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FDD Talk 2017: What You Need to Know About the Pinkberry Franchise Opportunity (Financial Performance Analysis, Costs and Fees)

by Franchise Chatter on September 17, 2017

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

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Pinkberry Frozen Yogurt Franchise Photo by mezzoblue

In this FDD Talk 2017 post, you’ll learn the following:

  • Section I – Background information on the Pinkberry franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a Pinkberry 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 Pinkberry franchise, based on Items 5 and 6 of the company’s 2017 FDD
  • Section IV – Presentation and analysis of Pinkberry’s financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:
  • 2016 average and median gross sales for the top 20%, bottom 20%, and all 116 franchised and corporate Pinkberry stores located in the United States that were open for at least 12 consecutive months
  • number and percentage of Pinkberry stores in the respective samples that met or exceeded the average and median gross sales

Section I – Background Information

13 Things You Need to Know About the Pinkberry Franchise

Party for Oprah Winfrey

1.  In May, Oprah Winfrey directed a tweet to Pinkberry, asking why the brand discontinued her favorite frozen yogurt flavor, Meyer Lemon. Pinkberry quickly responded and confirmed that while the flavor had been taken off the menu as it was a limited-time flavor for spring, Pinkberry had a surprise planned for Ms. Winfrey.

2.  In June, Pinkberry put together a “Queen Sugar” themed party for Oprah and her Oprah Winfrey Network (OWN) team and announced that the lemon flavor would be added to Pinkberry’s permanent menu. Pinkberry’s theme was in honor of Oprah’s Queen Sugar show on OWN and the brand created a special brown sugar cinnamon crumble topping for the event.

First Store in Ghana

3.  In early July, Pinkberry opened a new shop in Accra, Cantonments, making it the first Pinkberry store to open in the country of Ghana. A second location will open later in the year at the Kumasi City Mall.

4.  The Ghana Pinkberry locations are the result of a deal signed with Golden Peak Investment Capital (GPIC). Kobbina Awuah, Managing Partner at GPIC, said, “We are extremely excited to introduce a leading U.S. brand like Pinkberry to Ghanaians and looking forward to revolutionizing the way Ghanaians think about treats. Ghana being the entry point in Sub-Saharan Africa for Pinkberry, signals the country’s strong fundamentals and attractive demographics.”

5.  The two Ghana stores will serve Pinkberry’s six signature flavors: Original, Strawberry Banana, Raspberry, Pina Colada, Cookies & Cream, and Chocolate Hazelnut, as well as its lineup of toppings.

New Limited-Time Flavors

6.  To keep its menu fresh, Pinkberry often offers limited-time frozen yogurt flavors and other special treats. At the start of the summer season, Pinkberry released its Blueberry Muffin Frozen Yogurt and the Strawberry Hibiscus and Tropical Mango Cold Brew Fruit Teas. The Blueberry Muffin Frozen Yogurt was available from June 16 to July 27 while the teas were available until September 7.

7.  The Cold Brew Fruit Teas are a new line of products from Pinkberry and can be topped with fresh hand-cut fruit and flavored Bursting Boba.

8.  After the Blueberry Muffin Frozen Yogurt left the menu, Pinkberry released a Black Raspberry flavor, which was available until September 7. The limited-time flavor was also featured as a combination called Exotic Raspberry, which came topped with fresh blackberries and raspberries.

Company History

9.  Pinkberry was founded in 2005 by Hye Kyung (Shelly) Hwang and Young Lee in West Hollywood, California. Hwang and Lee were initially interested in opening a formal English teahouse, but after the city denied their application for an alcohol permit, the business partners went with their second idea, a frozen yogurt shop.

10.  Pinkberry is often credited for reviving the frozen yogurt craze of the 1980s and since opening the first store in 2005, numerous rival frozen yogurt chains have popped up around the U.S. Due to the success of the first store, a second Pinkberry location opened in late 2006 and Hwang and Lee started franchising the concept.

11.  In 2007, Pinkberry received a $27.5 million investment from Maveron, the venture fund started by Starbucks founder Howard Schultz, to aid in the brand’s domestic and international expansion. The company opened its first international location in 2009 in Kuwait.

12.  In 2014, co-founder Young Lee ran into trouble and was sentenced to seven years in prison for beating a homeless man in L.A. A year later, Shelly Hwang sold Pinkberry to Kahala Brands; Hwang remains as Pinkberry’s Chief Product Officer and a member of the Board of Directors. Today, there are over 220 Pinkberry shops around the world.

Entrepreneur’s Franchise 500

13.  Pinkberry has only appeared on Entrepreneur’s annual Franchise 500 list three times since it began franchising in 2006. The company debuted on the list in 2014 at No. 251 and ranked again in 2015 and 2016 at No. 245 and No. 228, respectively.

Section II – Estimated Costs

  • Please click here for detailed estimates of Pinkberry 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 Pinkberry’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

  • The average gross sales amounts contained in the table below pertain to the historic performance of all Pinkberry franchised and corporate stores located in the United States that were open for at least 12 consecutive months. The time period measured was December 1, 2015 through November 30, 2016.
  • As of November 30, 2016, there were 122 stores open in the United States. Of the 122 stores, 116 were open for 12 consecutive months and the remaining 6 stores were excluded due to being open for less than 12 consecutive months.
  • All of the stores measured share the following characteristics: (i) all are located in the United States; (ii) all use the same recipes; (iii) all were open for a minimum of 12 months; and (iv) all operate under the same trademarks.
  • The information in the table is based upon gross sales of franchised stores. Some stores had gross sales that exceeded the average gross sales. Pinkberry is not representing that your franchised store will meet or exceed the average gross sales of the franchised stores.
  • The figures in the table below should not be considered a representation of the probable gross sales you should expect or a forecast of future performance. Pinkberry is not representing that your franchised store will meet or exceed the average gross sales in the table below. Your sales may differ from those in the tables below. There is no assurance that you will earn as much as the stores listed in the tables.
  • The table below and information were prepared from sales reports provided to Pinkberry by franchisees. Pinkberry has not audited the information provided by the franchisees.

All Stores – Franchised and Corporate

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