In this FDD Talk post, you’ll learn the following:
- Section I – Background information on the Jamba franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Jamba franchise, based on Item 7 of the company’s 2019 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Jamba franchise, based on Items 5 and 6 of the company’s 2019 FDD
- Section IV – Number of franchised and company-owned Jamba outlets at the start of the year and the end of the year for 2016, 2017, and 2018, based on Item 20 of the company’s 2019 FDD
- Section V – Presentation and analysis of Jamba’s financial performance representations, based on Item 19 of the company’s 2019 FDD, including information on the:
- 2018 average, median, highest, and lowest net sales for the 43 affiliate-owned and 537 franchised traditional Jamba Stores (separately stated) that were owned and in continuous operation for the entire Fiscal Year 2018 by either the franchisor’s affiliate or a franchisee and that had been open and in continuous operation for more than one year as of January 1, 2019
- 2018 average, median, highest, and lowest net sales for the 4 affiliate-owned and 107 franchised non-traditional Jamba Stores (separately stated) that were owned and in continuous operation for the entire Fiscal Year 2018 by either the franchisor’s affiliate or a franchisee and that had been open and in continuous operation for more than one year as of January 1, 2019
Section I – Background Information
24 Things You Need to Know About the Jamba Franchise
Drops “Juice” from Name as Brand Refreshes Image
1. Following a $200 million sale to FOCUS Brands in the fall of 2018, nearly 30-year-old Jamba Juice decided to refresh its image across the board – and even change its name. In June 2019, the company announced that it will now go by just “Jamba,” accompanied by the tagline “Smoothies, Juices and Bowls.” Jamba Juice is also touting a new app, updated store design, and elevated customer experience.
2. Jamba said the simplified name is intended to reflect a wider array of offerings. According to the company, “It’s one of many steps to support the brand’s renewed commitment to more balanced ingredients that will include expanded plant-based options and reduced sugar selections among other innovations.”
3. Geoff Henry, president of Jamba, added, “We’ve been offering balanced ingredients on the go for almost 30 years and must continue to evolve to meet our guests’ ever-changing definition of wellness. We’re staying true to our heritage as an innovator in the space and refreshing the brand to stay focused on how we can make it easier, better and faster for guests to live a more active lifestyle. We’re proud to have launched the smoothie and juice category three decades ago and can’t wait to join our guests’ wellness journey for decades to come.”
4. Jamba also says that customers had been calling the brand just Jamba for quite some time, but the company finally decided to make it official. Along with the name change is a new logo, updated website, and menus. According to the press release, new packaging and store signage was expected to follow later in the summer.
5. In addition to refreshing the brand, Jamba debuted a new, modernized menu of smoothies, juices, and bowls catering to a broad spectrum of customers. One key change was spotlighting clear categories on the menu for customers to access: Power (enhanced smoothies), Classic favorites, and expanded Plant-Based items, are among the call outs. The menu brings in new additions such as the plant-based Vanilla Blue Sky Smoothie and Bowl with naturally occurring blue spirulina. The Watermelon Breeze Smoothie made its return as well.
6. Jamba said the new menu was crafted with help from an in-house registered dietitian “to feature fresh, high quality whole-food ingredients that are free from high fructose corn syrup, artificial sweeteners, artificial flavors, and artificial colors.” New menu additions will continue to launch throughout 2019, including expanded plant-based options, reduced sugar selections, nutritious breakfast additions, and seasonally-inspired items.
7. This past summer also marked the introduction of a modernized store design, complete with new logo, as well as a refreshed restaurant experience. The new store design features an “authentic and approachable ambiance inspired by our local juice shop roots,” the company said. It includes touches of light wood, freshness cues, and “colorful and expressive elements” as a backdrop.
8. Jamba’s fresh logo and whirl is a modern interpretation of the classic logo, and promotes clean, handwritten script, and a new emerald green brand color. The evolved “whirl” draws from hues of fruits and vegetables. Existing store remodels will begin adopting the new look and logo later in the year, Jamba said.
9. On the tech front, Jamba plans to revamp its e-commerce platform to become more responsive and easier to access. The new website is mobile-friendly and the app was built from the ground up to include the customization and personalization features guests asked for, the company said. This includes order-ahead capabilities, nutritional preferences, integrated gift cards, and a new loyalty program powered by Punchh.
Rounds Out Executive Leadership Team
10. Near the end of January 2019, FOCUS Brands, Jamba’s parent company, announced that the executive leadership team for its Jamba brand was now complete with the hiring of Geoff Henry as the company’s president, Shivram Vaideeswaran as chief marketing officer, and the promotion of Jaime Denney to VP of operations. Consistent with FOCUS Brands’ structure, Henry will report to Kat Cole, president and COO, North America, FOCUS Brands.
11. FOCUS Brands acquired Jamba Juice in a tender offer transaction in September of 2018, taking the company private. Since the acquisition, FOCUS Brands has built a talented Jamba Juice leadership team and accelerated key planned investments, including an integrated, elevated consumer-facing digital ecosystem and consumer-driven healthier menu innovation, as well as a refreshed brand and store design that will enhance the customer experience. Kat Cole said, “I am thrilled to have a strong leadership team in place to advance the innovation, growth and fan love in this beloved brand.”
12. Geoff Henry comes to Jamba from Coca Cola, where he led lifestyle and beverage business growth in the water, tea and coffee divisions with large brands such as Honest Tea and Honest Kids, and entrepreneurial brands like Peace Tea. Henry previously held marketing and brand roles at Colgate-Palmolive and finance roles at JP Morgan in real estate investment banking.
13. Shivram Vaideeswaran was most recently CMO of Blaze Pizza following his time at Tender Greens and Taco Bell, where he held menu, innovation, and marketing roles during high-growth years, building lifestyle food brands in primarily franchised environments.
14. Jaime Denney has been promoted to VP of operations after previous operations and leadership roles at Jamba Juice, Tropical Smoothie Café, Aramark, and Starbucks. Denney brings over 16 years of experience in the food and beverage industry to her new role.
15. Steve DeSutter, CEO of FOCUS Brands, added, “Leadership of our brands is critical to building guest-centered businesses. Geoff, Shivram and Jaime are excellent additions. Their talent and industry experiences, combined with their passion for health and wellness, will be a powerful combination in fueling Jamba’s continued success.”
Teams Up with Paytronix
16. In early February 2019, Paytronix Systems, Inc., the most advanced digital guest experience platform, announced that Jamba was deploying the Paytronix Platform. Tight integration with Jamba’s new Toast Point-of-Sale (POS) platform will enable the company to increase sales and redemptions of gift cards within all touch points while upgrading from its previous POS platform.
17. With more than a decade of proven experience in migrating large gift card and comp card programs, Paytronix eliminates the complexities of gift activity across franchisees and third-party gift sales channels by automating accounting activities and discount tracking to streamline reconciliation. Furthermore, its proprietary money movement functionality allows Paytronix to efficiently manage back-end financial reconciliation of sales and redemptions between franchise locations.
18. Jyoti Lynch, SVP and chief information officer at Jamba, said, “Jamba Juice has multiple types of comp programs and gift card offerings that give our guests the convenience of pre-paid, cashless purchases. We needed to automate the complex, manual process of accounting and reporting. Paytronix was not only the best choice to tackle the challenges of our POS platform migration and program’s backend administration, but also to position our program for future growth through their robust integration capabilities.”
19. Jamba’s newly-overhauled stored value program will increase customer engagement and play a major role in driving incremental gift card sales and redemptions. Paytronix will enable Jamba gift card sales across existing and multiple new distribution channels, as well as numerous POS platforms, including stand-alone terminals, Jamba Juice mobile apps, online ordering, website sales, and sales from other third-party channels. Improved reporting and fraud prevention capabilities provided by the Paytronix platform also improve Jamba’s overall program efficiency.
20. Jamba, formerly Jamba Juice, was founded in 1990 by Kirk Perron in San Luis Obispo, California. At the time, Perron was an avid cyclist and healthy-lifestyle advocate at California Polytechnic State University, San Luis Obispo (Cal Poly). Perron had always wanted to start his own business and decided to open a store that only sold smoothies. To help with the business, Perron recruited three friends: Kevin Peters, Joe Vergara, and Linda Ozawa Olds.
21. Initially, there was some uncertainty over the success of Jamba Juice, but the store eventually built up a loyal customer base and inquiries over franchising began. By the end of Jamba Juice’s second year, the business was turning a profit and Perron was ready to expand. In 1993, Perron began franchising the Jamba Juice concept and the first franchised store opened in Irvine, California. Jamba Juice grew relatively quickly and by the end of 1994, there were nearly 20 stores in operation.
22. Over the next decade, Jamba Juice continued to grow and in 2001, the company acquired Zuka Juice, Inc. and converted all existing locations to the Jamba Juice brand. As Jamba Juice continued to grow, the company was acquired by Services Acquisition Corp. International for $265 million in 2006. Two years later, Jamba Juice began expanding its menu beyond smoothies to include wraps, sandwiches, salads, and flatbreads.
23. Recently, in the fall of 2018, Jamba Juice was sold to Atlanta-based FOCUS Brands. In June 2019, Jamba Juice dropped the “Juice” part of its name to reflect the brands wider array of offerings.
Entrepreneur’s Franchise 500
24. Jamba ranked No. 225 on Entrepreneur’s 2019 Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of Jamba franchise costs, based on Item 7 of the company’s 2019 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on Jamba’s initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2019 FDD.
Section IV – Number of Franchised and Company-Owned Outlets
- Outlets at the Start of the Year: 706
- Outlets at the End of the Year: 726
- Net Change: +20
- Outlets at the Start of the Year: 726
- Outlets at the End of the Year: 749
- Net Change: +23
- Outlets at the Start of the Year: 749
- Outlets at the End of the Year: 729
- Net Change: -20
- Outlets at the Start of the Year: 70
- Outlets at the End of the Year: 66
- Net Change: -4
- Outlets at the Start of the Year: 66
- Outlets at the End of the Year: 53
- Net Change: -13
- Outlets at the Start of the Year: 53
- Outlets at the End of the Year: 52
- Net Change: -1
Section V – Financial Performance Representations (Item 19, 2019 FDD) and Analysis
- Parts 1 and 2 present unaudited information about the average Net Sales of certain Specified Traditional and Specified Non-Traditional franchised and affiliate-owned Jamba Juice Stores for fiscal year beginning January 3, 2018 and ending January 1, 2019 (“Fiscal Year 2018”).
- “Specified Traditional Stores” and “Specified Non-Traditional Stores” are Jamba Juice Stores that were owned and in continuous operation for the entire Fiscal Year 2018 by either JCC or a franchisee and that had been open and in continuous operation for more than one year as of January 1, 2019.
- Specified Traditional and Specified Non-Traditional Stores do not include Stores sold to or acquired from franchisees during Fiscal Year 2018.
- Jamba Juice selected Stores that were opened and in continuous operation for more than one year as of January 1, 2019 because, unlike other quick service, casual restaurants which open with higher initial revenue followed by a period of normalization, Jamba Juice Stores tend to open with lower sales volumes and build sales volumes over time, particularly in new markets.
- There were a total of 580 Specified Traditional Stores and 139 Specified Non-Traditional Stores operating on January 1, 2019, which represent 96% of the 602 Traditional Stores, 78% of the 179 Non-Traditional Stores, and 92% of the 781 total Stores in operation on that date.
- As used in Parts 1 and 2, “Net Sales” has the meaning given to it in the Franchise Agreement. Net Sales reflects historical revenue and is based on unaudited reports of affiliate-owned Stores prepared by the franchisor’s or JCC’s personnel and on unaudited reports of Net Sales from franchisees.
- The franchisor has not independently confirmed Net Sales reported by franchisees, which it has relied on in creating this Item 19.
Part 1 – Specified Traditional Stores – Affiliate-Owned
- As of January 1, 2019, there were 45 affiliate-owned Traditional Stores in operation. Of these 45 affiliate-owned Traditional Stores, 43 affiliate-owned Traditional Stores were in continuous operation throughout the entire Fiscal Year 2018 and have been included in the data in this table.
- This table does not include one affiliate-owned Traditional Store that was resold by JJC to franchisees during Fiscal Year 2018, two affiliate-owned locations that were opened during Fiscal Year 2018, and one affiliate-owned Traditional Store that was closed during Fiscal Year 2018.