<blockquote>“Frozen yogurt in the current days is used a lot like ice cream, and served in a wide range of styles and flavours. A lot of companies allow consumers the option of adding several toppings, from bananas to strawberries, or ordering their frozen yogurt in cones or cups. Certain companies produce sugar-free varieties. Frozen yogurt made by a few chains is tarter and similar in taste to the original recipe, whereas other companies concentrate on preparing their frozen yogurt taste similar to ice cream.”
~ From Market Data Forecast</blockquote>
H.P. Hood is credited with developing the first frozen yogurt in the 1970s in the United States as a soft-serve treat called “Frogurt.” Frozen yogurt is a frozen dessert made of yogurt and other dairy, and sometimes non-dairy, products. Frozen yogurt is similar to ice cream in look, texture, and flavor and is usually soft served. Frozen yogurt has traditionally been deemed a healthier treat compared to other frozen snacks because it uses milk instead of cream.
The popularity of frozen yogurt (also referred to as FroYo) really gained momentum in the 1980s when the founders of TCBY observed consumers were turning towards the sweet treat that was considered healthier, but still tasted like ice cream. First opened in 1981, TCBY was able to open over 100 locations within its three years.
Frozen yogurt franchises experienced considerable success in the United States until a drop off in the late 1990s. By the mid-2000s, however, the industry began to reassert itself through the founding of fresher, more modern frozen yogurt concepts. Just like in the 1980s, the increase in health-conscious consumers was a main contributor to the frozen yogurt boom of the 2000s.
Currently, the market size of the frozen yogurt store industry in the United States is estimated to be at $826 million (annual revenue). While TCBY might’ve been the first, and maybe still is the most recognizable name in frozen yogurt franchising, the industry doesn’t have a clear market leader. In fact, according to IBISWorld, no frozen yogurt shop has a market share of over 5%. Leading franchises in the industry include (in alphabetical order):
- Golden Spoon
- Menchie's Frozen Yogurt
- Orange Leaf Frozen Yogurt
- Pinkberry
- Red Mango
- Sweet Frog
- TCBY
- Yogli Mogli
- Yogurtland
Like their ice cream counterparts, frozen yogurt franchises also commonly have menu offerings that extend beyond FroYo to stave off seasonality. These menu items can include frozen yogurt cakes and pies, milkshakes, parfaits, and related items.
Frozen Yogurt Customization
An increase in customization concepts throughout society in general has had a dramatic impact on the overall industry.
The personalized consumer experience has become increasingly important to franchisors across virtually all industries. Studies of generation preferences (e.g. Millennials, those born between the early 1980s and late 1990s) have concluded customization is very important to current and up-and-coming generations.
Regardless of the item they are purchasing, customers seek commercial experiences that cater to them specifically. As a response, a myriad of choices are available in frozen yogurt shops, where customers can choose from various flavors and toppings. For example, Menchie’s has been known to have 100 rotating yogurt flavors and 70 rotating toppings to choose from at a given time.
Creating new flavors to keep customers coming back is a tactic employed by frozen yogurt franchises to keep customers engaged.
According to the International Frozen Yogurt Association, a significant number of new flavors get introduced and rotated in and out of shops every year. For the year of 2020, “fruit flavors led the way, accounting for 38% of the new flavors. Baked goods/dessert inspired flavors continued to be popular, accounting for 30% of new flavors, with 4 new cheesecake flavors and 2 non-cheesecake flavors with cream cheese. Candy flavors represented 14% of new flavors, tied with chocolate (14%), and followed by coffee (6%).”
Creating an Inviting Environment
Frozen yogurt franchises—like other food franchises—fall under the umbrella of retail franchises. While price often decides how and where consumers spend their money, there are other key factors that contribute to the value of a consumer’s experience.
Enjoyable atmospheres created for consumers often increase the value of the experience and defray associated costs. The cost of a frozen yogurt purchase becomes reasonable when the experience is enjoyable, customizable, and uniquely delivered. Much like coffeehouses, the setting of frozen yogurt franchises can attract customers just as much as the actual products being served.
Generations ago, when ice cream parlors were a place where families could enjoy an inexpensive treat, return business was the norm for those interested in enjoying something simple and sweet with familiar faces. Similarly, frozen yogurt franchises today are social gathering settings where people can go to interact and enjoy themselves.
The hope going forward is that pent up demand for socialization following the pandemic will encourage even more gatherings in these spaces. The demand for locations where customers can enjoy themselves in a pleasing environment and interact with friends may just be on the rise again.
Buying a Frozen Yogurt Franchise
Franchisees can increase their chances for success by performing due diligence research to understand the demographics of the area in relation to the business. Areas with families, health-conscious residents, and college campuses are often well suited for franchises in this industry.
The range of investment between different frozen yogurt franchises can be due to the variations in business systems and execution requirements.
Initial costs associated with opening a franchise include the franchise fee, training expenses (such as travel and living expenses, not the actual training courses), grand opening marketing costs, and more.
A significant cost within the initial investment is the franchise fee. This part of the overall initial investment grants the franchisee the right to use the franchisor’s trademarks and other branding. It also gives the franchisee access to the franchisor’s business system, including training opportunities.
FYI: National Frozen Yogurt Day is observed on February 6th. June is National Frozen Yogurt Month, and has been observed since 1993.
Facts About Frozen Yogurt Franchises
According to the International Frozen Yogurt Association, the peak of FroYo production was in 1995, with an annual output of 152.1 million gallons. After dipping a little in the early 2000s, its popularity has revived and thrived over the past decade.
Frozen yogurt is often considered a healthy treat compared to most other frozen snacks like ice cream and highly-sugared sorbets. Frozen yogurt uses milk as its base instead of cream, which makes it considerably lower in fat than ice cream.
Frozen yogurt is lower than calories and fat than ice cream, but it has the same amount of protein. However, some FroYos are higher in sugar (with a higher carbohydrate content). However, yogurt often has a high probiotic content (a fermented, gut-friendly bacteria) which is believed to contribute to gut health.
The increase in health-conscious consumers in the United States has led to a distinct resurgence in the FroYo trend over the past decade. The typical customer for a frozen yogurt franchise is the young adult female aged between 18 and 35 years of age.
The cultured milk content in FroYo gives the product a tangier flavor than ice cream. However, less tangy yogurt varieties such as strained Greek yogurt tend to have a more neutral taste.
Frozen yogurt has a very similar texture to soft-serve ice cream and can be served in cones, cups, or bowls.
Many frozen yogurt franchises offer a range of delights to tempt customers into their stores, from a range of unique fruity (and naughty) flavors to smoothies, cookie dough, and vitamin-rich juices.
Franchising Vs. Independent
Like all franchise opportunities, frozen yogurt franchises require a cash investment, starting at around $50K. Most of us would need to seek funding to achieve that type of collateral, and this is another reason to consider the franchise model.
Banks and moneylenders tend to favor the franchise model because the business has been tried and tested; proven profitable, sustainable, with a good chance of a safe investment return.
Independent companies, however, often fail to achieve decent interest rates on startup funding applications. This is because independent companies starting up without the support of an established partnership are riskier: they often lack the business acumen offered by a franchise partner. Also, the business model is yet to be proven viable.
For this reason, independent companies can be slow to recoup their initial investment. In fact, almost half of all indies go out of business within three years as they struggle to penetrate the marketplace and make back their initial outlay.
On the other hand, frozen yogurt franchises tend to hit the ground running, with a ready-made customer base, access to a tried-and-tested menu, and branding that customers already know and love.
Frozen Yogurt Franchises
Check out Franchise Direct's delightful selection of exciting frozen yogurt franchise opportunities, and see smiles on your doorstep every day.
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