In this FDD Talk 2017 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 2017 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for an Orange Leaf Frozen Yogurt franchise, based on Items 5 and 6 of the company’s 2017 FDD
- Section IV – Presentation and analysis of Orange Leaf Frozen Yogurt’s financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:
- 2016 average unit volume (gross sales) by category (i.e. top 10%, top 25%, top 50%, top 75%, and all) of the 132 franchised Orange Leaf Frozen Yogurt Stores that had at least 18 months of operating history as of January 1, 2016, were open for at least 360 days during the 2016 calendar year, and did not offer all products currently part of the Orange Leaf System
- 2016 average unit volume (gross sales) by category (i.e. top 10%, top 25%, top 50%, top 75%, and all) of the 10 franchised Orange Leaf Frozen Yogurt Stores that had at least 18 months of operating history as of January 1, 2016, were open for at least 360 days during the 2016 calendar year, and offered all products currently part of the Orange Leaf System
Section I – Background Information
16 Things You Need to Know About the Orange Leaf Frozen Yogurt Franchise
Launched First Successful Frozen Yogurt Drone Delivery
1. In early October 2016, Orange Leaf Frozen Yogurt celebrated the world’s first successful frozen yogurt drone delivery to students at Hope College in Holland, Michigan. The pilot delivery program, titled Project Flying Orange Unicorn, is an experiment with commercial airborne froyo deliveries, working within the U.S. Federal Aviation Authority guidelines.
2. Based on the positive feedback from students at Hope College, the Orange Leaf Holland location will begin offering frozen yogurt drone delivery by appointment.
3. Project Flying Orange Unicorn is the brainchild of Jeremy Latchaw, franchise owner of the Holland and Grandville Orange Leaf locations and president of Mishigami Group, a drone dealership that is currently working with some of Michigan’s largest fire and police departments to develop their unmanned aerial vehicle programs.
4. The Mishigami Group will continue to help Orange Leaf develop its pilot program, including assessing the potential for expansion in new markets at a later date.
5. In order to ensure that the frozen yogurt would survive, Orange Leaf Holland developed a modified to-go delivery box and frozen packing materials specifically for the drone delivery test.
6. According to Geoff Goodman, President of Orange Leaf Frozen Yogurt, the company “continues to lead the innovation taking place in the frozen yogurt category.” Goodman also says that millennials are a target demographic for Orange Leaf as they are interested in emerging technologies that also offer convenience.
Partnership with No Kid Hungry
7. In early September 2016, Orange Leaf Frozen Yogurt introduced its Generation Original program in partnership with the national nonprofit No Kid Hungry. The program aims to raise funds to help No Kid Hungry end childhood hunger in America.
8. Orange Leaf’s goal was to raise enough money to provide 250,000 meals to hungry kids in the U.S. during September, which is National Hunger Awareness month.
9. Throughout September, customers were able to help Orange Leaf raise money in several ways:
- by donating $1 to receive a limited-edition Orange Unicorn Augmented Reality (AR) coloring sheet pin up available at participating Orange Leaf locations;
- by donating $1 to receive a limited-edition Generation Original coloring sheet pin up available at participating Orange Leaf locations;
- by purchasing any Swizzle, Orange Leaf’s newest froyo dessert in 2016, during “Dine Out Week” (September 19 to 23) at participating Orange Leaf locations; $1 from each purchase was donated to No Kid Hungry; or
- by purchasing a limited-edition Generation Original t-shirt online for $10.
“Hires” Orange Unicorn to Be New Face of Brand
10. In April 2016, Orange Leaf Frozen Yogurt announced that the company had “nabbed a rare, talking Orange Unicorn to become its new Spokes-thingie.” The Orange Unicorn will oversee the company’s snack inventions while encouraging customers to show off their “unique, one-of-a-kind, original selves.”
11. According to CEO Geoff Goodman, Orange Unicorn is the ideal leader of Orange Leaf’s “dare-to-be-different revolution.” As part of Orange Unicorn’s origin story, Goodman says that he found the unicorn on a farm while he and the product development team were looking for inspiration for new flavors and snack inventions.
12. Orange Leaf used the debut of Orange Unicorn to launch its new snacks and treats such as Swizzles, Froyo Cakes, and new spring flavors at the end of April. The brand plans to use Orange Unicorn to celebrate events, campaigns, and new products.
13. The frozen yogurt franchise also introduced a new interactive coloring page designed through Pixelbug’s Colorbug Augmented Reality (AR) mobile app to bring Orange Unicorn to life. Customers can get a free stencil from participating Orange Leaf locations or download one from the brand’s website and use the free Colorbug app to interact with Orange Unicorn on mobile devices.
14. Orange Leaf Frozen Yogurt was founded in 2008 under the name Orange Tree Frozen Yogurt. A year later, franchising began with Mike Liddell and Travis Reese opening the first franchised location. Liddell purchased the franchising company in 2010 and moved its headquarters from California to Oklahoma and changed its name to Orange Leaf.
15. By the end of 2011, Orange Leaf had over 100 locations in the U.S. The company’s first international franchised location opened that same year in Melbourne, Australia. Today, there are over 300 locations in the U.S. and internationally.
Entrepreneur’s Franchise 500
16. Orange Leaf Frozen Yogurt debuted on Entrepreneur’s annual Franchise 500 list in 2012 and has ranked every year since, except in 2017. The company’s highest rank was No. 125 in 2016, while its lowest rank was No. 359 in 2012. Orange Leaf Frozen Yogurt also appeared on Entrepreneur’s Top New Franchises list in 2013 at No. 3.
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 2017 FDD (updated).
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on Orange Leaf Frozen Yogurt’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2017 FDD.
Section IV – Financial Performance Representations (Item 19, 2017 FDD) and Analysis
- Orange Leaf Frozen Yogurt’s financial performance representation contains (1) the actual 2016 average unit volume of franchised Orange Leaf Frozen Yogurt Stores in operation during the 2016 calendar year that did not offer all products currently part of the System (Part I, below); and (2) the actual 2016 average unit volume of franchised Orange Leaf Frozen Yogurt Stores in operation during the 2016 calendar year that offered all products currently part of the System (Part II, below).
- All figures are based on full-service outlets. No Orange Leaf Kiosk or Mobile Unit performance is included.
Part I – Actual 2016 Average Unit Volume of Franchised Orange Leaf Frozen Yogurt Stores Offering Limited Products
- The financial performance representation in this Part I contains the actual 2016 average unit volume (Gross Sales) by category of 132 franchised Orange Leaf Frozen Yogurt Stores that had at least 18 months of operating history as of January 1, 2016 and were open for at least 360 days during the 2016 calendar year.
- These 132 outlets represent approximately 63% of the total 211 franchised outlets open for business as of December 31, 2016.
- Outlets that had fewer than 18 months of operating history have been excluded because new outlets often have higher incomes than the franchisor would expect to see in an older outlet, and the franchisor does not believe those results are indicative of what a typical outlet will achieve during the majority of the term of its Franchise Agreement.
- Outlets that were not in operation for at least 360 days in 2016 have been excluded from the financial performance representation because their partial year performance is not indicative of the performance the franchisor would reasonably expect to see over an entire calendar year.
- These statements have not been audited, and may not be based on generally accepted accounting principles.
- The actual average unit volume numbers do not reflect the costs of sales, operating expenses, or other costs or expenses, that must be deducted from revenue to obtain net income or profit.
- Each column identified as “Top 10%,” “Top 25%,” “Top 50%,” and “Top 75%” refer to the respective percentage of outlets ranked by their Gross Sales in descending order.
- The “Number of Outlets” refers to the number of outlets within the respective category.
- “Average Unit Volume” refers to the average Gross Sales of all outlets within the category.