Franchises or Independence – Frozen Yogurt Business
Hey Froyo friends!
I thought it would be good to do a post on your options if you’re looking to open a frozen yogurt store. you essentially have three options – Franchises, Licensing Deals or Straight Purchase with no strings attached. In this post, I’ll go through the pros and cons of these options so you can figure out what may be the best fit.
The franchise route – Is it the safest/simplest bet? Maybe, but definitely the most expensive. Who’s out there? Well, the main frozen yogurt franchises are Menchie’s, Red Mango, Orange Leaf, Yogurtland, Freshberry and Pinkberry. All of the franchises start out with an initial franchise fee. These can range anywhere from $12,000 to $50,000 and that does not even scratch the surface of what the total investment will be. Total investments of these stores can range anywhere from $170,000 to $500,000. These numbers are not exact and they all vary from franchise to franchise.
While very similar to a franchise deal, with licensing you essentially are buying the name concepts and the name brand. One example is Tuttifrutti. They charge 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 what machines to buy as well as what your store layout should look like.
This is an alluring idea, but your creativity is still confined and you have to hand out more cash for every new store you open. Meaning, 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.
Licensing is appealing because similar to the franchise it is reassuring to have a company behind you with experience in the business if you’re new to all of this.
But don’t be mistaken. You will still need your own architect, contractor, etc. TuttiFrutti will simply help you decide what a good location is, and act as consultants. The essential services that architects and contractors provide are out of your pocket in addition to the $25k licensing fee.
Overall, this seems like a pretty good deal, but be careful and aware. Make sure you know what kind of pricing you are going to pay with the product mix, etc.
No money down, no royalties with real independence.
I personally believe that the direct purchase is the best way to go. Do you really want to be tied into a contract that limits your ideas, creativity and legal abilities? Or do you want to go into the business where you can flourish with ideas that are purely and truly your own? Although franchise businesses are successful and have their own notoriety, people love the appeal of supporting a small business that has made their way through their own ideas, name, branding and marketing.
There are many amazing suppliers and distributors out there who will sell you frozen yogurt mix. There are two types, liquid and powder! The liquid mix is the easiest to deal with. Simply pour the mix into the machine and it does all of the work.
On this site I will be mostly reviewing mixes, machines, marketing, branding and it takes to run your own independent frozen yogurt store vs. following the rest of the crowd with franchising and licensing!
Hope you enjoyed this post my froyo loving friends!
Peace, love & Froyo,