Archive for category: Consulting Category
Used Frozen Yogurt Machines – Good or Bad Idea?March 6, 2013
Frozen Yogurt Store Machines – How many do you really need?February 18, 2013
Frozen Yogurt Store Machines: How many do you really need?
How many frozen yogurt machines do you really need for a self serve store to be successful? Is there a “right” number of machines? Many people struggle with this question.
The number of machines you use in a self serve yogurt store can vary from 3 to 10. The bigger franchise stores like Yogurt Land, Menchie’s and Orange Leaf seem to like the 7 to 8 machine offering. The real question is – will more machines really make you more profitable? I don’t think so.
I can see many reasons why limiting the number of machines to 5 or less will in the end be the most profitable strategy. Other equipment dealers will hate me for saying this, but I really believe it. Sure, I would love to sell you 8 machines instead of 5. But I would prefer that you have a more profitable business, and open three stores that have 3 to 6 machines each. We both end up making more money this way. As an independent, the number of machines you go with will be determined in part by the following factors:
- Size of location: Obviously, you can’t pack 10 machines into a 750 sq ft. space. The machines need about 12″ to 18” between them, and total space becomes a factor considering you need topping counters, register space, back room coolers, sinks, etc.
- Start up Money: If you don’t have enough $, you aren’t going with a high machine number. You might be forced to stick to 3-6 machines in order to keep your total investment under control.
- Competition: Who are you competing against? How many machines do they have? Again, just because you are competing against a nearby store that has 8 machines, do you really need to match the number of flavors they offer? A less expensive option is to offer more toppings than your competitor with more machines.
The question is…………is it really better to go with more machines? There is a certain “WOW Factor” when a customer walks into a store that has 8 machine and 16 flavors of frozen yogurt. And if you have a super high volume location, more machines might be the best, most profitable choice. But going with 3-6 machines can also be wise for many reasons. This number helps minimize your investment, control your utilities cost and run a leaner store. And because this business model is still relatively young, there still isn’t enough data out there to tell me that having that 16 vs. 10 flavors means incremental sales that make up for the added overhead and investment.
Competition is heating up these days. I would rather be the guy with the manageable debt load and lower overhead than the guy that lets his fruit toppings go bad because he’s so worried about losing a nickel to pay his bills. When its all said and done, the lean will survive while the weeding out is happening. Here is another reason you may want to consider limiting your number of yogurt machines. If you line up more than 6 machines, you will need to spend more on air conditioning to ensure the machines don’t overheat. Or you will need to go with a glycol system, which adds about $15k to your investment.
6 or less machines, you can get away with air cooled machines. What is the difference? Air cooled machines are fully self-contained. You don’t hook anything up to them, aside from the power cord. But they create more heat inside your back room. Water cooled machines are cooled by water – or a glycol system. They won’t make your store warmer, but they will cost you $ in water. Air cooled machines cool themselves by blowing hot air out and away from the machines. This means more heat in your store. When 6 machines or less are blowing hot air into your location, the heat is manageable. You can either have your contractor put in an extractor fan, which helps pull the hot air up and outside your store, or you can buy a higher powered air conditioner and over power the hot air. Best bet is to CLEARLY discuss this with your A/C contractor prior to construction. A lot of times a split system A/C is the best idea – so that you don’t freeze the people inside your store while trying to keep the back room at a reasonable temperature. But once you go past 6 machines, going air cooled is a tough call. At the 6 machine or more mark, you still might be able to go air cooled if you have enough space, but it is a little more challeging. So, you’re looking at plumbing 7 or more machines to city water, which means a substantial water bill.
If you want to avoid a high monthly water bill, you have a glycol system installed. This is sort of like the radiator in your car and the glycol is the coolant that runs through it to keep the engine from overheating. This isn’t cheap. It can run about $15k or more depending on installation costs and what system you buy. Stores with 7 or more machines almost always go for the glycol system and the high initial investment. We periodically have used chillers in our inventory, so check with us if you think this might be the route you want to take. In summary, the number of machines you decide to go with will depend on many factors and less machines doesn’t necessarily mean a less profitable store.
Thanks for Reading!
Neil Williams – President of TurnKeyParlor
Make Your Own Ice Cream or Buy 3 Gallon Containers from a Distributor?January 17, 2011
- People like to buy what they are familiar with
- Initial investment is lower – you only have to buy dipping cabinets and storage cabinets vs. a batch freezer, hardening cabinet, dipping cabinets, etc.
- Less machinery means less utilities expense
- Product consistency – making your own can also be consistent if you are the only one doing it, but once you have employees start making ice cream too, it can get tricky to maintain that consistency
- Simplicity – no manufacturing labor – you buy 3 gallon tubs from an ice cream distributor, you drop them in the dipping cabinet and scoop away
- Cost – normal markup on ice cream you purchase from a distributor allows you to make around 70% gross profit when charging what the market will bear. In other words, if you charge $2 for a scoop, your cost is about $.60 for that scoop. When you make your own, the materials cost is much lower. That $2 scoop should cost you more like $.30-$.40. If you make Italian Ices, your cost is even less
- Exclusivity – Only YOU can sell your ice cream. Customers can buy national brands in many parlors and can also pick them up at the local grocery store
- Variety – With an Emery-Thompson Batch Freezer, you can make not only ice cream, but you can also make your own Italian Ice and Gelato.
- Homemade – People love homemade ice cream. Customers like the idea that the ice cream is made fresh and with a local twist to it. Customers like to see and know the owner of the business
- Creativity – You can invent new flavors. You can make changes to the product suit your region’s tastes. You can hold contests for new flavors using social media tools. The options are limitless
- CLICK HERE FOR INFO ON BUYING PLASTIC ICE CREAM CONTAINERS