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18 Things You Need to Know About the Orange Leaf Frozen Yogurt Franchise Opportunity
Curious About Orange Leaf Frozen Yogurt’s Revenue Potential (Item 19, FDD)? Click here.
Orange Leaf Frozen Yogurt Franchise Cost
1. The franchise fee for a single Orange Leaf location is $12,000 (about a third of the $35,000 franchise fee for Yogurtland and $40,000 for Menchie’s). Orange Leaf’s monthly royalty is 3% of gross sales (half of the 6% royalty fee charged by Yogurtland and Menchie’s) and their monthly marketing fee is 0.5% of gross sales (a quarter of Menchie’s and Yogurtland’s marketing fee of 2% ).
2. Reese Travis, CEO and part-owner of Orange Leaf, says, “It does a lot of good if we can bring in a franchisee, put a system in place where they can be successful and go do another store, and another store, and another store — not where we burden them with a fee that prevents them from being able to reinvest their capital and help us grow the company.”
3. Orange Leaf has no fixed liquidity or net worth requirements and no application fees. They are willing to work with people of all backgrounds, whether single or multi-unit operators.
4. Matt Wills, director of franchise and brand development for Orange Leaf, says, “We’ve had groups that commit to up to 20 stores and we’ve seen franchisees who have success with the first location and come back shortly after opening wanting to do a multi-unit deal.”
5. Of course, there are trade offs that come with lower fees, particularly in the amount of support that Orange Leaf can afford to provide its franchisees. Orange Leaf employs about 14 corporate employees to support 66 locations, far less than the almost 1:1 ratio at Menchie’s.
6. But Matt assures that one of Orange Leaf’s primary goals is to provide in-depth support to its franchisees so they have the tools they need to be successful in their markets. The franchisee is assisted with site selection, construction and design, product supplies, training, and marketing from opening day through daily operations.
7. Like Yogurtland and Menchie’s, Orange Leaf sells yogurt by the weight using a self-serve model. Customers choose either a 16- or 24-ounce cup and fill it with as much yogurt and toppings as they please. At any given time, customers can choose from among 16 different flavors. Their yogurt flavors are not proprietary (unlike Yogurtland) so their selection is very similar to Menchie’s (with traditional favorites like chocolate, peanut butter, cookies and cream, strawberry, and coconut.)
Customers pay 45 cents per ounce.
8. According to Orange Leaf’s management, they will not introduce a product (such as smoothies) that doesn’t mesh with their brand. When they do bring in a new item, it will have to fit the model of a self-serve, easy to manage concept because that’s where they are leading.
Orange Leaf Frozen Yogurt Franchise History and Growth
9. Orange Leaf was founded in 2008 by two San Francisco partners, who introduced the self-serve frozen yogurt model to the Bay Area.
10. After opening an Orange Leaf store in the cities of Norman and Lawton, Oklahoma., and Wichita Falls, Texas, in early 2009, Reese Travis eventually approached the founders about buying the corporation from them. The transaction was completed on April 2, 2010, and Reese moved the headquarters of Orange Leaf to Oklahoma.
11. The franchise had 15 stores when Reese and his partners bought it. Now there are 66 across the nation, another 25 under construction and an additional 75 at some stage of financial commitment. Within the next several months, Orange Leaf also expects to open its first international store.
12. From application to grand opening, the average Orange Leaf franchise process takes about five months.
13. Orange Leaf owns 12 corporate stores — six that are open and six soon to be opened. The rest are all franchised through people who found Orange Leaf themselves. Matt says the company’s growth has been organic thus far. Franchisees will approach the company after experiencing steady growth and choose to open more stores, just like Reese did.
15. Reese says, “If we continue our growth rate, we should pass the other players in the (self-serve yogurt) market. Our goal is to open 300 stores in three years. If we keep up the momentum and grow at the rate that we’re growing, there’s no reason why we shouldn’t exceed that goal.”
16. The company’s short-term goal is to double its 2010 growth in 2011 and open 100 stores, whether that’s in the United States or internationally.
Orange Leaf’s Strategy of Customization Extends to Its Stores
17. Orange Leaf maintains its brand identity from coast to coast with slight variations to mesh with each community. For instance, while each store’s interior is white with pops of orange, Travis encourages store owners to incorporate murals of community landmarks or local high school mascots inside the store.
18. Along with various locations come a variety of taste preferences. Matt says, “Stores serve flavors that are most popular in their respective markets. The benefit of extending this freedom to our franchisees is that they can ensure that the unique tastes of the community are being addressed.”