In this FDD Talk 2016 post, you’ll learn the following:
- Section I – Background information on the Jamba Juice franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Jamba Juice franchise, based on Item 7 of the company’s 2016 FDD
- Section III – Presentation and analysis of Jamba Juice’s financial performance representations, based on Item 19 of the company’s 2016 FDD, including information on the:
- 2015 average net sales for the franchised and company-owned traditional Jamba Juice Stores (on the East Coast and the West Coast, respectively) that were owned and operated for the entire 2015 Fiscal Year by either the company or a franchisee and that had been opened and operating for more than one year as of December 29, 2015
- 2015 average net sales for the franchised and company-owned non-traditional Jamba Juice Stores (on the East Coast and the West Coast, respectively) that were owned and operated for the entire 2015 Fiscal Year by either the company or a franchisee and that had been opened and operating for more than one year as of December 29, 2015
- 2015 average cost of sales, labor costs, occupancy costs, store operating expenses, and cash flow margin for the company-owned traditional Jamba Juice Stores that were owned and operated for the entire 2015 Fiscal Year by the company and that had been opened and operating for more than one year as of December 29, 2015
Section I – Background Information
Jamba Juice Gears Up for Move to Texas
After 26 years in California, Jamba Juice is relocating to Texas. The company announced plans for its new headquarters in May 2016.
Jamba Juice said in a news release that the move from Emeryville, California, to Frisco, Texas, is meant to lead to sustainable, long-term growth. The transition is expected to take six months, after which the Emeryville office will close. The company is one of several California businesses that have left the state to pursue lower-cost opportunities in Texas.
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“Jamba has pursued our vision to inspire and simplify healthy living for 26 years, starting with a single juice shop in San Luis Obispo, California, but as we continue to spread our healthy living mission globally, it has become increasingly clear that a relocation of our Support Center will better position the company to extend our brand and continue to support our franchise partners for the long term,” David A. Pace, CEO of Jamba Inc., said in a news release.
“With the pending expiration of our lease in Emeryville at the end of 2016, we explored a number of location options that would offer us competitive operating costs, a region with extensive access to skilled restaurant talent, an attractive cost of living to our current and future team members and a geographical location that facilitates our ability to expand our store base,” he said. “The state of Texas meets all of these criteria, and Frisco is a community committed to healthy living that aligns closely with our overall mission.”
Pace said the company looked at numerous location options before choosing Frisco. The LEED-certified facility, the Jamba Whirl’d Support Center, will have 25,000 square feet of office and collaboration space, along with a test kitchen for product development.
Restructuring, Leadership Changes Planned
The company plans a restructuring of the entire organization along with the relocation. Several changes in leadership will also take place; among other moves, Karen Luey, executive vice president and chief financial and administrative officer, will not relocate to Texas. She will be succeeded by Marie Perry, who joined Jamba Juice in May 2016. Perry was most recently senior vice president, treasurer and controller at Brinker International.
CEO White Retires; Replaced by Pace, Federico
Jamba Juice CEO James White announced his retirement in October 2015. White, who had been with the company since 2008, was replaced by Pace as CEO and Richard Federico as chairman. Pace, previously president of Carrabba’s Italian Grill, joined the company in March 2016. Federico, the former CEO of P.F. Chang’s China Bistro Inc., began in January 2016.
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Jamba Juice has nearly 900 stores around the world, about 750 of which are franchised units in the United States; the remainder of the stores are international locations and corporate locations.
The company was founded in 1990 by cyclist and fitness enthusiast Kirk Perron, whose first location was in San Luis Obispo, California. The business was rooted in a senior project Perron completed at California Polytechnic Institute.
Jamba Juice’s menu includes fresh-squeezed juices, from simple OJ to a tropical blend and a blend of apples, cucumbers and greens; a wide variety of smoothies; juice shots that pack a lot into a tiny serving; Energy Bowls, featuring ingredients like granola, fruit, soy milk and yogurt; and Tasty Bites, including bistro sandwiches, breakfast wraps, baked goods, and oatmeal. Flavor boosts are available to stir into smoothies.
Adele Prank Leads to Website
Pop superstar Adele and talk show host Ellen DeGeneres teamed up for a prank on Jamba Juice employees in February 2016 that the company used as a marketing springboard.
Adele, delivering lines fed to her off-screen by DeGeneres, puzzled employees as she asked for a large juice in a small cup, pulled a pair of scissors from a purse to cut her own wheatgrass, and had an “Ellen” staffer brush her hair.
Adele’s announcement of a fictitious smoothie shop in England called Swishy Chug, featuring “beet and potato mixed together,” led to Jamba Juice actually launching a Swishy Chug site. The site gives the smoothie a name, “Rolling in the Beets Smoothie,” and offers visitors a $3 off coupon as well as a link to the broadcast of the prank.
Section II – Estimated Costs
- Please click here for detailed estimates of Jamba Juice franchise costs, based on Item 7 of the company’s 2016 FDD (updated).