Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

  • Anytime Fitness
  • CruiseOne
  • Firehouse Subs
  • Jimmy John's
  • Massage Envy
  • Menchie's
  • Orange Leaf Frozen Yogurt
  • Planet Fitness
  • The UPS Store
  • Yogurt Land
  • And Hundreds More...

No, thanks. I'm not interested in uncovering the actual earnings of hundreds of franchises at this time.

FDD Talk: Yogurtland’s Average Unit Sales and Operating Profit for Affiliate-Owned Stores in 2010 (Updated with Response from Larry Sidoti, VP of Development and Operations)

by Franchise Chatter on August 28, 2011

in Franchise Earnings, Frozen Yogurt Franchises



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Average Annual Net Sales for Yogurtland Franchise Locations and Affiliate-Owned Stores (2010) – Item 19

(Ambrosio’s note, September 15, 2011:  Larry Sidoti, VP of Development and Operations for Yogurtland, has informed me that there was an error in Item 19 of their 2010 FDD that has since been corrected.  I’ve updated this blog post to show the correct figures).



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Are Frozen Yogurt Franchises Turning Sour

{ 32 comments… read them below or add one }

Lars Crampton September 6, 2011 at 10:07 pm

I saw that figure also, I was a little confused about it as well. Still strong net sales figures.

Reply

Froyo December 21, 2011 at 3:36 am

$803,619 the average net sales per store in 2010.

This means they are making $2296 per day (if they were open 350 days per year) or $191 per hour (if open 12 hours per day).

If their average sale was $3.12 this means they get 61 customers per hour or jsut over 1 customer every mintue!
*Average sale based on 8 ounces per customer at .39 per ounce.

Have I done my calculations wrong as I find it hard to believe they get 1 customer per minute/12 hours straight per day/7 days per week? Can anyone fill me in??

Reply

Ambrosio December 21, 2011 at 5:25 am

Hi there,

I was actually very surprised to learn that the frozen yogurt shops in general, and Yogurtland in particular, are doing that much in annual revenues. We weren’t doing nearly that much in my UPS Store, and we had big ticket transactions!

I don’t dispute the numbers, just very impressed by it. I guess most retail stores are open more than 350 days a year (I remember only a handful of holidays when we were closed, and I suspect a business like a frozen yogurt shop would be open when most other businesses are closed, except for Christmas and Thanksgiving.) When I visited Yogurtland, I remember my bill being over $5 and that was without toppings — and I wasn’t even hungry (lol)! I imagine that the average ticket would be higher than $3.12.

Let’s say for the sake of argument that the average ticket is $5, and keeping all of your other assumptions constant, that would come out to about 38 customers an hour, which doesn’t seem too unreasonable. At an average ticket of $6, that gives us about 32 customers an hour.

I have no personal knowledge of their average ticket, just speculating based on what I remember paying. Any other thoughts?

Best regards,

Ambrosio

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Natasha February 6, 2012 at 6:26 am

Hi I was wondering if it would be possible to find sales figures on any Frozen Yogurt Stores such as Orange Leaf, Wow Cow, Cups or Tutti Frutti, etc. ?

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Ambrosio February 6, 2012 at 6:54 am

Hi Natasha,

So far I’ve done FDD talks on Orange Leaf, Yogurtland, Menchie’s, Nubi, and Cultivé Yogurt (please check the archives). I’ll see what I can dig up on Wow Cow, Cups, and Tutti Frutti. Thanks for checking in.

Best regards,

Ambrosio

Reply

Mr Freeze February 17, 2012 at 7:00 am

Hi there,

but how are the sales per month, escpecially in cities with a real winter like NYC? Let’ take the turnover of $855.000, how do we split it up (eg 3 sommer months with $120K, 3 winter months with $35K and 6 autumn/spring months with $65K)?

Reply

Ambrosio February 17, 2012 at 7:21 am

Hi there,

Unfortunately, Yogurtland doesn’t break down annual revenues by month — most franchisors do not. (Orange Leaf discloses monthly sales for each of its stores, but only because it had very few stores open during the reporting period). It would be nice to know the monthly sales of stores operating in cities with harsh winters. But the only way to get that information is by calling the specific franchisees directly — and that’s, of course, if they are willing to talk.

Thank you for your question. Wish I had more information to share.

Best regards,

Ambrosio

Reply

tina February 21, 2012 at 8:56 pm

Do you have email? i would like to ask some questions. Thanks

Reply

Ambrosio February 21, 2012 at 9:14 pm

Hi Tina,

Yes, you can reach me at franchisechatterblog@gmail.com

Ambrosio

Reply

Tony April 24, 2012 at 12:55 pm

Ambrosio,

Great job on the blog. I have added it to my regular reading!

I visisted a Yogurtland last night because of your articles. The operation was busy and the product was very good. I asked the employees a few questions (when they weren’t busy) and they were very happy working there. They also told me it was very slow for them.

The annual operating profit of $196,363 concerns me because it’s “before deducting franchise royalty fees, cost of financing, and other franchise expenses”. Aren’t most of the item 19 claims after those costs? Those are some extremely high cost items and will affect any net profit considerably, possibly leading to a situation (once again) where the franchisor is the only one making any money – while assuming very little of the risk…

Also, they employeed many more employees than I expected, 8-10 (5 on duty).

Thanks again!
Tony

Reply

Ambrosio April 24, 2012 at 4:13 pm

Hi Tony,

Thanks so much!

In my opinion, the annual operating profit (before deducting franchise royalty fees, cost of financing, and other franchise expenses) of $196,363 is very impressive. You can easily deduct royalties (6% of gross sales) from the operating profit. As for cost of financing, this is never included in the computation of operating profit (earnings before interest, taxes, depreciation, and amortization or EBITDA), because this has nothing to do with how much the stores are earning from operations. Note that Yogurtland has already deducted most of the major expense items like

food and paper costs ($333,700)
labor ($132,587)
benefits ($24,274)
utilities ($20,696)
repairs and maintenance ($8,509)
supplies ($15,612)
rent ($78,142)
other controllable expenses such as insurance and legal/professional fees ($8,241)
licenses and fees ($19,051)
advertising ($17,085)

All other franchise expenses are relatively minor.

I’m actually quite surprised that the store employs as much as 8 to 10 people. This tells me that the store is typically very busy. If I were the owner, I would try to find a way to reduce this number, but this is not the sign of a struggling operation. On the contrary, to me it suggests either a busy, thriving business or a poor operator who can improve profits by operating more efficiently. Either way, I’m not discouraged by the fact that the store employs 8 to 10 people. Frozen yogurt stores typically hire students who only work part-time, so having lots of part-timers makes it easier for the owner to schedule shifts.

I don’t have any skin in this game. But I do call it as I see it. Hope this is helpful.

Best regards,

Ambrosio

Reply

Grant Matheson May 2, 2012 at 9:54 pm

6% of Gross Sales plus 2% of the advertising fund takes your $196,000 profit to $132,000. Not very much at the end of the day.

Reply

JY June 6, 2012 at 5:48 pm

Confused… How does 6% of gross sales + 2% advertising make $196k to 132k?

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Franchise Chatter June 6, 2012 at 5:57 pm

Hi JY,

Gross sales of Yogurtland is in the $800,000 ballpark, so 8% of $800,000 is $64,000 (royalty fee + advertising contribution). Deduct $64,000 from $196,000 to get $132,000.

Best regards,

Ambrosio

Reply

JY June 6, 2012 at 6:43 pm

Perfectly explained. Thank you for clearing that up!

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Franchise Chatter June 6, 2012 at 6:45 pm

No worries. Thank you for visiting :-)

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Kris K June 21, 2012 at 1:01 pm

Ambrosio,

What is the gross profit margin on the sales? In other words if the store makes a sales of $800,000 annually what is the gross profit margin before the expenses.
By the way do you have Yogurland store yourself

Kris

Reply

Franchise Chatter June 22, 2012 at 6:59 am

Hi Kris,

Based on the company’s 2012 FDD, Yogurtland’s gross profit margin is around 65%. I discuss the profit and loss statement in greater detail here: http://www.franchisechatter.com/2012/05/15/fdd-talk-average-net-sales-expenses-and-operating-profits-of-yogurtland-frozen-yogurt-shops-2012-fdd/

No, I do not own a Yogurtland store, nor am I in any way affiliated with Yogurtland.

Best regards,

Ambrosio

Reply

fa June 26, 2012 at 8:00 am

Yogurtland cogs is around 38%.
Stores in high population area with white/asian population do well even in cold weather, but must have good visibility and traffic past store. New Jersey and Denver stores are high sales even though they have cold weather.
Cash flow is good but high startup cost hurt return on investment.
Yes I am franchisee.

Reply

Kris K June 28, 2012 at 6:26 pm

Fa,
Thanks for sharing that information. I do appreciate the same.
Is it possible you could send me your email? I still have couple questions, since you’re a franchise you’ll be able to better address those questions well.
Also is there a person name that I can send the franchise application for CA franchise – I mean the direct source where action will be taken. I know I can submit thro’ company website but it’s not very helpful.

Appreciate your help
Regards

Reply

Gaurav July 5, 2012 at 7:49 pm

Do you know of any other yogurt stores with low initial fee? Something between 100,000 to 200,000? I have found a great location, just need the right yogurt shop,

Reply

Franchise Chatter July 5, 2012 at 9:55 pm

Hi Gaurav,

Among the frozen yogurt franchises I’ve featured on the blog, the one that is positioning itself as a lower cost option is Yogurt in Love. Check out my interview with its founder Sylvan Newby here: http://www.franchisechatter.com/2012/06/04/yogurt-in-love-waives-initial-franchise-fee-for-first-25-franchisees-says-founder-sylvan-newby/

Good luck, Gaurav!

Best regards,

Ambrosio

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Rick G. July 10, 2012 at 9:44 am

Ask Yogurtland Denver if their numbers are still in the 800K-1.5 million range. The answer will probably be NO. The competition is fierce in Denver. Beyond anyone’s imagination. Self-serves, sustaining gross sales over 500K per unit in Denver is probably non-existant except for a select few.

Reply

DJ July 23, 2012 at 5:02 pm

When you are talking about $132,000 of profit after royalties and advertising contribution, is that profit after the cost of a manager? Or are you assuming the owner is the manager and works for free?

Reply

Franchise Chatter July 26, 2012 at 8:00 am

Hi DJ,

This figure is for affiliate-owned stores, and Yogurtland does include management salaries and bonuses in the labor expense category.

Best regards,

Ambrosio

Reply

MA August 1, 2012 at 12:16 pm

Hello Ambrosio,
Great Blog-

I am currently doing some research and interested in being a franchisee of Red Mango. After reading your blog, Yogurtland seems to be doing very well. I was also looking at other yogurt franchise in vegas and NY like Manchies… Can you email me some links where I can have clear figures and a solid knowledge before I decide which one to go with.

thx

Reply

Franchise Chatter August 2, 2012 at 4:02 am

Hi MA,

Thanks for visiting the blog. Have you checked out my FDD Talk membership section? You will find the key financial performance representations of many of the top frozen yogurt franchises there, plus my bottom line analysis. I think it’s a really helpful tool for prospective franchisees.

http://www.franchisechatter.com/memberships/

Best of luck with your due diligence.

Best regards,

Ambrosio

Reply

Rev. Dr. Joseph J. costa October 17, 2012 at 4:43 pm

I am interested in one of your franchises. Please provide me with as much information as is possible,
either email or send mail 494 W. Pine St, Frackville, Pa. 17931

Reply

Michael Robinson April 10, 2013 at 7:50 pm

I am self employed and approaching retirement age. I plan on turning over the reins of my landscape business in SoCal, not selling, and want to remain active in business while living in San Francisco, NorCal.

I have noticed that despite high density, there just are not many FroYo operators in San Francisco, and most are independents who sell organic foods and sweets or coffee. Yoppi on Fillmore in Pacific Hts is the only recognizeable franchise.

Why is that? Is the weather too cold? Are residential areas too old demographically? Are rents too high?

Reply

Franchise Chatter April 10, 2013 at 8:18 pm

Hi Michael,

Thank you for your message.

I lived in San Francisco from 2002 to 2008, and during my time there, I thought the city made it difficult for chain stores to open new units. It’s probably too much of a hassle for most frozen yogurt franchises (most of whom don’t have the resources of Starbucks) to seek approval from the city and the residents. I don’t know if things have changed, but that was the situation when I left.

On top of that is the high rent you mentioned. Frozen yogurt is still somewhat seasonal, and brands like Cold Stone Creamery have struggled in the city, at least that was the case 5 years ago.

It’s interesting you mentioned that most operators are independents that sell other things aside from frozen yogurt. A pure frozen yogurt concept may find it difficult to afford the annual rent in SF.

Also, frozen yogurt shops cater primarily to kids and families, so the demographics of the city combined with the high rent might not be the best fit for a frozen yogurt store. At least, that’s my theory.

What are your thoughts on this?

Best regards,

Ambrosio

Reply

Jack October 30, 2014 at 10:52 am

Hello, do you have Email address to discuss few things about starting a Frozen yogurt business?

Thanks,
Jack

Reply

Franchise Chatter October 30, 2014 at 1:35 pm

Hi Jack,

My email address is ambrosio@franchisechatter.com. Thanks!

Best regards,

Ambrosio

Reply

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