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FDD Talk: The SweetFrog Franchise Opportunity (Financial Performance Analysis, Estimated Costs, and Other Important Stuff You Need to Know)

by Franchise Chatter on January 6, 2016

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



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sweetFrog Frozen Yogurt Interior Photo by Brambleton

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

  • Section I – Background information on the SweetFrog franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a SweetFrog franchise, based on Item 7 of the company’s 2015 FDD
  • Section III – Presentation and analysis of SweetFrog’s financial performance representations, based on Item 19 of the company’s 2015 FDD, including information on the:
  • average, high, and low monthly net sales for the thirteen fiscal periods of 2014 for Franchised SweetFrog Shops that had been operating for at least 60 calendar days during the thirteen fiscal periods of 2014
  • average net sales, gross sales, cost of goods sold, labor, rent and utilities, marketing, royalty, miscellaneous expenses, and net operating income for an Affiliate-Owned SweetFrog Shop for Period 6 (May 19, 2014 to June 15, 2014). This Affiliate-Owned Shop was selected because it was open for the entire year of 2014 and its net sales for Period 6 were the closest to the Period 6 Franchised Average.

Section I – Background Information

New Ownership Brings Changes for SweetFrog

Under new ownership in 2015, SweetFrog Premium Frozen Yogurt is testing out new waters with expanded offerings in its stores as the company eyes expansion on the international front.

SweetFrog Enterprises was acquired in February 2015 by Boxwood Capital Partners LLC, a private equity firm based in Richmond, Virginia, where SweetFrog founder Derek Cha opened his first store in 2009. The firm, a minority investor in SweetFrog Enterprises since April 2012, invests in small to mid-sized companies.

Patrick Galleher, a managing director for Boxwood Partners, anticipates strong growth and expansion for SweetFrog, including the potential for entry into Asia and South America.

At the time of the sale, SweetFrog had 348 stores in 24 states, the Dominican Republic, and the United Kingdom, with upcoming locations in Egypt and the United Arab Emirates.

Cha retained a minority stake in the company, as well as 15 locations, which he said in a press release would make him the largest franchisee. He plans to also focus on a new business, a Korean barbecue concept called Zzaam! Fresh Korean Grill that he wants to franchise. Cha came to the U.S. from Korea at age 12 and wants to make Korean cuisine mainstream in this country.

More Than Just Frozen Yogurt

The stores sell a variety of flavors of frozen yogurt, along with numerous toppings, as well as offering waffle cones and bowls, banana splits, parfaits, and Belgian waffles.

In the frozen yogurt offerings, shoppers can go the tried-and-true route with Alpine Vanilla, Classic Chocolate, or Original Tart, or live it up with flavors like Maple Bacon Donut, French Toast, and Root Beer Float. Toppings range from fruit to candy to sauces, again, offering the basics like strawberries, nuts, and hot fudge along with fun choices such as Mango Poppers, Gummy Worms, and, aptly, Gummy Frogs.

SweetFrog began selling Frozen Soft Serve Fruit from Chloe’s Soft Service Fruit Co. in October 2015. The sweet fat-free treat has 90 calories in a 3.5-ounce serving. The company is also testing other offerings, such as ice cream, smoothies, and candy that customers can serve themselves from 48 bins.

Mascots Star at Stores

The stores are bright and sunny with themed pink and green interior colors. The brand’s wide-eyed mascots are Scoop, a male frog, and Cookie, a female frog; the pair show up in staff uniforms, in decor and marketing materials, and on the extensive line of merchandise sold by the stores, such as apparel, toys, and accessories.

SweetFrog focuses on Christian principles. Cha has said the “Frog” in SweetFrog is an acronym that stands for “Fully Rely on God.”

Chain No. 6 on Entepreneur’s Top New Franchises List

SweetFrog was ranked No. 355 on the Entrepreneur Franchise 500 list in 2015, after having been ranked 306th in 2014. The brand was No. 20 on Entrepreneur’s list of Fastest-Growing Franchises, up from No. 43 in 2014, and No. 6 on the list of Top New Franchises, breaking into the top 10 after ranking No. 20 in 2014.

The chain was also No. 22 on Inc. magazine’s list of the fastest-growing privately held companies in the U.S. in 2014.

Serving Up Toys for Needy Kids

SweetFrog Enterprises introduced a new program in November 2015 that will help The Salvation Army and its Christmas Assistance program, which helps needy people during the holiday season.

The SweetFrog program’s Scoop & Cookie Drive collects new plush and stuffed toys in collection boxes to give to families for Christmas. Those donating receive a buy one, get one free card.

The inaugural drive concluded Dec. 1, 2015.

Section II – Estimated Costs

  • Please click here for detailed estimates of SweetFrog 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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