Comment of TCBY Franchisee on Franchise Chatter

A few days ago, a reader — and current TCBY franchisee — left an insightful comment for my post on the Top Frozen Yogurt Franchises of 2011.  In case you missed it, here’s what Anonymous had to say:

“Am I offended that TCBY didn’t make the numero uno slot on the list? No, but somewhat disappointed.

As a self-serve TCBY franchisee, I’m amazed by the number of self-serve frozen yogurt shops opening across the country. It’s endless. When is it going to stop? I think winter 2011-2012 will tell a lot about the future of the industry, especially for those shops based in colder climate, major metropolitan areas. Eventually, there will be a lot of carnage. No doubt. Ebay will be the ‘go to spot’ to pick up some good deals on used frozen yogurt machines. All the ‘mom and pops’ will not survive. No way.

Aside from that, the independents just don’t have access to the greatest product in the country. TCBY has been setting the bar for

frozen yogurt for over 30 years, and it shows. Their product is by far the creamiest, tastiest, and most healthy. None of that powder-based, icy product with non-palatable aftertaste.

IMHO, Yogurtland has risen to the top because of the ‘new’ name and the price per ounce. Since TCBY took a backseat for a number of years, Yogurtland popped up out of nowhere and kinda took charge. Many people had forgotten about the TCBY name and moved on I guess. Well, TCBY is back. There is a new sheriff in town.

TCBY pretty much created the frozen yogurt industry back in 1981, and now, they must follow everyone else (i.e. self-serve model). Go figure. TCBY’s new store design is amazing. It’s bright, cheerful and inviting. The layout is superb. None of that cramped feeling you get a lot at self-serve shops these days. The customer service is first class. TCBY prides themselves on A+ customer service.

TCBY has a really bright future ahead, regardless of the competition’s expansion. TCBY is a first class operation. I wouldn’t have invested in a company with a weak and small track record and inferior product. 30 years is nothing to mess around with.”

Interview with TCBY CEO Tim Casey on QSRWeb.com

Because of that ringing franchisee endorsement, TCBY has been on my mind.  I wanted to dig deeper to find out if TCBY really offers a differentiated product and experience that would make them the frozen yogurt franchise to beat in 2012.  As luck would have it, I discovered a recent Q&A with TCBY’s CEO Tim Casey on QSRWeb.com, my new favorite restaurant industry website.

There were a lot of juicy bits in the interview, but one thing that really stood out was TCBY’s emphasis on differentiation.  Tim Casey believes that in a segement as competitive as frozen yogurt, “the more points of differentiation you create, the better chance you’re going to have at getting them (customers) to choose your brand.”

So, what is TCBY doing to stand out?

• “One thing we have that nobody else does is the longevity; the strong heritage and the strong background.”

• “We have always had the healthiest product and that was taken to a whole new level recently when we launched our Super Fro-Yo. We did a tremendous amount of research to understand what the consumer wants from us and this is one of those things they were looking for. We heard them telling us that the nutritional benefits of yogurt were really important to them.”

• “The flavors we have in our library has tripled from what it was 18 to 24 months ago. We already had great heritage flavors, but we heard consumers saying they wanted more options, and faster. We put a lot of resources into tripling the number of our flavors, and we’re seeing a very positive response to that, as well.”

• “In the last 90 days, we have created a consumer insight department as an extension of our R&D team. This department is a dedicated resource to make sure there is a transfer of knowledge from what our customers are saying via social media to our R&D team so that we can continue to evolve with them in mind.”

• “Social media gives us a wonderful opportunity to engage the customer in a two-way dialogue and listen to them. We don’t want to use it to sell to them, but to find dialogues so we can find out what they want and do it better. Social media allows us to see trends better than ever before. Our real mission continues to be to get to know customers better than anyone else in the industry.”

Another thing I found interesting was the healthy attitude of Tim Casey towards competition.  Saturation in the frozen yogurt category is a concern of mine, but Tim has a slightly different take.

• “If you look at the segment, growth like this is always a good thing. When a segment like this is growing this fast, it creates a lot more awareness of our products and relevance to the consumer. We saw this same thing a few years ago with the coffee industry. It also forces us to get even better at our game because consumer expectations are changing and they now have more choices.”

The Bottom Line

This interview reminded me that brand differentiation is not confined to a unique product line.  It can also mean a distinct philosophy or approach to doing business.  In the case of TCBY, on top of their Super Fro-Yo, their clever use of social media to learn what their customers really want, may very well be their long-term, sustainable competitive advantage.