With frozen yogurt maturing into a billion-dollar industry, we’re doubtful that cooler seasonal temperatures will slow down the “froyo” craze.
In an article posted on their website, “Frozen-Yogurt Franchise Fight Heats Up,” entrepreneur.com looks at how the frozen yogurt players differentiate themselves, based upon creative concepts presented at this past summer’s International Franchise Expo in New York City.
Entrepreneur.com spoke with Dennis Bok, the co-founder and CEO of New Haven, Conn.-based FroYoWorld. Bok said, “Kids drag their parents into the FroYoWorld stores because they like the smiling franchise mascot, ELFY, an acronym for “everybody loves frozen yogurt.”
Each month, customers are introduced to new proprietary flavors, such as blood orange, strawberry tart, and graham crackers and crème. Bok sees tart flavors more popular in urban areas, and more traditional flavors popular in the suburbs.
Entrepreneur reports that there are currently 30 FroYoWorld franchise locations open, and another 30 in the pipeline finalizing leases and under construction. According to Bok, the highest-grossing franchise had annual revenue of $1.35 million.
Eric Casaburi, the founder of Coltsneck, N.J.-based Let’s Yo, tells Entrepreneur.com that his “frozen-yogurt franchise focuses on the in-store experience and high-tech marketing techniques.”
Customers have the use of iPads, and each location has jumbo flat screen televisions showing everything from sports to the company’s social media feeds. Let’s Yo has 25 stores and 15 more in their pipeline.
Let’s Yo offers an opt-in paperless rewards program which tracks purchases and offers discounts on purchases stemming from push notifications whenever a customer gets within a mile radius of a Let’s Yo store.
Casaburi speaks to the competitive nature of the froyo market. “In a few years, there will be a shakeout,” he says. “It’s Darwinian.”
Yeh! Yogurt & Cafe
Started by Marvin Gurman in Montreal, Canada in 2008, self-serve Yeh! Yogurt & Café is beginning its move into the U.S. in New York, Massachusetts and California.
“It’s big, big,” says Gurman, president & CEO. He stressed their critical self-serve component to entrepreneur.com. “I wouldn’t even go into the regular businesses,” he says. “Go self-serve or go home.”
Another franchise feature is offerings beyond frozen yogurt like sweet crêpes, waffles, coffee drinks, and even make-your-own cookies. Gurman said, “Maybe it’s because of our roots growing up in Canada, you need some alternative products.”
Major Froyo Players
The article on entrepreneur.com says, “TCBY is the dominant franchise in the industry in the U.S. with almost 18 percent of the market, as of Oct. 2012,” according to the most recent market research available from Los Angeles-based industry research firm, IBISWorld (IBIS).
Their industry report has Pinkberry “close on its heels” with 17 percent of the U.S. market, Red Mango with 15 percent and Menchie’s fourth with 13 percent market share.
Past and Future Growth
The IBIS report on the froyo industry shows that not even the Great Recession slowed things down, and that health concerns led to customers willing to pay a premium for tasty low-calorie options.
Initially, Pinkberry’s tart flavors gave the market a second wind, followed by further increased demand as serve-yourself chains gave dieters the opportunity to limit portion sizes.
IBIS projects consumer discretionary spending to return to pre-recessionary levels and health awareness to further accelerate the industry. One caveat is that “while there is expected to be growing demand for the frozen treat, pressure to sell it more cheaply will limit the pace of new-store growth.”
IBIS predicts the U.S. frozen yogurt industry, including both franchises and individual stores, to reach $931.5 million by 2017. That’s very hot, indeed.
Given the strong presence Sintel Systems has in the frozen yogurt segment of the restaurant POS marketplace, we share these findings with our customers and franchise hopefuls looking for key opportunities.
We also happily share our vast experience and expertise in the frozen yogurt market sector and geographic growth trends with startup owners in order to help them make the best decisions from the very beginning.
Read the full Entrepreneur.com post here.
If you are interested in learning more about Sintel’s POS systems and how our knowledge and support can impact your future success, call us for a complimentary phone consultation.
Sintel Systems is the only full-service provider of tailored Point of Sale systems across retail, restaurant and service industries, including frozen yogurt shops, pizzerias, sushi restaurants, cafés and retail stores.
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