s Chief Executive Officer and Chief Operating Officer have a minority interest.

XML

Note 8 - Goodwill and Intangible Assets (Tables)

3 Months Ended

May 31, 2013

Goodwill and Intangible Assets Disclosure [Text Block]

Schedule of Indefinite-Lived Intangible Assets [Table Text Block]

				May 31, 2013				February 28, 2013
	Amortization Period (Years)			Gross Carrying Value		Accumulated Amortization		Gross Carrying Value		Accumulated Amortization
Intangible assets subject to amortization
Store design		10		$	205,777	$	205,301	$	205,777	$	205,142
Packaging licenses	3	-	5		120,830		120,830		120,830		120,830
Packaging design		10			430,973		430,973		430,973		430,973
Total					757,580		757,104		757,580		756,945
Intangible assets not subject to amortization
Franchising segment-
Company stores goodwill					1,099,328		267,020		1,099,328		267,020
Franchising goodwill					295,000		197,682		295,000		197,682
Manufacturing segment-Goodwill					295,000		197,682		295,000		197,682
Trademark					20,000		-		20,000		-
Total Goodwill					1,709,328		662,384		1,709,328		662,384
Franchise Rights					800,000		-		800,000		-
Total intangible assets				$	3,266,908	$	1,419,488	$	3,266,908	$	1,419,329

XML

Note 6 - Supplemental Cash Flow Information (Tables)

3 Months Ended

May 31, 2013

Cash Flow, Supplemental Disclosures [Text Block]

Schedule of Cash Flow, Supplemental Disclosures [Table Text Block]

	Three Months Ended
	May 31,
Cash paid (received) for:	2013			2012
Interest	$	(8,606	)	$	(11,192	)
Income taxes		594,336			52,780
Non-Cash Operating Activities Accrued Inventory		215,703			243,605
Non-Cash Financing Activities Dividend payable	$	668,832		$	675,731
Accrued Capital Expenditures	$	-		$	47,216

XML

Document And Entity Information	3 Months Ended
	May 31, 2013	Jun. 30, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	ROCKY MOUNTAIN CHOCOLATE FACTORY INC
Document Type	10-Q
Current Fiscal Year End Date	--02-28
Entity Common Stock, Shares Outstanding		6,080,290
Amendment Flag	false
Entity Central Index Key	0000785815
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	May 31, 2013
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q1

XML

Note 7 - Operating Segments (Tables)

3 Months Ended

May 31, 2013

Segment Reporting Disclosure [Text Block]

Schedule of Segment Reporting Information, by Segment [Table Text Block]

Three Months Ended May 31, 2013	Franchising		Manufacturing			Retail			U-Swirl, Inc.		Other			Total
Total revenues	$	1,660,016	$	6,726,056		$	515,138		$	1,717,406	$	-		$	10,618,616
Intersegment revenues		-		(440,754	)		-			-		-			(440,754	)
Revenue from external customers		1,660,016		6,285,302			515,138			1,717,406		-			10,177,862
Segment profit (loss)		848,444		1,748,467			(44,859	)		168,079		(889,438	)		1,830,693
Total assets		1,334,534		10,035,858			1,277,606			3,357,523		7,465,193			23,470,714
Capital expenditures		8,451		31,481			5,611			-		12,252			57,795
Total depreciation & amortization		8,593		72,373			14,740			105,578		34,472			235,756

Three Months Ended May 31, 2012	Franchising		Manufacturing			Retail		U-Swirl, Inc.		Other			Total
Total revenues	$	1,567,567	$	6,956,432		$	1,677,281	$	-	$	-		$	10,201,280
Intersegment revenues		-		(543,087	)		-		-		-			(543,087	)
Revenue from external customers		1,567,567		6,413,345			1,677,281		-		-			9,658,193
Segment profit (loss)		668,935		1,818,267			12,635		-		(866,443	)		1,633,394
Total assets		1,463,906		9,594,086			5,158,282		-		7,460,317			23,676,591
Capital expenditures		7,539		52,422			160,859		-		32,032			252,852
Total depreciation & amortization		11,380		71,337			116,781		-		37,642			237,140