In this FDD Talk 2017 post, you’ll learn the following:
- Section I – Background information on the Menchie’s franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Menchie’s franchise, based on Item 7 of the company’s 2017 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Menchie’s franchise, based on Items 5 and 6 of the company’s 2017 FDD
- Section IV – Presentation and analysis of Menchie’s financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:
- 2016 average gross sales earned by the 233 franchised Menchie’s locations that were procured under Menchie’s Real Estate 2.0 platform, were open and operating for the entire Measurement Period from December 28, 2015 to January 1, 2017, and were not located in non-traditional locations
- 2016 actual gross sales earned by Menchie’s only company-owned location in operation during the entire Measurement Period
- 2016 actual profit and loss information (gross sales, net sales, cost of goods sold, payroll, rent, marketing fee, royalty fee, utilities, miscellaneous expenses, and net operating income) for three of the 363 franchised Menchie’s locations in operation during the entire Measurement Period and that were not located in non-traditional locations. These three franchised locations were selected because their actual gross sales during the Measurement Period were closest to the average gross sales for the 233 Real Estate 2.0 platform locations included in Part 1.
Section I – Background Information
12 Things You Need to Know About the Menchie’s Franchise
Partnered with MGA Entertainment for a Nationwide Num Noms Promotion
1. In early May, Menchie’s announced that it had partnered with MGA Entertainment, a private toy company, to release a special Menchie’s-branded edition of its Num Noms starter packs. The special edition toys, which are now available online and in stores nationwide, rolled out exclusively to Toys “R” Us in July.
2. To kick off the partnership, 420 Menchie’s stores in the U.S. received a “Smell So Delicious” campaign makeover, which featured two exclusively-designed, limited-edition frozen yogurt cups.
3. Amit Kleinberger, Menchie’s CEO, said, “The promotional opportunity with Num Noms is uniquely suited to deliver on our top priority to develop marketing strategies and promotional partnerships that increase market share, while underscoring our mission to spread smiles to all of our guests nationwide.”
New Summer Flavors
4. Menchie’s latest summer promotion, which debuted at the start of August, features two new frozen yogurt flavors, Pina Colada Sorbet and Original Strawberry. The Pina Colada Sorbet features a blend of real pineapple, real coconut cream, no artificial colors, and no high fructose corn syrup. Menchie’s Original Strawberry is made with real strawberries, no artificial colors, no high fructose corn syrup, and no artificial flavors.
5. Select Menchie’s locations are also offering a Dole Whip Pineapple Float for a limited time or while supplies last.
6. The frozen yogurt chain is also promoting The Emoji Movie with a limited-edition cup and two new, limited-edition Emoji spoons featuring characters from the movie.
American Heart Association Campaign
7. Menchie’s is currently accepting donations for the American Heart Association. Customers who make a donation will receive a paper sign to write their name on that the Menchie’s location will post on the wall, and a 20 percent off coupon for a future visit.
International Frozen Yogurt Day
8. On February 6, Menchie’s celebrated International Frozen Yogurt Day with two special promotions. The first was a BOGO (buy one, get one) frozen yogurt offer available to customers who came into a participating Menchie’s location on February 6. As a bonus, customers who came in that day received a second BOGO coupon (while supplies lasted) to use on their next visit. The coupon was valid from February 7 to 28.
9. Menchie’s was founded in 2007 by Danna and Adam Caldwell in Los Angeles, California. The Caldwells were inspired to open a well-branded, family-friendly self-serve frozen yogurt store in the Los Angeles area after they went on their first date at a frozen yogurt shop.
10. Soon after opening the first store, Menchie’s CEO Amit Kleinberger partnered with the Caldwells to turn Menchie’s into a global brand. After receiving numerous franchise inquiries, the Caldwells asked Elie Balas to join them in developing a franchise strategy; franchising began in 2008.
11. Today, there are over 540 Menchie’s frozen yogurt shops in the U.S. and globally in countries such as Canada, Puerto Rico, England, South Africa, Kuwait, Bahrain, The Bahamas, Bangledesh, Guatemala, United Arab Emirates, Qatar, India, China, and Japan.
Entrepreneur’s Franchise 500
12. Menchie’s first appeared on Entrepreneur’s annual Franchise 500 list in 2012 and ranked annually until 2015. The company’s highest rank was No. 111 in 2015, while its lowest rank was No. 253 in 2012.
Section II – Estimated Costs
- Please click here for detailed estimates of Menchie’s franchise costs, based on Item 7 of the company’s 2017 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on Menchie’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
- Menchie’s Item 19 contains certain historical data relating to the operation of its franchised and company-owned locations.
- The franchisee data included in this Item 19 was taken from the information reported to Menchie’s by its franchisees through the company’s electronic point-of-sale system.
- The franchised and company-owned data included in this Item 19 reflects information for the 53-week annual period from December 28, 2015 to January 1, 2017 (the “Measurement Period”).
- Menchie’s has not audited this information, nor independently verified this information.
Part 1 – Average Gross Sales of Locations Selected Under Real Estate 2.0 Platform
- As of January 1, 2017, Menchie’s had 418 franchised locations operating domestically under the Menchie’s trademarks. Of these 418 locations, 363 were open and operating for the entire Measurement Period and were not located in non-traditional locations.
- 233 of these locations operated from franchised locations that were procured under Menchie’s Real Estate 2.0 platform.
- Part 1 of this Item 19 includes the average Gross Sales earned by the 233 of the 363 franchised locations that were procured under Menchie’s Real Estate 2.0 platform.
- In 2012, Menchie’s changed its real estate site criteria and changed from working with 3rd party real estate site selection companies to providing this service in-house.