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Jamba to refranchise 114 units

Jamba to refranchise 114 units

Fresh juice platform boosted 3Q same-store sales

Jamba Inc. plans to refranchise about 114 company-owned units in California during the first half of 2015, accelerating its move to a more asset-light business model, the company said Tuesday after reporting third-quarter earnings.

James White, Jamba’s chairman, president and chief executive, said once the refranchising goal is met, the brand will be more than 80-percent franchised, a move designed to lower costs as the chain attempts to double its unit growth. Jamba plans to add 500 domestic units over the next five years.

The growth potential of the fresh juice platform has sparked franchisee development, White said. Increasing sales of its fresh juice and whole food blends helped boost systemwide same-store sales 3.8 percent during the quarter ended Sept. 30.

But the Emeryville, Calif.-based operator swung to a loss, largely due to $2.3 million in upfront costs tied to expanding the fresh juice platform, outsourcing technology services, purchasing 23 franchise units during the quarter and an ongoing refranchising plan.

Adjusting for those expenses, net income was $600,000, or 3 cents per share, for the quarter. Revenue also declined as the company refranchised.

“Jamba’s momentum continued to build in the third quarter as our juice and whole-food blending platform gained traction,” White said. “Our juice sales are up more than three times over last year and we expect sales will continue to grow as trial and awareness increase.”

Sales of fresh-squeezed juice increased from 7 percent of sales in May to 15 percent of sales in September.

The company also announced a share repurchase plan to buy back up to $25 million in shares over the next 18 months.

Jamba ended the quarter with 862 locations worldwide, including 272 company locations, 535 domestic franchise units and 55 international franchise locations. The chain also included about 1,900 self-service JambaGO units.

For 2015, Jamba projected same-store sales growth of 3 percent to 5 percent.


Result: -$1.7 million, or -10 cents per share
(from $2.7 million, or 15 cents per share)


Result: $58.3 million
% Decrease: 5.5% (from $61.7 million)


% Increase corporate: 3.7%

% Increase franchised: 3.9%

% Increase systemwide: 3.8%

Source: Company report

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Contact Lisa Jennings at [email protected].
Follow her on Twitter: @livetodineout

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