02-21-2013 F R A N C H I S E P R O F I L E ALEX SMITH

Freshëns is currently the largest yogurt and smoothie company in the United States. Freshëns has been in business

for over 25 years, and has grown to over 1,200 locations all around the country, with many of its stores being located in airports, colleges, and

universities. Freshëns is a unique company among other franchised companies, in that the process of

becoming a franchisee is much simpler and less expensive than others in the industry. Freshëns is committed to providing customers with “fuel for the

body & mind”, nutritious yet delicious products such as frozen yogurt, smoothies, salads, and crepes. Freshëns

is a privately held company headquartered in Atlanta Georgia. The CEO is John Stern, and Steve Kibler is the VP of Business Development.

Overview of Freshëns

SMOOTHIES

FRESHËNS

CREPES SALADS

Freshëns was founded in 1985 as Freshëns Premium yogurt. Since that time, they have been continuously

working to provide their customers with a unique and innovative product mix that satisfies both taste and nutrition. Their first store only served

soft serve yogurt. Within a year of opening that first store, another location was opened in Atlanta’s Lenox

Mall. In 1987, the first sugar and fat free soft serve yogurt was introduced to the U.S. by Freshëns. The 1990s saw

continued growth, with the first “non-traditional” licensed franchise of Freshëns opening in Emory University in Atlanta, the expansion of their

smoothie products, and a corporate partnership with Met-Rx, who provided Freshëns with nutritional supplements

and boosters. In 2003, Freshëns introduced the first “low carb” smoothie product to the U.S., followed

in 2005 by the first “sugar free & fat

free” smoothies. In addition to their rapid U.S. expansion, Freshëns also has locations in Eastern Canada.

Throughout their history, they have been deeply committed to providing revolutionary products that satisfy their customers on multiple levels. One of

the specific franchise advantages offered by Freshëns is the business niche that they provide for their

franchisees, by having a unique product mix not found elsewhere. Their somewhat limited product mix could be

a disadvantage for some franchisees wishing for a food business that has full meals. However, many of the typical disadvantages of franchising are not

found with Freshëns, such as costly royalty payments, since Freshëns does not impose such fees on its

franchisees. Like many franchises, other benefits include an established support network, recognized name, and training

provisions, plus a fairly low startup risk.

Part 1: Entrepreneurship

Freshëns marketing strategy is primarily focused upon ensuring that their unique products are promoted in a way that is also unique, and is a strong representation of the values and mission of the company. While you aren’t likely to see a Freshëns television commercial, the Freshëns brand is still clearly recognizable due to their marketing. Freshëns website

features a number of ways that they market their products. One of the most prominent ways they market themselves is through their branding, which includes the Freshëns logo. This logo is featured on all of their product cups, and in various points around their stores. Although there is some variation with the tagline on the logos, they all feature the name “freshëns” with the e’s colored orange, the other letters in purple, and two wavy lines above the name in purple and lime

green. Together, the purple, lime and orange make up the Freshëns brand colors, which one will notice on all of their products, on their website and in their stores.

Further continuing their branding and promotion of their brand image, Freshëns website also depicts the uniforms

that are worn by the workers, purple aprons, polo shirts, and hats all featuring the logo. While this may seem like an obvious way in which the company utilizes branding, it is very important for the company to ensure that when customers are in their stores, they are being exposed to brand imaging, since the company does not spend much on advertising. The Freshëns

mascots, featured in the pictures below, are also a part of the company’s brand imaging. When one becomes a franchisee, they receive detailed store design plans, new product development, crew training, ongoing reviews, sales booster programs, a quarterly promotions library, the brand mascots, a marketing handbook & CD, and inclusion in a social networking program.

“TO BE THE LEADER IN THE BETTER FOR YOU CATEGORY FOR QUICK CASUAL DINING”

Freshëns Vice President for Business Development Steve Kibler, who is quoted above, would not specify exactly why

the company does not invest in advertising, but did say that their tag line “Healthy Eating- Better Living” defines their product line of hand-crafted crepes, salads, smoothies, and yogurt. He also stated that the goal of their marketing strategy was to be the leader in their category of the food & restaurant industry, which he called the “better for you” category of “quick casual

dining”. Since there is very little advertising expenditures, there was no information available on advertising fee arrangements. Due to their lack of advertising, Freshëns significantly relies upon their products to promote themselves, and they also invest greatly in their brand imaging. This makes up the foundation of their marketing strategy, which, like their

products and franchise relations, are highly unique within the industry.

MASCOTS

Part of Freshëns marketing strategy includes these two

whimsical and rather ridiculous looking mascots, the banana and the strawberry. They are often seen making appearances at brand-new Freshëns store

openings. Despite their silliness, the two mascots help to reinforce the idea of the fresh ingredients

used in Freshëns products.

Part 2: Marketing & Advertising

As with any food service establishment, supply chain management and operations are a vital part of the business, and

are essential in making sure the franchisees are able to operate properly. Since Freshëns relies upon fresh products such as fruits, dairy products for making frozen yogurt, and fresh ingredients for their salads and crepes, they are highly dependent upon their suppliers to deliver the necessary products on time and efficiently. Because there are over 1,200 Freshëns locations in the United States and Canada, there can be some variance in the suppliers and regional supply strategies, but overall the strategy is

similar.

According the VP of Business Development at Freshëns, Steve Kibler, all of the supplies needed to run the franchises are supplied by 3rd party Broadline food distributors. These distributors stock the proprietary products in regional hubs for direct

delivery to the Freshëns franchise locations. Two of the main distributors for Freshëns include US Food Service and the Performance Food Group of allied distributors. By having the food distributed to the regional hubs, Freshëns suppliers can ensure that each individual franchise location is able to get the products they need on time, despite being spread all over the

country.

There are inherently some advantages and disadvantages to using a 3rd party distributors as a way to procure the products that each Freshëns location needs. Advantages include the burden of determining the logistics of getting the products

to each location in a timely fashion being removed from Freshëns and placed into the hands of an expert company in this area of supply chain management. The franchisees do not have to worry about how the products will get to their stores, and the Freshëns parent company can focus on branding and product development instead of procurement. However, the disadvantage to using a third party distributor could become apparent if that company fails to deliver the products to the stores on time. The

third party distributor takes control away from Freshëns, and they cannot make specific demands about the procurement process. Changes to the process cannot be easily made since the company has little control over the 3rd party supplier.

Part 3:Operations Management

Freshëns is particularly unique when it comes to the costs of starting and owning a Freshëns franchise. Unlike

most companies, Freshëns does not charge its franchisees any type of royalty fees whatsoever. Due to their

locations in colleges, universities, airports, sports arenas, hospitals and co-branded locations, start up costs are minimal. According to the Freshëns

website, becoming a franchisee means that you will not get royalty fees, advertising fees, or franchise fees. As a

result of this, VP of business development Steve Kibler says that Freshëns does not provide any financial

assistance to anyone wishing to open a franchise location. He told me that start up costs vary greatly depending upon the location of the store, but that there

are some relatively minimal financial requirements for opening a Freshëns location. These include a minimum

capital investment of $150,000 dollars.

In addition to this, there will be build-out costs of modifying the space in which the location will be placed, since

most Freshëns locations are placed in existing buildings. Freshens also requires the operator to have the liquidity on hand to provide for the

store build-out, opening inventory, and at least 6 months operating cash. These are the only requirements they have,

which again is very unique within the industry. Their unique concept mirrors their products, which have been

revolutionary within the food service industry. Break even point:

Costs (fixed+var. costs) = Revenues

150,000+.15x=4.85x

150,000=4.7x

31,914.89=x

/ 300 customers avg. per day=

x= 106 days to break even.

Part 4: Costs

As with many other food service franchises, Freshëns relies upon many dedicated workers to put together its

final product and to interact with its customers. These employees are a direct link to the consumers, and as such, Freshëns places a high level of

importance in training these people for jobs at Freshëns franchise locations. Freshëns calls its employee training

program “Freshëns University” and provides this program to all new start up locations. VP of Business

Development Steve Kibler told me that this program is comprehensive and that it covers everything requires to be successful in running a food service

establishment. This includes training in

equipment, product handling, customer service, quality and cost controls, purchasing, inventory management,

marketing, and pricing. Freshëns clearly places a great deal of time, money, and effort into ensuring that each location is staffed with the best employees, and

that its employees and managers alike are well-trained in the day-to-day operations of the business. One of the

main advantages of the corporate training programs is that all employees at every franchise location are trained

the same way, so customers can expect the same service at each location. A possible disadvantage of this is that the store managers cannot provide

additional training to their employees.

“EVERYTHING REQUIRED TO BE SUCCESSFUL IN A FOOD SERVICE ESTABLISHMENT”

Part 5: Human Resources

"Freshëns Corporate Fact Sheet." Freshëns. ComN.p., 02 01 2013.

Web. 21 Feb 2013.

Kibler, Steve. "Freshëns Franchise Information." Message to Alex

Smith. 18 02 2013. E-mail.

"Freshëns Marketing Information." Freshëns.Com Freshëns, 02 01

2013. Web. 21 Feb 2013.

"Freshëns: Right Fit for You? Information Page" Freshëns.Com

Freshëns, 02 01 2013. Web. 21 Feb 2013.

All images courtesy of Freshëns.com & Google Images.

Part 6: References