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Anonymous Reader: Why I’m Considering a Sub Zero Ice Cream & Yogurt Franchise

by Franchise Chatter on February 9, 2012

in Franchise Reviews, Frozen Dessert Franchise, Frozen Yogurt Franchises, Ice Cream Franchise



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(Ambrosio’s note:  Every so often, readers ask for my opinion on particular franchises, and I’m happy to oblige if I am familiar with the company.  But I’m always upfront if I don’t know enough about the franchise to give an opinion on the spot. 

About two weeks ago, I received an email from Anonymous Reader (name withheld upon request) asking about Sub Zero Ice Cream & Yogurt, a franchise I’d heard of but didn’t really know much about.  I was able to get my hands on Sub Zero’s FDD but, unfortunately, they don’t make any financial performance representations in their Item 19.

After visiting their website and reading through their FDD, my curiosity was piqued.  When I asked Anonymous what attracted him to Sub Zero, he sent me a detailed list of why he likes this franchise.  The email was so well written that I tried to convince Anonymous to do a guest blog post on Sub Zero.  After some initial hesitation, Anonymous agreed to flesh out his original email with more details and this guest blog post is the result.

Subzero Ice Cream & Yogurt Photo by Federal Way MirrorIf you are a prospective franchisee looking at a particular opportunity, I encourage you to go through this same exercise.  Putting your thoughts in writing, as if you were doing an objective review for a guest blog post, will force you to look at all sides of the business and help you form a more balanced view of the opportunity.  Make sure to include the good and the bad, because all franchise opportunities will have their fair share of both.  And if you want to get feedback from me or from readers of Franchise Chatter, I invite you to submit your review as a guest blog post. 

In the meantime, here’s what Anonymous has to say about Sub Zero.)



I’m very excited about the potential for Sub Zero, especially after reviewing the numbers you present on your site for leading yogurt franchises.  I discovered Sub Zero at a franchise show several months ago.  My 11-year-old daughter and my wife were with me and they were immediately attracted to the Sub Zero table.  Looking at it from a distance, you could see something that looked like fog rising around the table.  My daughter thought it was the greatest thing she had ever seen.  We tried the ice cream and the yogurt and were quite impressed with the product.

Here are the primary reasons I am excited about this opportunity:

  • I love the concept.  The idea of making ice cream on the fly in an entertaining way seems perfect.  It has the “gimmick” that will get attention, but it’s backed by a solid product that people will come back for.  I love what they are doing with the look and feel of the stores — using the nitrogen tank as part of the decor and using a science/chemistry theme.  Atmosphere of the stores are nice, much better than a lot of the yogurt stores I have been to.
  • The ability to offer almost unlimited choices of flavors and toppings is huge. Everyone can get exactly what they want — made to order.  It has the benefit of customization like the self-serve yogurt places, but without having to make it yourself and without the chaos of kids dumping toppings all over the place.
  • The fact that you can choose ice cream, custard, yogurt or soy/rice milk is a great feature.  It allows options for folks with dietary restrictions or those simply trying to eat healthy.
  • Subzero Ice Cream & Yogurt Photo by TheCause253The yogurt — in my opinion — is MUCH better than the soft serve stuff you get at self-serve yogurt shops.  The texture is much more like regular ice cream, although you have the option to make it harder or softer depending on preference.
  • The instant freeze aspect of this concept means you don’t have to have a huge freezer with an inventory of ice cream.  This keeps the costs of the build out lower and also has a benefit on utility costs. All ice cream is always fresh.
  • The catering opportunity is significant.  Unlike other standard ice cream or yogurt offerings, you do not need electricity to keep the product cold.  Just a portable nitrogen tank and a cooler and you can literally be anywhere.  Because of the coolness factor, I think this can work for birthday parties, weddings, corporate events, school events, etc. The franchise sells a trailer if you want it, but all you really need is an easy setup and a few tables.  Catering is obviously a great way to promote the business as well as create another revenue stream.
  • There are a million tools for marketing this concept.  I think the PR aspect is great.  There are currently no stores in my area and when the first store is introduced there is an opportunity for significant news coverage.  The word of mouth aspect will be huge — once people experience it, they will talk about it.  The company also has a school program where they do a little science program using liquid nitrogen and, of course, end by giving the kids ice cream and coupons.
  • Sub Zero has stores that are doing well in Salt Lake City. Nothing against Salt Lake, but it’s not the greatest market for something like this (low household income, low population density, cold weather part of the year and NO business on Sundays).  In other markets I think this can do much better.
  • The company has now partnered with a franchising operation called Five Star.  They developed and support the Five Star Painting franchise as well as some others.  They seem like good guys and they are investing heavily in Sub Zero as their major brand.  They seem like they understand what it takes to make Sub Zero a success.
  • The caveat is that I only know what I see.  It is a small operation and this is a new concept only available in a few markets.  There are still things they are figuring out.  I find that exciting, but it also introduces risk.

Subzero Ice Cream & Yogurt Photo by Federal Way Mirror(Back to Ambrosio:  Anonymous makes a compelling case in favor of Sub Zero, but allow me to play devil’s advocate.  The interactive nature of this concept reminds me of Cold Stone Creamery, a frozen dessert franchise that is known for made-to-order ice cream creations using a variety of mix-ins.  My main problem with Cold Stone’s business model is that customization requires a larger crew to execute properly, especially during peak hours.  Since ice cream is a relatively low ticket item, consumed only during certain hours of the day, and seasonal in nature, the payroll requirements under Cold Stone’s model seem disproportionate to its revenue potential. Cold Stone has suffered over last few years because of overexpansion, but that doesn’t apply to Sub Zero at this time.

The beauty of the self-serve frozen yogurt model is that you can run the shop efficiently with a barebones staff without losing customers. And with self-serve, you can move customers in and out the doors far more quickly, which is crucial to maximizing revenues during peak hours (and peak seasons).

Is a large staff needed to properly execute Sub Zero’s unique concept? Or has Sub Zero learned from the experience of Cold Stone Creamery and improved upon the latter’s business model and operations?  This is a crucial point to consider.

If you have any first hand knowledge of Sub Zero that can help Anonymous make an informed decision, please share your thoughts in the comments section below.)



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{ 22 comments… read them below or add one }

Willan Johnson February 9, 2012 at 10:30 pm

I had a chance to see this concept in November when the company exhibited at the IFA’s West Coast Expo in Los Angeles. I thought the concept was pretty neat, and the ice cream was very good (and it was fun to see in front of me). That said, my colleague and I both questioned the logistics of making custom ordered ice cream and delivering in a timely manner. I think your analogy of Cold Stone Creamery is right on. I think they will need to find a way to speed the delivery to handle the volume necessary to turn the right level of profit. Let’s hope so, as the science is fun, and the ice cream good.

Reply

Ambrosio February 9, 2012 at 10:44 pm

Thank you for sharing your thoughts on Sub Zero, Willan. I’m hoping to land an exclusive interview with an executive of Sub Zero soon, and the issue of logistics will be the subject of one question, for sure. I’d like to know what their operations strategy is to ensure that their franchisees maximize profits. Here’s hoping that they grant my request for an interview.

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Rob West February 28, 2012 at 4:38 pm

Hello Willan. We were the guys behind the SZ booth at the LA Franchise trade show. The first store in California will be coming this April to Simi Valley, 2091 Madera Road. Come and help us figure out how to make the line logistics work in a timely manner. Thanks. Rob W.

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AJ Wilcox February 14, 2012 at 7:41 am

As a resident of Utah, I was introduced to Sub Zero several years back at their original location. Now they’ve got lots of locations, but I used to travel a good distance to take my family there. It was such a cool, novel concept, and every Friday and Saturday evening, the place was packed with a line out the door. It’s still our main choice for every ice cream outing.

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Ambrosio February 14, 2012 at 7:52 am

Thanks for your feedback, AJ. It’s nice to hear from someone who has actually been to one of the Sub Zero stores and enjoyed the food and experience. Looking forward to trying it one day.

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Mikelle Despain February 14, 2012 at 11:53 am

Hello Ambrosio. My name is Mikelle Despain; I am the brand manager of Sub Zero Ice Cream & Yogurt. We were excited to find such a thoughtful post about our company. I am absolutely happy to answer any questions you or your readers have about a Sub Zero Ice Cream & Yogurt franchise opportunity.

You had specific questions about the staffing requirements and I thought I’d chime in. This is something we are paying particularly close attention to. Right now all of our locations have been able to serve customers quickly during peak hours with 2-3 employees and one flash freezing unit. Our average time to make one ice cream is 1.5 minutes with only 20 seconds needed at the freezing station. During typical busy hours, a customer generally stands in line for less than 5 minutes, but during especially busy times when lines are out the door, customers can sometimes wait up to 15 minutes for their ice cream. This is fairly typical for most customers going out on a date or with friends for any brand of ice cream on a Friday or Saturday night, but we’re still closely monitoring it and experimenting with options to better accommodate larger crowds without having to add more employees.

Thanks again for the interest. Please feel free to contact me via email or comment on this post with any other questions you have and I will be happy to answer everything I can for you!

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Ambrosio February 14, 2012 at 7:41 pm

Hi Mikelle,

Thanks so much for addressing my concerns about staffing requirements. Nice to hear that this is something that you are paying close attention to. I’m very intrigued by Sub Zero, especially because I’ve been hearing good feedback from a few of my readers. I’d love to do a Q&A interview with you. Please check your inbox for an email from me shortly. Thanks again, Mikelle!

Best regards,

Ambrosio

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James H. July 15, 2012 at 2:08 am

Hi Ambrosio,

Have you done the interview regarding this? Care to share it with us?

Thanks.

Reply

Franchise Chatter July 15, 2012 at 3:26 am

Hi James,

I sent the questions, but unfortunately, I never heard back from the franchisor. I think it’s time for me to follow-up. 🙂 Thanks for your interest. Let me see if I can revive the interview. Please stay tuned.

Best regards,

Ambrosio

Reply

Naomi Hancock March 10, 2013 at 12:17 am

Ambrosio,
This is Naomi Hancock, co-founder and co-owner of Sub Zero Ice Cream. I followed this thread back in February last year when Mikelle responded as our brand manager, and have just been directed back to it by someone who found it on the web and shared it with us. I notice you tried to contact Mikelle for a Q&A and did not hear back from her. Much has happened since that time in the Sub Zero company, so if you are still interested in an interview, we would love to have the chance to respond. Please feel free to e-mail if you are still interested. Thank you!

Reply

Franchise Chatter March 10, 2013 at 11:49 am

Hi Naomi,

Great to hear from you! Watched your appearance on Shark Tank — one of my favorite shows! I sent you an email to discuss a possible telephone interview. Please respond via email so that we can coordinate schedules.

Best regards,

Ambrosio

Reply

Melissa July 25, 2015 at 11:01 am

Any follow-up on that potential interview?

thomas May 22, 2015 at 3:30 pm

No update or comments on Sub Zero for a couple of years… seems like a major red flag… or an under the radar opportunity! Thoughts anyone?s

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Brian Teller September 2, 2015 at 7:18 pm

On the surface the concept is really cool (no pun intended), but I am anxious to hear more from Sub Zero and ask similar questions. The bottom line is efficiency and effectiveness, when serving the public with a reasonably priced product that enables a franchisee to be profitable quickly. Profits lead to growth and everyone wins, which is why we’re here in the first place.

Reply

Rita McCabe October 23, 2015 at 11:40 am

Hi Folks,
Sub Zero Ice Cream is growing significantly! We are the Area Developers in New England and we’ve opened up two shops in Nashua, NH. If you’re in the New England area, check out http://www.subzeroicecream.com/nashuanewhampshire. Our Facebook pages: Sub Zero Ice Cream North Nashua and Sub Zero Ice Cream South Nashua. There are a bunch of Sub Zeros that have opened in the past few years and the franchise is up to 50 now. Including two in China, two in Dubai and there’s one set to open in Costa Rica. There are 8 in build out. Go to the corporate page http://www.subzeroicecream.com and see if there’s one in your area yet! Most Sub Zero’s have three freeze stations with 2 – 3 employees on at busy times and they can get people through the lines very quickly. Thing that takes the most amount of time is people deciding what they want! But our “Sensations” help with that. They are pre-recipied so people can just order a #1, for instance. This is definitely an under the radar opportunity that we are working to make people aware of!! It is “cool” and has multiple revenue streams. As the regular course of business we also do School and Scout science presentations (for a fee) which are extremely popular with teachers and leaders. Also, Sub Zero can cater any kind of party. Birthdays, weddings, Bar Mitzvahs, holiday, etc. These “outside the store” activities help drive traffic to the stores and build brand awareness more quickly. Many of the stores which have been in business several years now are very successful, sale growing year over year as brand awareness increases and people find out how awesome liquid nitrogen ice cream is!

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Seth E December 16, 2015 at 11:19 pm

HI I was also thinking about buying here in Arizona and would like to know more if you have heard anything else about this. I went for the first time today and it was really fun and nice to see but not very busy so what are anyone’s thoughts on this.

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Jake Furnish February 14, 2016 at 3:11 pm

Very interested in getting as much information as I can about Sub Zero. I’ve been considering this for two years, ever since I talked to the owner in federal way, Washington.

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Dominique April 6, 2016 at 12:25 am

Hi there! I am in Roseville California and am extremely curious about sub zero and am truly considering opening a location. I am however not familiar at all with a franchise business. It does seem like a lot of money to invest in ice cream. Curious on someone’s thoughts who is more familiar with this type of investment.

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AG September 7, 2016 at 6:59 am

Were you able to interview them? Any follow up feedback? They seem to be opening new stores but not sure why there isn’t much information around it.

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Franchise Chatter September 7, 2016 at 1:04 pm

We published a Q&A with Jerry Hancock, the CEO and founder of Sub Zero, a few months back (April 2016).

https://www.franchisechatter.com/2016/04/23/qa-with-jerry-hancock-ceo-and-founder-of-sub-zero-ice-cream/

Liquid nitrogen ice cream seems to be getting more popular nowadays, at least in Vancouver, B.C., where several independent shops have opened over the past few months (Mister, Lik N2, etc.) and they seem to be doing well.

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Julian Garcia May 30, 2017 at 1:17 am

SubZero hols the patent for freeing the cream with liquid nitrogen. I see tons of places opening up their own shop. What is the company doing to help with this?

How does the company plan to fight patent violators?

Thanks.

Reply

Franchise Chatter July 25, 2015 at 8:12 pm

No follow-up as of yet, but I’ll see what I can do.

Reply

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