Archive for June, 2011


Frozen Yogurt Store Topping Bar Rail Station for Cut Fruit – Refrigerated

June 26, 2011

Frozen Yogurt Store Topping Bar Rail Station for Cut Fruit – Refrigerated

Frozen Yogurt Store Topping Bar Rail Station Fruit Refrigerated

Frozen Yogurt Refrigerated Topping Drop In Bar

Frozen Yogurt Topping Bar Options for Frozen Yogurt Stores

SEE OUR SPECIAL “TURNKEY” PRICING BELOW THESE SPECS

Frozen Yogurt Bar Topping Station

MODEL

Turn-Key Price Shipping Cost
RM-1 $2475.00 (FREE SHIPPING)
RM-2 $2729.00 (FREE SHIPPING)
RM-3 $2980.00 (FREE SHIPPING)
RM-4 $3228.00 (FREE SHIPPING)
RM-5 $3631.00 (FREE SHIPPING)
RM-6 $3922.00 (FREE SHIPPING)

The units above are what you will typically see in a Self Serve Frozen Yogurt store. Basically, these refrigerated topping bars are “dropped in” to a counter that has a section cut out of it.

Or, if you want to make your life a little simpler, you can order the refrigerated topping unit already built into the counter as shown in the options below. This way you can buy it as an already assembled unit, including a glass sneeze guard. They have small casters (wheels) to make it easy to move them around to clean under. They also lock firmly in place.

frozen yogurt store topping dispensers

Topping Bar with sneeze guard for frozen yogurt store

Above: Model BLC-4 RM S/S- Refrigerated Cold Pan with 3″ recessed top. 40″ Wide with stainless Steel Top

cabinet for ice cream toppings

Above: Model BLC4 RM – Refrigerated Cold Pan with 3″ recessed top.

Neil Williams
President

KeyWord Farm, LLC
www.TurnKeyParlor.com
877-817-5716
877-632-2210 (fax)
sales@turnkeyparlor.com
BLOG My Humble Beginnings in Paradise

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Your Ice Cream Business: Cost Per Scoop Analysis

June 23, 2011

How do you set up and organize your new ice cream business? This article is an excerpt from our FREE Ice Cream Business Guide – Click the book cover below for details on how to download for free.

COST PER SCOOP ANALYSIS:

 

In general, parlor ice cream is packed in 3-gallon tubs.  Edy’s, Breyer’s, Blue Bell and most premium brands come in 3 gallon, round cans. A ballpark figure as far as cost is concerned is about $30/tub for premium ice cream. Some companies charge less for Vanilla, Chocolate and Strawberry and a little more for everything else. The $26 is a good average figure for premium ice cream. You are supposed to get 55 four-ounce scoops out of a 3-gallon tub. This works out to .47 cents per scoop. I like to add 8 cents to the cost to cover waste, giveaways, etc. So were looking at .55 cents per scoop. Many companies will try to manipulate these figures in their best interests, but I can tell you from experience that the $.55 per 4 oz scoop is pretty reliable. Add another 5 cents for cup and spoon or the cone for a total of .60 cents per scoop. Very doubtful that in real life it works out to be any less, even if you are paying a few bucks less for the tub. Cheaper tubs usually have more air whipped in and you yield less, therefore having the same or higher cost when it comes down to it. My recommended retail is $2.00.

$2.25-$2.50 isn’t out of the question, but might be too much depending on the area. You are in this to make money, so do some competitive research in your area and make sure that you start off as high as the market will seem to bear.  Raising prices later because you realize you aren’t charging enough is never good, so make sure you pay particular attention to your pricing strategy right off the bat. The majority of new business owners make the mistake of not pricing their products high enough. Don’t let this be you. A $2.00 retail makes the COGS (cost of goods sold) 30%. (.60/$2.00 = 30%).

Neil Williams
President

KeyWord Farm, LLC
www.TurnKeyParlor.com
877-817-5716
877-632-2210 (fax)
sales@turnkeyparlor.com
BLOG My Humble Beginnings in Paradise


Location and Traffic of Your Ice Cream Business



How do you set up and organize your new ice cream business? This article is an excerpt from our FREE Ice Cream Business Guide – Click the book cover below for details on how to download for free.

Location and Traffic

  • Car traffic is nice, but more importantly, how many people are walking by?
  • If you are counting on high car traffic, make sure that your location is easily visible from the street and easy to access (parking, etc.)
  • Are they typically there to browse or to buy?
  • Being in a Wal-mart type plaza doesn’t guarantee success. It depends on how close to the Wal-Mart door you are.
  • Talk to existing businesses and ask them what the traffic is like.
  • If you are counting on car traffic as your main traffic, a drive thru window is almost mandatory.
  • Enclosed malls are better for year round traffic and people prefer them to stroll through and buy ice cream! In general, it’s better to pay more rent and be in an enclosed mall than to pay less and be in a strip mall.
  • 3-4 good anchor stores would help.
  • Visit the site on different days at different times to see how consistent the traffic is.
  • Competition: How many parlors within a 1 mile radius? If inside a mall, who else is serving ice cream? Competition is not necessarily a bad thing. If someone else is on one side of the mall and doing well, chances are that you will do well on the extreme other side of the mall.
  • Population is key. If the area is somewhat congested, that’s a good sign.
  • Visibility. Will everyone who walks close by know that there is ice cream there?
  • Would you buy ice cream there? Can you see yourself hanging out and enjoying a cone or cup in the area?
  • Hours of operation: Make sure that the peak traffic flow is during hours that you’re willing and able to be open.
  • Make sure you have adequate space. 800-1000 sq ft is a pretty good middle ground.
  • Is the area growing?

Good locations/Bad locations:

Good:

Indoor Malls, airports, zoo’s, university campus, amusement parks, strip malls (high traffic), next to a movie theatre, superstore (inside a Wal-mart), professional building, train station, beach area, sporting arena.

Bad:

Strip Mall unless in thriving area with obvious high traffic (low traffic, no real anchor’s), busy street (but being on the wrong side), gas station, fast food/snack operation that failed.

 

LEASES:

 

After you find out what they want for monthly rent, don’t be afraid to ask for a stepped up lease with a low initial amount. For example, free rent for the first month, half the rent for the next three months, then full rent beginning in month four.  Or a couple of hundred off per month for the first year. This is just a negotiating guideline. They may not go for it, but it doesn’t hurt to ask. In fact, they may be expecting you to. If you don’t, they may feel they can take advantage of you in some way. So it’s always best to shoot for the sky and then see what they will give in to. It is in their best interest to help you get off on the right foot and be successful. Many will be willing to help if they believe in you.

From my experience, you probably don’t want to pay more than $3000 per month. It’s very hard to make a go of it at a higher monthly rent unless you are talking about an airport or ridiculously high traffic mall. An average rent for a parlor is in the $1800 range. Of course, these are just general benchmarks. An average parlor should sell around $18,000 per month. A rough industry standard says that rent should fall within 8-12% (10% x $18,000 = $1800 per month)

Neil Williams
President

KeyWord Farm, LLC
www.TurnKeyParlor.com
877-817-5716
877-632-2210 (fax)
sales@turnkeyparlor.com
BLOG My Humble Beginnings in Paradise


How to Set Up and Organize Your New Ice Cream Business



How do you set up and organize your new ice cream business? This article is an excerpt from our FREE Ice Cream Business Guide – Click the book cover below for details on how to download for free.

How to set up and organize your new business

 

When starting your new business you will need to decide if your business will be a sole proprietorship, a partnership or a corporation.  This should be one of the first decisions you make once you have decided to go into the ice cream business.  Some people are overwhelmed with the thought of making this decision.  Below are the definitions of each type of business and the pro’s and con’s of each type.  While we can explain your options if you want further advice on which way you should organize your business you may want to consult with an attorney or an accountant.

Sole proprietorship:  a business owned by one person or a married couple that files jointly.

Partnership:  a business owned by more than one person.

Corporation:  A business organized as a separate legal entity owned by stockholders.  You can have a corporation with as few as 1 or 2 people.

Most people choose the sole proprietorship form for their ice cream shop.  This is really the easiest option and probably simplifies things at tax time since most of the time you just fill out a business profit and loss form and you claim the shop income on your personal return.

 

 

Business license and Tax ID numbers

Once you have decided which type of business entity you are going to have you will have to set it up.  For a sole proprietorship you will need to file for a business license in the city you live.  At city hall there will be a department for business licenses.  Go there and fill out the pertinent information.  There will be a minimal charge to obtain this license.  You will also need to register the name of your business in the city and county so that no one else will use your name and you will not use a name that is already registered.  You will need to do the above for a partnership and a corporation as well.

All 3 forms of business will need the following numbers in order to sell products, charge taxes and file taxes.  You will need a tax id number. Your tax id number is also called an Employer Identification Number or EIN.  You can apply by phone at 1-800-829-4933 between 7am and 10pm or simply go to www.irs.gov .  Once online search for form SS-4.  When the search is complete click on the online application.  On the next screen scroll down and click on “apply online now”.  You can submit the form electronically or print and mail it in.  There is more information online if you need more help.  You must also check with your state regarding state and county sales tax id numbers.  To find out what forms to complete check with the Department of Revenue in your state.

FIRST STEPS

 

The most important decision you will make on the road to success is most likely to be the location you choose. You’ve probably already heard of the 3 most important factors involved in a successful retail operation: location, location, location. I cannot stress enough the importance of this, especially when it comes to ice cream.

Ice cream is an “impulse” product. In other words, people who buy ice cream usually do it on impulse when they see it and are tempted. It is less likely these days that people will make a conscious thought to go to an ice cream parlor. Sure, some still do, but many more sales are made to customers who happen to be brought to the area for another reason.

 


Starting an Ice Cream Shop



How do you set up and organize your new ice cream business? This article is an excerpt from our FREE Ice Cream Business Guide – Click the book cover below for details on how to download for free.

Ice Cream Business Guide

Introduction

Starting any new business on your own can be stressful and frightening.  In this book, we will try to teach you the basics on how to choose an ice cream vendor, negotiate your lease, hire employees, and market the business.  Step 1 is…..don’t panic. You have a lot of information to go through and it will take time. You won’t necessarily understand everything, and not everything will make sense to you right away. If some of the business terms are foreign to you, don’t worry. You will learn little by little.

At the end of the day, the most important thing is your drive to succeed. If you are a people person, you will take good care of your customers and the business part will take care of itself….one step at a time.

Why should you choose the ice cream business?  It is said that 90% of Americans love to eat ice cream.  With that in mind why not choose a business whose product is loved and enjoyed by so many people?

In general, ice cream is a mixture of cream and milk, sweeteners, flavoring and air.  As it freezes air is beaten into the milk making the final product light and easy to eat with a spoon.  There are other ingredients such as eggs used in rich French ice creams and emulsifiers and stabilizers that are added to many commercial ice creams to help keep ice crystals from forming.  Quality, freshness of ingredients and the amount of air that is whipped into the product are factors that separate the best from the rest in the world of ice cream.  Dried milk products and a lower percentage of milk fats (butter fats) are usually seen in economy ice creams.  The higher quality ice creams are denser and less airy.  Fresh products are used in premium ice cream plus they contain up to 20% milk fat and include minimal additives.  The less air the higher the quality. If it doesn’t have at least 10% Butterfat or has more than 50% air, it has to be labeled “frozen dairy dessert”. Some of the major national ice cream manufacturers have product on the shelf that has a lot of candy chunks in it and because this adds cost, they either reduce the butter fat or add air in order to lower the cost. If you look closely, some of them are labeled “frozen dairy dessert” because they are more than 50% air.

The three segments in commercial ice cream are super premium (Ben & Jerry’s and Haagen-Dazs, premium (Dreyer’s, Edy’s and Breyer’s) and economy (supermarket Private Brand).  You should at least strive to sell premium ice cream in your ice cream parlor.  Customers can taste the difference and they expect something more that the local dairies ice cream, although it depends on your local dairy. Some dairies make a fantastic product, so give them a shot too and “see what they got”.

Neil Williams
President

KeyWord Farm, LLC
www.TurnKeyParlor.com
877-817-5716
877-632-2210 (fax)
sales@turnkeyparlor.com
BLOG My Humble Beginnings in Paradise

 


Choosing a Location for your Frozen Yogurt Shop



How do you choose the best location for your Frozen Yogurt Shop? This article is an excerpt from our FREE Soft Serve Frozen Yogurt Business Guide – Click the book cover below for details on how to download for free.

Location

  • What works, what doesn’t – You want a place that is comfortable. Easy to get in, plenty of parking. A place you can see a family sitting and relaxing with their frozen yogurt treat.
  • Visibility is important
  • Other eateries nearby are great to have. People finish their food and head over to the close by yogurt shop
  • Malls are good, but not always. Need to make sure that the mall is open during peak yogurt hours, which can go into the night
  • Outdoor seating is a great plus
  • Typical

BIGGEST MISTAKES PEOPLE MAKE:

  • Improper ventilation of machines – they will “under-perform” and die an early death
  • “Too Much Machine” – People think that buying the biggest, most expensive machine is the way to go. It’s not. You can buy too much machine and suffer a utilities bill that is more than it needs to be.
  • Improper machine settings – yield crappy texture and taste. Not a good thing. You need to know how to set the machines to yield the product you want, and you need to keep controlling quality on a regular basis.
  • Bad location – speaks for itself
  • Not throwing away cut fruit that sits in pans too long. I see this often. A manager trying to control food costs keeps cut strawberries or whatever fruit in the pan so long that it looks like mush. These should be thrown away long before. In fact, they should be tossed if they don’t look SUPER fresh. Nothing will turn a customer off more than mushy fruit. In fact, a key to this business is exciting the customer’s senses with fruit that looks fit to be photographed and put on the cover of Bon Appetite.

I hope this guide has helped provide a basic understanding of what it takes to open a successful self serve frozen yogurt store. Please call or e-mail us if you would like to learn more about our 1 on 1 consulting offers.

Best Regards,

Neil Williams
President

KeyWord Farm, LLC
www.TurnKeyParlor.com
877-817-5716
877-632-2210 (fax)
sales@turnkeyparlor.com
BLOG My Humble Beginnings in Paradise

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Key Equipment Needed When Opening a Frozen Yogurt Store



What is the key equipment you need to open a frozen yogurt store? This article is an excerpt from our FREE Soft Serve Frozen Yogurt Business Guide – Click the book cover below for details on how to download for free.

Key Equipment See Machine Reviews at end of this post

Machinery – What Works Best? Stoelting,Taylor, Electro Freeze or Spaceman USA?. The answer: All of these can be good choices. Depends on your budget and goals.

A little bit about soft serve machines. Some of what I mention here will be obvious to many of you, but I’m writing this book with the thought that you have no idea at all about the equipment or the soft serve business.

First off, soft serve is simply a type of frozen desert that hasn’t been hardened.

When looking for a machine, one of the first things you have to consider is the machines capacity.

Capacity is almost always measured by how many servings per minute the machine yields. High volume machines can generally yield 7 four ounce servings per minute. This is ideal if you have one machine at a concession where there is a long line and the machine is constantly being hit hard. It has to “recover” quickly. Medium volume machines yield about 4 four ounce servings and low volume machines yield about 1 to 2 four ounce servings per minute.

For self serve operations with multiple machines, you don’t need high volume machines. Medium volume machines are perfect for a self serve frozen yogurt store. It doesn’t make sense to go with high capacity/volume machines because these require more power and will increase your overhead unnecessarily.

Soft serve machines store “mix” in the “hopper”. The mix then goes into the barrel to be frozen, and churned by a “dasher”.

Key features on the newer machines that are critically important include “low mix alarms”.  If the barrel isn’t full, the mix might freeze solid and this will keep the dasher from turning. A frozen barrel can cause the dasher bars to bend or worse, damage the compressor.

The low mix alarm will shut down the compressor automatically if someone doesn’t respond to the low mix alarm. It will re-start periodically, but will keep shutting down until someone adds mix to the machine.

Water cooled vs. Air Cooled. If you have good ventilation, you can go air cooled. If ventilation is an issue, water cooled is a better option. If you have more than 6 machines, there is a water cooled option called a “glycol system” which might be a good option. It’s not cheap at about $15k, but it protects the machines and keeps your air conditioner from working overtime.

MOST POPULAR MACHINES AND OUR REVIEWS

 

Stoelting Taylor Yogurt Machine Reviews

 

Spaceman Frozen Yogurt Machine Reviews

 

 

Donper Elvaria Yogurt Machine Reviews

 

Alpine Yogurt Machine Reviews


Opening a Frozen Yogurt Store: The Financials – The Typical Overhead Expenses

June 22, 2011

Are you interested in learning about the financials of opening a frozen yogurt store? The article below is an excerpt from our FREE Soft Serve Frozen Yogurt Business Guide – Click the book cover below for details on how to download for free.

FINANCIALS

Please understand that these figures are designed primarily to give you something of a framework for which to work from, but are in no way a specific example of what you will make from the venture.

 

Overhead Examples

  • Labor Costs – These are really tough to nail down and are subject to a wide range of factors. For the purposes of this guide, figure anywhere from $7,500 to $15k per month in labor. About $7,300  a month for an average store doing about $350,000 a year. A good rule of thumb for labor is about 25-30% of sales.
  • Figure 3 total employees at one time in store, store open 70 hours a week. This can be trimmed down if sales are really weak on certain days or times.

Breakdown:

One employee working register, one manning machine back room and keeping toppings full, one on floor as “info” person, keeping machines, floor and tables clean. Floor employee explains process to new customers, controls customer “over sampling” and generally keeps things running smoothly. Reduced to 2 employees during slower hours of the day or slower day of the week.

Figure you need 3 employees on the floor for 6 of the 10 hours per day. Figure 2 employees for the other 4 of the 10 hours.

Total man hours per day as noted below:

3 employees for 6 hours = 18 hours

2 employees for 4 hours = 8 hours

26 hours at a blended hourly rate of $12/hr = $312 per day or $2184 per week.

Possible pay breakout below*:

  • Manager (@$15/hr)
  • Supervisor (@$12/hr)
  • Full time customer servers (@10/hr)
  • Part timers (@ $9/hr)

*estimates – not a perfect science. Per hour pay includes FICA costs

A first year profit and loss statement could potentially look like this (basic model):

Annual Sales ($1000/day for 350 days)* $ 350,000
Cost of Goods (Yogurt and Toppings) $   87,500 (about 25% of sales)
Gross Profit $ 262,500
Labor (about 25% of sales) $  87,500
Rent ($3500/mo) $  42,000
Bank Loan/Interest ($3000/mo) $  36,000
Utilities ($1500/mo) $  18,000
Miscellaneous $    5,000
TOTAL EXPENSES ($ 188,500)
Annual Profit for owner $  74,000

These are all very rough numbers, but to do $1000 in a 10 hour day, you would need to sell 2,200 ounces, at $.45 per ounce. At an average of 8 ounces per customer, you would need about 275 customers, or about 27 customers per hour. Again, these are rough numbers and can be tweaked by adding more hours to the day, etc.

Keep in mind that as an owner/operator, your net pay would be higher since you would be paying yourself the manager salary as well as the profit.

We’ve heard that there are stores out there doing $500k, $750k and up to 1 million per year. We chose to use $350,000 as an example to keep it as real as possible. The stores doing the bigger numbers are paying more rent and labor and are in very high traffic, more affluent locations.

  • Rent/Location
  • All over the place of course. Dependent on a ton of different factors. Can range from $10 a sq ft. to $50 a sq ft.
  • Typical space requires a minimum of 600 sq ft. maximum of 2000 sq ft. Average store about 1200 sq ft.
  • If a store is 1000 sq ft at $30/sq ft, then the monthly rent is $1000 X $30 = $30,000 divide by 12 months = $2500/mo
  • Utilities – Again, tough to say because it depends on how many machines, etc. But an average store’s power bill will run around $1,000.
  • An average store will need a 300 amp panel

Neil Williams
President

KeyWord Farm, LLC
www.TurnKeyParlor.com
877-817-5716
877-632-2210 (fax)
sales@turnkeyparlor.com
BLOG My Humble Beginnings in Paradise


Frozen Yogurt Product Cost and Suggested Selling Prices



Are you curious to know about the product cost and suggested selling prices of Frozen Yogurt? This article is an excerpt from our FREE Soft Serve Frozen Yogurt Business Guide – Click the book cover below for details on how to download for free.

Product Cost and Suggested Selling Prices

Liquid vs. Powder Mixes

Advantages of Powder:

  • Dry Storage – No need for storage equipment that requires electricity
  • Theoretically easier to source – no need for supplier to have frozen distribution capabilities

Disadvantages of Powder:

  • Might be more expensive than buying frozen liquid mix
  • You need more ingredients – skim milk, filtered water
  • Takes longer – need to mix it – about 15-20 minutes per batch
  • Labor intensive – employee needs to mix
  • Consistency can be a problem. If mixed by different employees, they might make each make it slightly a different tasting product.

How does the powder product work?

  • In short, employee uses approximately one pound of dry mix, corresponding amount of flavoring mix, 2 gallons of skim milk and ¾ gallon of filtered water. Put all this in a food grade plastic 5 gallon bucket and mix with a free standing motorized mixer.
  • The above will yield approximately 3 gallons of product, which is the appropriate size hopper for a typical self serve shop.

LIQUID MIXES

Advantages of liquid (frozen, then defrosted) mix:

  • Less labor necessary – just pour mix into machine
  • More consistent – pre-mix at factory means you don’t have to worry about flavor variations
  • Less materials – no need to source skim milk on a regular basis or worry about filtered water sourcing
  • Possibly less costly than using powder

Disadvantages of Liquid Mix

  • Need freezer and refrigerated stored to manage inventory

Topping Costs – (the million dollar question!)

Fruit, candy, etc.

The toppings will definitely cost you more than the yogurt. A range is between .10 and .40 cents per ounce – so be very careful in what toppings you choose to offer, since your retail price per ounce is fixed between 35 and 50 cents per ounce.

The other “wild card” or “million dollar question” is what the ratio of yogurt to toppings is for the typical customer. In other words, if you’re paying 7 cents an ounce for the yogurt and 20 cents an ounce for the topping, you will be a lot more profitable if the customer goes mostly with yogurt. The good news is that they do. A typical breakdown of yogurt/topping is 75% yogurt 25% topping.

After you’ve been open for a month, you will have a much clearer picture of your ratio. Upon further analysis, you can decide if you need to raise the per ounce retail price a few pennies.

Where to buy toppings? Costco, Sams, Restaurant Depot, Target, Walmart, Grocery store, etc. Basically, find somewhere that is convenient to buy from on a daily basis and sells candy and fresh fruit at the low prices.

  • Average serving sizes
  • Typical ring is 8 ounces. At .45 per ounce = $3.60

Neil Williams
President

KeyWord Farm, LLC
www.TurnKeyParlor.com
877-817-5716
877-632-2210 (fax)
sales@turnkeyparlor.com
BLOG My Humble Beginnings in Paradise


The Players – Your Options Opening a Frozen Yogurt Store: Franchise, Licensing, Straight Purchase



Are you wondering what your options are for starting a Frozen Yogurt store? This article is an excerpt from our FREE Soft Serve Frozen Yogurt Business Guide – Click the book cover below for details on how to download for free.

The Players

  • 3 Options – Franchises, Licensing deals or Straight Purchase with no strings attached.

Franchises:

Legal Disclaimer: This information is not a franchise offering for any of the companies listed below and should not be construed as such. We have gathered this data independently and do not guarantee nor assume liability for incorrect data. We recommend that if anyone is seriously interested in pursuing any of these franchise opportunities, that they review that franchise’s Federal Disclosure Document (FDD) with an attorney and accountant.

The franchise route – Is it the safest bet?  Maybe, but definitely the most expensive.

Who’s out there?

Menchie’s

100% Self Serve Concept

Maybe the cream of the crop. Great floor designs – worth looking at in person to see what they are doing. Great fresh fruit topping bars, great looking candy topping displays.

Total Investment: $340,000-$400,000
Initial Franchise Fee: $40,000

Royalty Fee: Not available (we believe it is around 6%)
Advertising Fee: Not available

Franchise Units

Year U.S. Franchises Canadian Franchises Foreign Franchises Company Owned
2010 38 0 0 4
2009 12 0 0 3

Red Mango

Primarily Full Serve Concept, moving toward Self Serve Concept

Total Investment: $264,500-$435,000
Initial Franchise Fee: $25,000-$35,000
Royalty Fee: 6%
Advertising Fee: up to 4%
Term of Agreement: 10 years

Franchise Units

Year U.S. Franchises Canadian Franchises Foreign Franchises Company Owned
2010 65 0 0 1
2009 48 0 0 5
2008 36 0 0 8
2007 8 0 0 1
2006 0 0 0 0

Yogurtland

Self Serve Concept

Total Investment: $350,000-$400,000
Initial Franchise Fee: $35,000
Royalty Fee: 6%
Marketing Fee: up to 2%
Term of Agreement: 10 years

Franchise Units

Year U.S. Franchises Canadian Franchises Foreign Franchises Company Owned
2010 85 0 5 6
2009 57 0 2 4
2008 25 0 0 3
2007 1 0 0 2
2006 N/A N/A N/A 1

Freshberry – Self Serve

Total investment: $165,750 – $386,200
Franchise fee: $25,000
Ongoing royalty fee: 6%
Term of agreement: Term of agreement not renewable

Franchise Units

Year U.S. Franchises Canadian Franchises Foreign Franchises Company Owned
2010 16 0 11 0
2009 5 0 0 1
2008 0 0 0 1
2007 0 0 0 0

Orange Leaf

100% Self Serve Concept

A solid player, with a relatively small initial franchise fee.

Total Investment: $210,000-$356,500
Initial Franchise Fee: $12,000
Royalty Fee: Not available
Advertising Fee: Not available

Pinkberry

Arguably the most established successful franchise.

Primarily Full Serve Concept, moving toward Self Serve Concept

Seems to have much more stringent requirements, starting with:

Minimum Liquidity: $400,000 ($200,000 per store)
Minimum Net Worth: $800,000 ($400,000 per store)

Total Investment per store: $300 – $450,000 per store
Initial Franchise Fee: $45,000
Royalty Fee: 6%
Advertising Fee: 2% local +2%Nat’l

Licensing

This is “almost” a franchise deal, but with more flexibility. You basically buy a name brand and the concepts.

Tuttifrutti for example, charges a $25,000 fee and zero ongoing royalties. For this, you get to use their name, the designs, marketing tools, etc. They also help you with machines, layouts, etc.

This is an attractive concept, but you are limited in your territory and have to shell out cash for every store you open. In other words, you pay $25k and they help you get the first store open. If you want to open a second store, that fee might be $20k, then $18k for the 3rd store and so on.

Like the franchise concept, it is comforting to have a group behind you with the “know-how” to get you started without having to reinvent the wheel.

But don’t be misled. You will need your own architect, contractor, etc. TuttiFrutti will simply help you determine what a good location is, and act as consultants. The key services that architects and contractors provide are out of your pocket in addition to the $25k licensing fee.

In summary, this seems like a pretty good deal, but beware. Make sure you know what kind of pricing you are going to pay for the product mix, etc.

STRAIGHT PURCHASE:

(True Independence) – No money down, no royalties

Going forward as an independent is one of the most attractive choices. After all, how hard can it be? Do you really want to be fully committed to any type of contract that limits your territory, creativity and makes you sign an iron clad contract that seems to protect everyone but you? That sounds harsh, but you really need to watch what you sign when you go any other way than as an independent.

There are suppliers out there who will sell you frozen yogurt liquid mix or powder. The liquid mix is the easiest to deal with. Simply pour the mix into the hopper and that’s it. The machine does the rest.

Dreyer’s/Edy’s, Honey Hill Farms, Yocream and others are out there.

I personally believe that Dreyer’s/Edy’s is  the best choice if you are going to go in this direction.

Why is Dreyer’s/Edy’s frozen yogurt mix a great choice?

1) Zero fees

2) Dreyer’s/Edy’s offers marketing materials that are beyond what others will provide. This option gives you the best chance to replicate what the franchises are doing.

3) You can buy the mix and choose to use the Dreyer’s or Edy’s name or choose to create your own brand and call it whatever you want with no strings attached.

4) National distribution is also key. If you don’t have easy acess to the product you choose to go with, count on paying more to ship it to your location in large quantities. This makes it harder to manage inventories, ordering, etc. Dreyer’s/Edy’s has a various distribution alternatives across all markets nationwide. And the pricing is aggressive in comparison to others we’ve seen.

 

Neil Williams
President

KeyWord Farm, LLC
www.TurnKeyParlor.com
877-817-5716
877-632-2210 (fax)
sales@turnkeyparlor.com
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