Earnings Claims of Top Franchises Revealed

Earnings Claims of Top Franchises Revealed

  • Anytime Fitness
  • CruiseOne
  • Firehouse Subs
  • Jimmy John's
  • Massage Envy
  • Menchie's
  • Orange Leaf Frozen Yogurt
  • Planet Fitness
  • The UPS Store
  • Yogurt Land
  • And Hundreds More...

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FDD Talk 2016: The Orange Leaf Frozen Yogurt Franchise Opportunity (Financial Performance Analysis, Estimated Costs, and Other Important Stuff You Need to Know)

by Franchise Chatter on August 24, 2016

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



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Orange Leaf Frozen Yogurt, Kentucky

In this FDD Talk 2016 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 2016 FDD
  • Section III – Presentation and analysis of Orange Leaf Frozen Yogurt’s financial performance representations, based on Item 19 of the company’s 2016 FDD, including information on the:
  • 2015 average unit volume (gross sales) by category (i.e. top 10%, top 25%, top 50%, top 75%, and all) of the 109 franchised Orange Leaf Frozen Yogurt Stores that had at least 18 months of operating history as of January 1, 2015 and were open for at least 360 days during the 2015 calendar year
  • 2015 average gross sales, cost of goods sold, payroll, marketing fee, rent, royalty fee, utilities, miscellaneous expenses, and net operating income for the 4 affiliate-owned Orange Leaf Frozen Yogurt Stores that had at least 18 months of operating history as of January 1, 2015 and were open for at least 360 days during the 2015 calendar year

Section I – Background Information

Orange Leaf Frozen Yogurt Adds Mythical Mascot

Orange Leaf Frozen Yogurt added even more orange in April 2016 when it introduced a new mascot, the talking Orange Unicorn.

The unicorn, which the company calls its “Spokes-thingie,” made its first appearances to promote the chain’s You Be You Day on April 26, when customers were invited to share unique, creative and unusual personality attributes and be rewarded with free frozen yogurt.

The customers were asked to mix and match frozen yogurt flavors and toppings in a beginner cup and take their creations to the registers, announce how they are different and unique, and enjoy their free frozen yogurt.

From Myth to (Augmented) Reality

The Orange Unicorn, whose backstory is that it was discovered on a farm, was further highlighted in May 2016 when the chain partnered with the Colorbug augmented reality app.

Customers can download the app from Google Play or the Apple App Store and then pick up a coloring page from an Orange Leaf store or download a page from orangeleafyogurt.com. After coloring the page, a customer can open the app, point the mobile device at the image and watch the Orange Unicorn become animated. Other interactions within the app are also available featuring the unicorn.

The app is developed by Dubai-based Pixelbug, and the Orange Unicorn coloring page is the company’s first U.S.-based AR project to be developed.

Chain Young But Growing

The Oklahoma City-based chain was founded in 2008 and started franchising in 2009. The brand has more than 300 stores, primarily in the western half of the United States, with more than 100 locations in the works.

The brightly decorated stores range from kiosks (50-500 square feet; common in malls and other areas with high foot traffic) to storefronts that range from 500 to 1,800 square feet and can be found in shopping centers.

Stores Offer Local Favorite Flavors

Customers serve themselves their own frozen yogurt and toppings. Flavors and toppings vary, with permanent flavors joined by limited-time and seasonal offerings, as well as newly developed taste sensations.

Each store has 16 frozen-yogurt flavors, including classics, local favorites and creative concepts, and at least 30 toppings, from gummy worms to granola. Different locations offer different menus of flavors and toppings.

Summer Flavors Spark Contest

Orange Leaf introduced two fun summer flavors in July 2016. Strawberry Serrano Lemonade Sorbet and Spa Day Sorbet, available for a limited time, are free of both dairy and gluten.

Along with the launch of the two new flavors, Orange Leaf sponsored a Creation Sensation Contest, asking customers to share imaginative ideas for recipes involving the flavors. The prize was a trip to an Orange Leaf store in Oklahoma City, Boston, Austin, San Antonio, Houston, Indianapolis, Cincinnati or Kansas City to help create a new frozen yogurt flavor for 2017.

Chain Hits No. 125 on Franchise 500 List

Orange Leaf saw its highest ranking of 125th on Entrepreneur’s Franchise 500 list for 2016, just four years after debuting on the list with a rank of 359th. The chain quickly rose to No. 156 in 2013 and kept its high position.

Orange Leaf finished 2015 with 305 U.S. locations and five international stores.

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 2016 FDD (updated).

Section III – Financial Performance Representations (Item 19, 2016 FDD) and Analysis



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{ 2 comments… read them below or add one }

Danny walker September 3, 2016 at 8:59 am

I’m about to sign with Orange Leaf as a franchisee The FDD says you have a 10 year commitment.
What happens if you break that commitment can they sue you and for how much ???

Reply

Franchise Chatter September 3, 2016 at 12:07 pm

Hi Danny,

The best thing for you to do is to get the answer straight from the franchisor before you sign any agreement. I’ve heard of franchisors holding their franchisees to their 10-year commitment, even after the business has closed. Other franchisors may be more compassionate and reasonable, perhaps allowing you to be released from the agreement after meeting certain conditions.

Best of luck with your due diligence.

Best regards,

Ambrosio

Reply

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