In this FDD Talk 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 2019 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 2019 FDD

• Section IV – Number of franchised and company-owned Menchie’s 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 Menchie’s financial performance representations, based on Item 19 of the company’s 2019 FDD, including information on the:

• 2018 average gross sales earned by the 296 franchised Menchie’s Frozen Yogurt locations that were procured under Menchie’s Real Estate 2.0 platform, were open and operating for the entire Measurement Period from January 1, 2018 until January 6, 2019, and were not located in non-traditional locations

• 2018 actual gross sales earned by Menchie’s Frozen Yogurt’s only company-owned location in operation during the entire Measurement Period

Section I – Background Information

12 Things You Need to Know About the Menchie’s Franchise

Partners with HI-CHEW to Release Limited-Time Flavor

1.  At the end of July 2019, HI-CHEW, a chewy candy brand from Japan, and Menchie’s announced that the brands had teamed up to release a limited-time summer frozen yogurt: HI-CHEW Dragon Fruit Frozen Yogurt. As the vibrant fruit has grown in popularity, the limited-edition HI-CHEW Dragon Fruit frozen yogurt flavor arrived at the perfect time, offering a burst of refreshing fruit flavor with a sweet tartness in every spoonful. The Menchie’s HI-CHEW Dragon Fruit frozen yogurt flavor was available at Menchie’s stores nationwide throughout the month of July.

2.  Inspired by HI-CHEW’s new Dragon Fruit candy, the team at Menchie’s worked closely with HI-CHEW’s flavor experts to develop a delicious frozen yogurt that brings the candy’s burst of fruit juices to life. The limited-time flavor highlighted the rich pink color of the real tropical fruit, combined with the creamy, cooling delight frozen yogurt naturally delivers. This nonfat flavor contains no artificial flavors, no artificial colors, and no high-fructose corn syrup.

3.  The HI-CHEW Dragon Fruit candy debuted earlier in 2019 as part of the HI-CHEW Superfruit Mix, which also includes Açaí and Kiwi. The candy flavor made its way to the United States after winning HI-CHEW’s 2018 East Meets West Flavor Challenge, in which consumers nationwide voted for the top Japanese flavor they would like to see available in 2019.

4.  Tatsuya Takamiya, chief marketing officer of Morinaga America, Inc. (maker of HI-CHEW candies), said, “We are continuously looking for creative opportunities to excite and attract new HI-CHEW fans, and we’re intrigued by the idea of reimagining HI-CHEW’s true-to-fruit flavors in an unexpected way. We’re thrilled to collaborate with Menchie’s to bring a refreshing new way to enjoy HI-CHEW Dragon Fruit. It’s also exciting to see the Dragon Fruit flavor trending outside of candy and being introduced in other categories such as in beverages and snacks.”

5.  Elizabeth Berry, senior director of marketing for Menchie’s, added, “Menchie’s is committed to providing delicious, high-quality, innovative frozen yogurt flavors that make our guests smile. There’s always a new flavor to taste at our stores and we’re thrilled to partner with HI-CHEW this summer on the new Dragon Fruit frozen yogurt flavor that we know will surprise and delight our fans.”

Honors Veterans and Military Personnel on Veterans Day

6.  For Veterans Day 2019, Menchie’s honored servicemen and women with free frozen yogurt. All veterans and active-duty military were able to receive their first six ounces free when they presented their valid military ID or proof of service at the time of purchase.

7.  According to Amit Kleinberger, CEO of Menchie’s Global Headquarters, “Menchie’s is all about spreading smiles, so what better way to spread smiles than by offering a sweet treat to our servicemen and servicewomen who protect our country and keep us safe. We owe everyone who has served and everyone who is serving a debt of gratitude. This is one small way that we can thank our heroes and show them our appreciation for all that they do.”

Offers More Than Just Frozen Yogurt and Toppings with Frozen Yogurt Cakes

8.  Menchie’s stands out from its frozen yogurt competitors by offering more than just frozen yogurt and toppings. Since 2016, Menchie’s has been offering frozen yogurt cakes. The line of cakes started with the brand’s simple Celebration Cakes, which come in ready-to-go options.

9.  The cakes are also fully customizable and can feature any combination of flavors and toppings. In addition to standard celebration designs, Menchie’s can make custom photo cakes as well as licensed character cakes.

Company History

10.  Menchie’s was founded in 2007 by husband and wife team Adam and Danna Caldwell in Los Angeles, California. The Caldwells were inspired to open their own self-serve frozen yogurt shop after having their first date at a local frozen yogurt place. A year later, in 2008, the Caldwells began franchising Menchie’s. To help the business grow, the Caldwells brought in Amit Kleinberger as CEO, a role he still holds today.

11.  Today, Menchie’s has grown around the world and has locations across the United States, Canada, Puerto Rico, Japan, India, China, Bahrain, the Bahamas, Kuwait, United Arab Emirates, Kingdom of Saudi Arabia, and Qatar.

Entrepreneur’s Franchise 500

12.  Menchie’s did not rank on Entrepreneur’s 2019 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of Menchie’s 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 Menchie’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

Franchised

2016

• Outlets at the Start of the Year:  394
• Outlets at the End of the Year:  418
• Net Change:  +24

2017

• Outlets at the Start of the Year:  418
• Outlets at the End of the Year:  430
• Net Change:  +12

2018

• Outlets at the Start of the Year:  430
• Outlets at the End of the Year:  424
• Net Change:  -6

Company-Owned

2016

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  1
• Net Change:  0

2017

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  1
• Net Change:  0

2018

• Outlets at the Start of the Year:  1
• Outlets at the End of the Year:  1
• Net Change:  0

Section V – Financial Performance Representations (Item 19, 2019 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 January 1, 2018 until January 6, 2019 (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 6, 2019, Menchie’s had 424 franchised locations operating domestically under the Menchie’s trademarks. Of these 424 locations, 395 were open and operating for the entire Measurement Period and were not located in non-traditional locations.

• 296 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 296 of the 395 franchised locations that were procured under Menchie’s Real Estate 2.0 platform.

• In 2012, Menchie’s changed its real estate site criteria.