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 2020 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 2020 FDD
- Section IV – Number of franchised and company-owned Jamba outlets at the start of the year and the end of the year for 2017, 2018, and 2019, based on Item 20 of the company’s 2020 FDD
- Section V – Presentation and analysis of Jamba’s financial performance representations, based on Item 19 of the company’s 2020 FDD, including information on the:
- 2019 average, median, highest, and lowest net sales for the 527 Traditional, 104 Non-Traditional, 81 Mall (Traditional and Non-Traditional), and 46 Refranchised Jamba Stores (separately stated) that were owned and in continuous operation for the entire Fiscal Year 2019 by a franchisee and that had been open and in continuous operation for more than one year as of December 29, 2019
- 2019 average net sales, cost of goods sold, gross profit, labor, rent, other expenses, total expenses, and net operating income for the 355 franchised Traditional Jamba Stores that were in continuous operation throughout the entire Fiscal Year 2019 and provided complete data necessary to be included in the average profit and loss statement
Section I – Background Information
19 Things You Need to Know About the Jamba Franchise
Signs Agreement to Expand in College Towns
1. In early November 2019, Jamba announced that it had signed a franchise agreement with multi-unit operator Kurt Wilson to expand in college markets across the southeast. Kurt Wilson, owner and president of NA Foodservice Inc. and a multi-unit Zaxby’s franchisee, will open five Jamba locations in Alabama and Georgia.
2. “Since we announced our brand evolution in June, we’ve been working hard to identify the right franchisees that can help our brand expand in key markets across the country,” said Geoff Henry, president of Jamba. “Kurt has a long history of success with Zaxby’s and we know he’s the right partner that will help us establish a deeper presence in college towns in the southeast. We welcome Kurt to the Jamba family and look forward to seeing his success.”
3. A franchisee with Zaxby’s for more than 18 years, Wilson has helped the fast-food alternative expand its footprint in Alabama. Now, along with his partner Michael Santiana, Wilson will help Jamba build a presence in Auburn, AL; Tuscaloosa, AL; Athens, GA; Kennesaw, GA; and Marietta, GA. All five units are anticipated to open in 2020 and 2021.
4. According to Wilson, “We’ve been watching Jamba’s evolution over the years very closely. Once we learned of the new store design, menu innovation and enhanced technology, we were sold on becoming Jamba franchisees. Michael and I are honored to become part of this growing family and we know we’ve selected ideal markets for this brand. Smoothies, bowls and bites are perfect for the college community. College students live a life that is fast-paced and need something on-the-go. We’re excited to provide them with that opportunity.”
Launches Whirl’d of Good Buy One, Give One Program to Honor Frontline Heroes
5. In early May 2020, Jamba announced its partnership with Oikos Greek Yogurt and So Delicious Dairy Free to help honor frontline heroes amid the ongoing COVID-19 pandemic. To give back to the nurses, doctors, teachers, mail carriers, grocery workers, and more, Jamba fans could buy a smoothie or bowl for delivery via the Jamba app or on jamba.com from May 6-13, coinciding with this year’s National Nurses Week. For every smoothie or bowl purchased, Jamba will donate a smoothie to one of these heroes.
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6. Geoff Henry, president of Jamba, said, “We’re honored to partner with Danone and their Oikos and So Delicious brands to show our appreciation for everyone putting their lives on the line to keep us safe and deliver goods. Since the start of this COVID-19 crisis we have been eager and excited to support our local heroes, bringing smiles to their faces and giving them a boost during their oftentimes long and challenging shifts. We’re looking forward to reaching even more heroes by delivering thousands of smoothies to communities across the country.”
7. Both Oikos and So Delicious are part of Danone North America, a purpose-driven company with a portfolio of dairy and plant-based foods. Oikos has naturally-sourced, quality ingredients and is a key ingredient in Jamba’s smoothie bowls. A leader in dairy-free, plant-based offerings for over 30 years, So Delicious is the brand behind Jamba’s plant-based offerings, providing key dairy-free ingredients including coconut milk and almond milk for fan-favorite menu items.
8. The partnership with Oikos and So Delicious builds on Jamba’s pre-existing Whirl’d Of Good campaign, which aims to show appreciation for community members on the front lines of the COVID-19 pandemic. Originally launched in March, the campaign’s goal is to deliver 30,000 smoothies by the brand’s 30th birthday celebration on June 21.
9. Jamba has already shared a Whirl’d Of Good by delivering more than 3,000 smoothies in surprise drops made to heroes at local hospitals, assisted living facilities, medical centers, mail and distribution centers, grocery stores, and more in cities across the country. Partnering with Oikos and So Delicious will help the smoothie leader expand its reach and deliver more smoothies to those serving its local communities.
10. Luisa Robinson, marketing director of strategic growth channels for Danone North America, said, “Danone North America is on a mission to bring health through food to as many people as possible. We’re proud to partner with Jamba on this initiative and recognize those that are going above and beyond to serve their communities during this time.”
Partners with Oatly to Bring Oatmilk to Jamba Locations
11. In mid-September 2019, Jamba announced its partnership with Oatly – a vegan, plant-based milk alternative made from certified gluten-free oats. Through the partnership, Jamba locations across the country will carry Oatly, giving guests more dairy-free options than ever before. The exclusive partnership marks the first national smoothie chain partnership for Oatly. In the last year alone, the popular dairy alternative has taken over cafes and grocery stores. Now, Jamba guests can enjoy Oatly in their favorite smoothie for a delightful, creamy texture and rich flavor.
12. In addition to offering a wide array of delicious smoothies, juices, and bowls, Jamba has always empowered guests to customize any order to their own individual dietary restrictions or personal preferences. Recent findings show that 65% of guests seek out plant-based, dairy-free drinks in stores – now Jamba is meeting that growing demand and reaching a broader spectrum.
13. Guests can swap Oatly into their favorite smoothie for a delicious plant-based twist or select from two new oat milk-forward flavors: Smooth Talkin’ Mango and Matcha Lemon Squeeze. Blended with Oatly oatmilk, mangoes, pineapples, and organic agave, Smooth Talkin’ Mango is plant-based and gluten-free. Matcha Lemon Squeeze is a refreshing citrus treat made with lemonade, Oatly oatmilk, lime sherbet, fat-free vanilla frozen yogurt, mangoes, and matcha green tea. Meeting Jamba’s standards of smoothie excellence, each recipe is free from high-fructose corn syrup, trans fats, fruit syrup, and artificial ingredients.
14. Geoff Henry, president of Jamba, said, “We are excited to have Oatly on board for this next step in our menu evolution at Jamba and we are proud to be the first national smoothie chain to carry Oatly oatmilk. We’ve been talking with our guests and through research have seen first-hand the growing demand for more milk-alternatives. Oatly is a natural partner for us in our effort to create more plant-based options and meet this demand. Our partnership will not only create an elevated experience for guests, but also help inform new markets of the benefits of oatmilk and reinforce Jamba’s presence as a leader in the smoothie category.”
15. Mike Messersmith, general manager of Oatly, added, “We were excited to hear about Jamba’s commitment to expanding their plant-based options and we’re so happy they looked to Oatly to play a role. We know that people are looking for fun and delicious ways to shift to a more plant-based diet for their health and the health of the planet. By working with Jamba, we’ll be able to help a whole new group of people do just that.”
16. Jamba, formerly Jamba Juice, was founded as the Juice Club in 1990 by Kirk Perron in San Luis Obispo, California. Perron had always wanted to start his own business and had come up with the idea for Jamba while he was a senior at California Polytechnic State University, San Luis Obispo. Since he was an avid cyclist and healthy lifestyle advocate, Perron felt that a business focusing solely on smoothies would be successful. Perron’s idea took off and by the end of Jamba’s second year, the company was turning a profit.
17. Perron was ready to expand Jamba at that time and decided to start franchising the concept in 1993. By the following year, Jamba had grown to 16 locations. Also around that time, Perron changed the brand’s name from Juice Club to Jamba Juice. Over the next few years, Jamba continued to grow and in 1999, the company acquired Zuka Juice, Inc. This acquisition helped fuel Jamba’s national growth.
18. In 2006, Jamba was acquired by Services Acquisition Corp. International for $265 million. Under the new ownership, Jamba expanded its menu to include food such as wraps, sandwiches, and flatbreads. More than a decade later, in 2018, Jamba was acquired by Atlanta-based FOCUS Brands. The following year, Jamba launched a massive rebranding effort, which included a new look, new menu, and new name – the company dropped “Juice” from its name to reflect its range of offerings beyond smoothies and juices. Today, there are Jamba locations across the country.
Entrepreneur’s Franchise 500
19. Jamba ranked No. 314 on Entrepreneur’s 2020 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 2020 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 2020 FDD.
Section IV – Number of Franchised and Company-Owned Outlets
- Outlets at the Start of the Year: 716
- Outlets at the End of the Year: 739
- Net Change: +23
- Outlets at the Start of the Year: 739
- Outlets at the End of the Year: 719
- Net Change: -20
- Outlets at the Start of the Year: 719
- Outlets at the End of the Year: 777
- Net Change: +58
- 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
- Outlets at the Start of the Year: 52
- Outlets at the End of the Year: 2
- Net Change: -50
Section V – Financial Performance Representations (Item 19, 2020 FDD) and Analysis
- Parts 1, 2, and 3 present unaudited information about the average Net Sales of certain Specified Traditional and Specified Non-Traditional franchised Stores for fiscal year beginning December 31, 2018 and ending December 29, 2019 (“Fiscal Year 2019”).
- “Net Sales” includes all revenues generated by a Store or conducted from or with respect to a Store, whether the sales are evidenced by cash, check, credit, charge, account, barter, or exchange, but does not include (a) the initial sales or reloading of gift cards, (b) coupon discounts, (c) the sale of food or merchandise for which refunds have been made in good faith to customers, (d) the discounted portion of employee meals, (e) sales, meals, use, or excise tax imposed by a governmental authority directly on sales and collected from customers, provided that the amount for the tax is added to the selling price or absorbed therein and is actually paid by you to a governmental authority, or (f) the sale of equipment used in the operation of the Store.
- “Specified Traditional Stores” and “Specified Non-Traditional Stores” are franchised Stores that were owned and in continuous operation for the entire Fiscal Year 2019 by a franchisee and that had been open and in continuous operation for more than one year as of December 29, 2019.
- Specified Traditional and Specified Non-Traditional Stores do not include Stores sold to or acquired from franchisees during Fiscal Year 2019.
- Jamba selected Stores that were opened and in continuous operation for more than one year as of December 29, 2019 because, unlike other quick service, casual restaurants which open with higher initial revenue followed by a period of normalization, Stores tend to open with lower sales volumes and build sales volumes over time, particularly in new markets.
- There were a total of 527 Specified Traditional Stores and 104 Specified Non-Traditional Stores operating on December 29, 2019, which represent 87% of the 604 Traditional Stores, 60% of the 173 Non-Traditional Stores, and 81% of the 779 total Stores in operation on that date.
Part 1 – Specified Traditional Stores – Franchised
- As of December 29, 2019, there were 604 franchised Traditional Stores in operation. Of these 604 franchised Traditional Stores, 527 franchised Traditional Stores were in continuous operation throughout the entire Fiscal Year 2019 and have been included in the data in this table.
- This table does not include 21 new franchised Traditional Stores that were opened by a franchisee during Fiscal Year 2019, 12 franchised Traditional Stores that were not in continuous operation throughout the entire Fiscal Year 2019, 44 affiliate-owned Traditional Stores that were refranchised during Fiscal Year 2019, and 18 other franchised Traditional Stores that were closed by a franchisee during Fiscal Year 2019. No franchised Traditional Stores both opened and closed in Fiscal Year 2019.