Chocolate and confectionery maker and franchise company Rocky Mountain Chocolate Factory has announced that it has repaid all of its outstanding debt.

"The repayment of approximately $1.4m in debt ahead of schedule leaves our company in the enviable position of being debt-free with over $2m of cash in the bank," said chief operating officer Bryan Merryman.

"Our business model generates significant free cash flows from operations, and this has allowed us to increase our quarterly cash dividend five times since we paid our first cash dividend in the third quarter of fiscal 2004," he said. "With our cash balances growing, and in light of the prospect that interest rates might rise for the foreseeable future, we decided to pay off our remaining debt, even though there were no requirements in our bank credit facility requiring us to do so. In addition to our cash balances, we have a $2.5m line of credit available for future borrowings, if necessary."