On the Margin
Freshii takes a shot at froyo

Freshii takes a shot at froyo

This post is part of the On the Margin blog.

Is the frozen yogurt fad over? Matthew Corrin thinks so.

Declaring that “froyo is finished,” and that “juice is next,” the founder of healthy fast casual chain Freshii offered owners of frozen yogurt franchises and juice bars the opportunity to convert their locations to Freshii shops. The franchise will waive its upfront fees for those who get approved as a Freshii franchisee.

It’s hardly the first unique offer that Corrin has made in the name of rapid expansion — he once made news by publicly urging McDonald’s Corp. to cobrand with his chain to burnish its fresh food credentials. It also offered discounts during Chipotle’s systemwide closure.

But in this offer, Corrin is publicly declaring the frozen yogurt fad to be finished, all the while targeting owners of such shops as potential Freshii franchisees.

“Thousands of owners of frozen yogurt shops and juice bars are now struggling to stay in business, to no fault of their own,” Corrin wrote. “Fortunately, some of them have come to us and converted their locations to Freshii.”

Frozen yogurt shops were all the rage in the 1980s and 1990s, and then people stopped going and the trend collapsed. It reappeared in 2005 with the emergence of Pinkberry, followed by an army of self-serve frozen yogurt chains, all urged on by makers of frozen yogurt that sometimes held classes for people on how to open their own frozen yogurt shop.

Many of the shops exploded during the recession through franchising, in part taking advantage of a generation of workers looking to be their own boss following mass layoffs.

Such concepts, however, have struggled to maintain that growth. Reports of closures abound. Pinkberry, the concept that started it all, saw its growth stall and its unit volumes decline. The concept was then sold to Kahala Corp. A number of chains have seen unit declines in recent years.

But not all. Menchie’s Frozen Yogurt saw its unit count grow from 270 in 2013 to 394 last year, according to its franchise disclosure document.

In his medium post, Corrin noted that frozen yogurt at one point made up 30 percent of his company’s sales. “But as that fad faded, so did our froyo sales,” he wrote.

He then says the company moved onto fresh pressed juice, which makes up a “significant portion” of the chain’s sales, but only during certain seasons.

But Corrin also says this: “We appreciate the seasonal surges of these on-trend menu categories, but there’s risk in selling just one product line.”

That, for what it is worth, is the biggest risk of any frozen yogurt shop: By selling just one niche product that goes in and out of popularity, operators run the risk of losing sales when consumers lose interest.

Freshii, for its part, has experienced a surge of its own. The chain had just 26 locations in 2012, but finished last year with 108, according to its franchise document. Corrin, who founded the concept in 2005 when he was just 23, clearly wants more.

Whether Corrin’s offer will lure frozen yogurt and juice operators to his concept remains to be seen. But he isn’t going to wait around forever: “The deal melts on Monday, July 4, 2016,” he wrote.

Contact Jonathan Maze at [email protected]
Follow him on Twitter at @jonathanmaze
Twitter.com/jonathanmaze

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