(Ambrosio’s note:  Welcome to this week’s edition of Fro-Yo Files, an exclusive bonus series for Platinum subscribers of Franchise Chatter.)

Fro-Yo Files: CEO Amit Kleinberger Discusses Menchie’s Values-Based Success

Amit Kleinberger has had an interesting and varied career: after serving as a sergeant in an Israeli infantry unit, he owned several businesses, including a cellular phone equipment chain and an assisted living residence. But none of these experiences has offered him more fulfillment than serving as the CEO of Menchie’s, whose “competitive advantage,” he says, “is giving smiles” to the world.

All of the corners of the world, in fact: By next year, Kleinberger says, Menchie’s expects to have 500 locations in over 10 countries. Franchise Chatter asked him how the company’s corporate vision of “triggering smiles” can encompass such a vast and ever-growing franchise.

Competitive Advantage

Imagining a store full of smiling adults may seem a bit far-fetched. But the idea of “making people smile” sounds less odd — or even hokey — when it comes to engaging the imagination of children. In fact, in Menchie’s case, it is shrewdly tactical. Small children are typically accompanied by adults, adults who have wallets and who want to spend time with their children in a safe, friendly, and enjoyable atmosphere. And grown ups tend to smile when their children do.

“We are unique in the [frozen yogurt] category,” Kleinberger says.  No other fro-yo company is as “oriented to the American family,” although the owners of sweetFrog may disagree with this assertion (see related story). The only chain to supply party rooms, Menchie’s offers merchandising such as free toys to attract children and their parents. It might be safe to say that Menchie’s competes as much with other children-oriented venues such as Chuck E. Cheese’s as it does with other frozen yogurt shops.

Menchie’s has “a unique design,” Kleinberger says. “You cannot confuse yourself” that you’re at any other place than at Menchie’s when you walk into one of their stores, where everything is designed to “trigger smiles.” And if you make children smile, you can be sure they will tell their friends, and beg their parents to bring them back again and again. This is surely part of what Kleinberger calls the “viral” communications underlying Menchie’s success.

Kleinberger speaks more readily of “culture” and “values” than he does of costs or operational details. But his focus on culture and values seems to be as important and strategic for Menchie’s success as a focus on the hard numbers.

Kleinberger makes a distinction between the basic product — whatever it may be — and the way it is delivered. He brings up Apple, citing its brand concept, presentation, and in-store experience, all of which have made that company an enviable leader in its category and famous all over the world. In another example, he describes how Macy’s and Nordstrom may carry identical merchandise, but it’s the high-end Nordstrom’s superior “way of presenting” both its products and itself that distinguishes it from other department stores. And the same holds true for Menchie’s and its frozen yogurt. “The way we give is different; the way you buy the product is different” from other fro-yo companies, he says. “It’s the way you do something that makes it special.”

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