02-21-2013

FR AN CHISE

P R O F I L E

ALEX SMITH

FRESHNS

Overview of Freshns
Freshns is currently the largest yogurt and smoothie company in the United States. Freshns 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. Freshns 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. Freshns is committed to providing customers with fuel for the

body & mind, nutritious yet delicious products such as frozen yogurt, smoothies, salads, and crepes. Freshns is a privately held company headquartered in Atlanta Georgia. The CEO is John Stern, and Steve Kibler is the VP of Business Development.

SMOOTHIES

CREPES

SALADS

Part 1: Entrepreneurship
Freshns was founded in 1985 as Freshns Premium yogurt. Since that time, they have been continuously working to provide their customers with a unique and innovative product mix that satises both taste and nutrition. Their rst store only served soft serve yogurt. Within a year of opening that rst store, another location was opened in Atlantas Lenox Mall. In 1987, the rst sugar and fat free soft serve yogurt was introduced to the U.S. by Freshns. The 1990s saw continued growth, with the rst nontraditional licensed franchise of Freshns opening in Emory University in Atlanta, the expansion of their smoothie products, and a corporate partnership with Met-Rx, who provided Freshns with nutritional supplements and boosters. In 2003, Freshns introduced the rst low carb smoothie product to the U.S., followed in 2005 by the rst sugar free & fat free smoothies. In addition to their rapid U.S. expansion, Freshns 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 specic franchise advantages offered by Freshns 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 Freshns, such as costly royalty payments, since Freshns does not impose such fees on its franchisees. Like many franchises, other benets include an established support network, recognized name, and training provisions, plus a fairly low startup risk.

Part 2: Marketing & Advertising

Freshns 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 arent likely to see a Freshns television commercial, the Freshns brand is still clearly recognizable due to their marketing. Freshns 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 Freshns 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 freshns with the es 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 Freshns 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, Freshns 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 Freshns mascots, featured in the pictures below, are also a part of the companys 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

Freshns 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 denes 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, Freshns signicantly 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 Freshns 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 Freshns store openings. Despite their silliness, the two mascots help to reinforce the idea of the fresh ingredients used in Freshns products.

Part 3:Operations Management

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 Freshns 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 efciently. Because there are over 1,200 Freshns 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 Freshns, 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 Freshns franchise locations. Two of the main distributors for Freshns include US Food Service and the Performance Food Group of allied distributors. By having the food distributed to the regional hubs, Freshns 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 Freshns location needs. Advantages include the burden of determining the logistics of getting the products to each location in a timely fashion being removed from Freshns 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 Freshns 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 Freshns, and they cannot make specic 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 4: Costs
Freshns is particularly unique when it comes to the costs of starting and owning a Freshns franchise. Unlike most companies, Freshns 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 Freshns 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 Freshns does not provide any nancial 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 nancial requirements for opening a Freshns location. These include a minimum capital investment of $150,000 dollars. In addition to this, there will be buildout costs of modifying the space in which the location will be placed, since most Freshns 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 (xed+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 5: Human Resources

As with many other food service franchises, Freshns relies upon many dedicated workers to put together its nal product and to interact with its customers. These employees are a direct link to the consumers, and as such, Freshns places a high level of importance in training these people for jobs at Freshns franchise locations. Freshns calls its employee training program Freshns 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. Freshns 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 6: References
"Freshns Corporate Fact Sheet." Freshns. ComN.p., 02 01 2013.
Web. 21 Feb 2013. Kibler, Steve. "Freshns Franchise Information." Message to Alex Smith. 18 02 2013. E-mail. "Freshns Marketing Information." Freshns.Com Freshns, 02 01 2013. Web. 21 Feb 2013. "Freshns: Right Fit for You? Information Page" Freshns.Com Freshns, 02 01 2013. Web. 21 Feb 2013. All images courtesy of Freshns.com & Google Images.