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FDD Talk 2015: The Orange Leaf Frozen Yogurt Franchise Opportunity (Financial Performance Analysis, Estimated Costs, and Other Important Stuff You Need to Know)

by Franchise Chatter on October 16, 2015

in FDD Talk 2017: Food Franchises, Franchise Earnings, Frozen Yogurt Franchises

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Orange Leaf Frozen Yogurt

In this FDD Talk 2015 post, you’ll learn the following:

  • Section I – Background information on the Orange Leaf Frozen Yogurt franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for an Orange Leaf Frozen Yogurt franchise, based on Item 7 of the company’s 2015 FDD
  • Section III – Presentation and analysis of Orange Leaf Frozen Yogurt’s financial performance representations, based on Item 19 of the company’s 2015 FDD, including information on the:
  • 2014 average unit volume (gross sales) by category (i.e. top 10%, top 25%, top 50%, top 75%, and all) of 88 franchised Orange Leaf Frozen Yogurt Stores that were open for at least 360 days during the 2014 calendar year, were not transferred during the 2014 calendar year, and had overall mystery shop scores in the top 75% of all Orange Leaf Stores open during this period
  • 2014 average gross sales, cost of goods sold, payroll, marketing fee, rent, royalty fee, utilities, miscellaneous expenses, and net operating income for the 7 affiliate-owned Orange Leaf Frozen Yogurt Stores that had actual Gross Sales during the 2014 calendar year that were the closest to the average unit volume in Part 1

Section I – Background Information

Orange Leaf Plans U.S., International Expansion

Orange Leaf Frozen Yogurt, which brought in a new president in 2015 and signed an endorsement deal with NBA star Kevin Durant in 2014, is on the move.

The self-service frozen yogurt business predicts it will open 1,000 stores in the U.S. and internationally by 2020. International expansion plans are to investigate opportunities in China and Mexico. The chain expanded recently into Australia.

In January 2015, Orange Leaf hired Geoff Goodman as president. Goodman most recently had been vice president of brand excellence for Cici’s Pizza of Dallas.

Goodman will oversee operations, brand management, product development and franchise development, while CEO Reese Travis focuses on the strategic growth of the company.

Durant, star of the Oklahoma City Thunder, signed an endorsement deal with Orange Leaf Frozen Yogurt in September 2014. Durant was to receive an up-front cash payment as well as equity in the company.

Among the projects Durant has been involved in have been an August 2015 kids’ contest asking for ideas to make their communities better and a May 2015 Mother’s Day promotion.

From Orange Tree to Orange Leaf

Orange Leaf Frozen Yogurt, founded in 2008, was originally known as Orange Tree Frozen Yogurt. Mike Liddell and Reese Travis purchased a franchise in 2009. Liddell bought the company in 2010, moving it from California to Oklahoma. He changed the name to Orange Leaf and hired Travis as CEO.

30+ Toppings and an Orange Spoon

The chain offers at least 30 toppings at every store for its frozen yogurt. Toppings range widely, incorporating candy, fruit, nuts, cereal and more. The stores are known for the Orange Leaf Spoon, an orange (of course) shovel-like spoon. The company emphasizes that the healthiest part of the stores is portion control, since customers can choose to indulge with brownie bites or cut calories with fruit toppings.

Each store has 16 froyo flavors at a time, with local stores selecting their menus from a corporate total of more than 70 flavors. Unusual flavors such as Brownie Batter and Salted Caramel are in the lineup along with classics like chocolate and vanilla.

Orange Leaf has a number of gluten-free flavors, offers sugar-free varieties of chocolate and vanilla frozen yogurt, and its Dole Pineapple and Dole Orange flavors provide vegan choices.

Year of the Flavor

Orange Leaf Frozen Yogurt held its Year of the Flavor promotion in 2014, adding temporary and permanent flavors to the overall menu all year.

Salted Caramel, added in January 2014, was voted by fans as the top flavor of the additions. The promotion was capped off with the addition of York Peppermint Pattie for December.

In 2015, Orange Leaf paired up with The Hershey Company in March to add the Reese’s Peanut Butter Cup flavor. The chain also added a limited-time Toasted Marshmallow flavor in July.

Fun, Quirky Image

The brightly lit, modern stores go heavy on the orange decor, with accents in green. One of the interactions of the company’s name next to its orange logo aptly uses orange for “Orange” and green for “Leaf.”

The chain divides its marketing among traditional print and broadcast, digital and social media. It strives for a fun, quirky and family-friendly brand image.

Company Honors

Orange Leaf was No. 132 on Entrepreneur’s Franchise 500 list in 2015.

Among other honors, the company was ranked No. 695 on the 2014 edition of the annual Inc. 5000, which ranks the fastest-growing private companies in the U.S. The chain was No. 19 in the Food and Beverage category.

Nation’s Restaurant News in 2014 ranked Orange Leaf No. 8 on its “Next 20,” which charts the top 20 rising stars in U.S. restaurant chains.

Section II – Estimated Costs

  • Please click here for detailed estimates of Orange Leaf Frozen Yogurt franchise costs, based on Item 7 of the company’s 2015 FDD (updated).

Section III – Financial Performance Representations (Item 19, 2015 FDD) and Analysis

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