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

• Section I – Background information on the TCBY franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a TCBY 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 TCBY franchise, based on Items 5 and 6 of the company’s 2020 FDD

• Section IV – Number of franchised and company-owned TCBY 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 TCBY’s financial performance representations, based on Item 19 of the company’s 2020 FDD, including information on the:

• average, median, high, and low gross revenue during the 52-week period from June 30, 2019 to June 27, 2020 (i.e. TCBY’s most recent fiscal year) for the highest quartile, second highest quartile, third highest quartile, lowest quartile, and all 105 franchised traditional TCBY stores that reported their revenue for the full 52-week period ended June 27, 2020

• average, median, high, and low gross revenue during the 38-week period from June 30, 2019 to March 21, 2020 (i.e. mostly before the COVID-19 pandemic) for the highest quartile, second highest quartile, third highest quartile, lowest quartile, and all 105 franchised traditional TCBY stores that reported their revenue for the full 52-week period ended June 27, 2020

• average, median, high, and low gross revenue during the 14-week period from March 22, 2020 to June 27, 2020 (i.e. during the COVID-19 pandemic) for the highest quartile, second highest quartile, third highest quartile, lowest quartile, and all 105 franchised traditional TCBY stores that reported their revenue for the full 52-week period ended June 27, 2020

Section I – Background Information

18 Things You Need to Know About the TCBY Franchise

Franchisee Finds Success by Investing in an Internship Program

1.  In early February 2020, QSR Magazine interviewed TCBY franchisee Jen Howard, who established an internship program when she realized she needed marketing help. Howard found local high schoolers to be digital savvy and quick to learn across several valuable categories. Three years prior, Howard launched an internship program, which has been incredibly successful. Howard took some time to chat with QSR about the initiative, its impressive ROI, and how franchisees can benefit from engaging local people both from a customer and labor standpoint.

2.  Howard first became a TCBY franchisee in 2011 when she and her husband moved back home to Illinois. The couple were looking to open a business that would be unique and fun for the community. According to Howard, “Self-serve frozen yogurt shops were just starting to take off and when I learned that my favorite froyo from the 1980s had a self-serve model, I was sold on the idea of opening one.”

3.  When asked where she got the idea for the internship program, Howard said, “It all began when I was asked to participate in a senior marketing project at DePaul University in Chicago. The professor asked me to present my eight biggest marketing challenges to the class at the beginning of the semester. At the time, my challenges were getting young adults to think of TCBY as their first choice for a treat (instead of mainstream options like pizza, French fries, and tacos) and earning more followers on social media.”

4.  “Within a six-week timeframe, eight groups of students strategized, brainstormed, and presented recommendations to address my marketing challenges with TCBY. My favorite recommendation ended up being to hire a high school intern to help with social media. As an employer and advocate for high schoolers for nearly a decade, I was completely on board and contacted the high school district to become one of the first companies to participate in a local business-student internship program,” added Howard.

5.  She continued, “The internship program takes place throughout the summer months when students are on break and they work all summer to meet our business goals of one, attracting young customers, two, increasing social media followers, and three, increasing social media engagement to maximize foot traffic in-store. The interns have provided invaluable work for my business such as executing photo shoots for content creation and the design of a bounce-back coupon with the store’s social media QR codes.”

6.  Howard recruits employees from the local high school. She said, “A representative from the high school’s district reaches out to teachers in arts, graphics and photography departments who then recommend students and they submit resumes. The high school narrows it down to 2-3 candidates and then I interview the students and make a selection that best fits the business.”

7.  Howard explained, “The intern works a few hours a day at the high school administrative building and reports to the Multimedia Communications Specialist at the school for training with graphic packages and various media programs. Then they spend a few hours a week taking pictures and videos at TCBY and propose final media posts and marketing materials for me to approve. While the intern is paid by my TCBY business, they receive training from both the Communications Department at the high school and myself, so it is a customized internship tailored for my store.”

8.  Initially, Howard’s goal with the internship program was to offer high school students opportunities that were usually held by college students. Howard added, “I also was looking for someone who could take on the daily task of managing my social media sites. I was pleasantly surprised by the marketing ideas outside of social media that the intern and the Communication Specialist presented to me.”

9.  Howard said that the program was an important way for her to connect with her local community. She added, “It is very important to let the community know, that as a business owner, I support the school district and the students in our community. Since the first internship, I have been asked to speak at a public forum on the benefits of the internship and featured in local media, all spreading the word that TCBY cares about the community and the people in it.”

10.  Howard offered this advice for franchisees just starting out, “I would say, reach out to your Chamber of Commerce to see if they have education programs with the local school districts and get involved in those committees in whatever capacity you can. I’d also advise contacting the local high school to see if they have internship programs and if they don’t, suggest starting one with your business at the helm.”

Honors Coffee Fans with New Flavor

11.  In mid-June 2019, TCBY introduced a new limited edition, hand-scooped flavor starting in June to add to the brand’s portfolio of frozen yogurt flavors: Cold Brew Coffee. The new flavor offers a taste of smooth coffee with cream and sugar notes and includes real micro-ground Colombian coffee. TCBY fans can enjoy the mouthwatering ode to cold brew coffee by pairing the frozen yogurt base with an assortment of toppings to build their own coffee-house creation.

12.  Cold Brew Coffee combinations like Caramel Latte (caramel drizzle and whipped cream), Mocha Delight (chocolate drizzle), and Cold Brew Crunch (frozen yogurt with crushed Oreo cookies) will satisfy any sweet tooth. Introducing the Cold Brew Coffee hand-scooped flavor is another way TCBY caters to all palates, sweet or savory.

13.  Josh Kirschbaum, chief executive officer of Famous Brands International, parent company of TCBY, said, “We are delighted to bring the Cold Brew Coffee flavor to our customers and offer a sweet, frozen pick-me-up for an afternoon treat. Cold brew’s popularity has been growing tremendously, so welcoming the flavor into TCBY is a natural and delicious progression for us.”

Offers Several Different Store Designs to Meet Franchisees’ Needs

14.  TCBY has a few different store designs that franchisees can choose from:

• Counter Service – This is TCBY’s original concept. It offers the full frozen yogurt treat menu that includes the creamy soft-serve, deliciously thick hand-scooped, sundaes, shakes, and other nostalgic “soda shop” options that bring the kid out in everyone. Indoor seating and drive-thru options are available.

• Self-Serve – This is TCBY’s interactive experience. Guests can create their own unique healthy (or indulgent) treat from a wide selection of flavors and toppings. Also includes the full frozen yogurt treat menu. Drive-thru is an available add-on to Counter Service and Self-Serve models.

• Kiosks – With this option, franchisees can take TCBY anywhere. Turnkey, low maintenance construction project. Common locations are in traditional malls and outdoor shopping complexes.

• Non-Traditional – With non-traditional locations, franchisees can surprise customers with the frozen treat they’re craving by being in the right spot at the right time. Flexible size and design to meet the needs of unique locations. Common locations are in airports, travel plazas, convenience stores, hospitals, and universities.

Company History

15.  TCBY (The Country’s Best Yogurt) was founded in 1981 by Frank D. Hickingbotham in Little Rock, Arkansas. Hickingbotham was already an experienced entrepreneur and was looking for his next business venture when he first discovered frozen yogurt at a Dallas Neiman Marcus department store. Initially, TCBY was called “This Can’t Be Yogurt!” and Hickingbotham used the same supplier as Neiman Marcus for his frozen yogurt.

16.  Hickingbotham’s frozen yogurt venture was an instant success and the following year he began franchising the concept. A few years later, the company changed its name to TCBY following a lawsuit from I Can’t Believe It’s Yogurt! By the end of the 1980s, TCBY had grown to over 1,582 stores. TCBY continued to expand over the next decade both domestically and internationally.

17.  In early 2000, TCBY was acquired by Mrs. Fields Famous Brands. At the company’s height in 2001, there were nearly 2,000 stores, but by the following decade, this number shrank as numerous underperforming stores were closed. However, TCBY is still one of the largest retailers of frozen yogurt in the United States.

Entrepreneur’s Franchise 500

18.  TCBY did not rank on Entrepreneur’s 2020 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of TCBY 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 TCBY’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

Franchised

2017

• Outlets at the Start of the Year:  289
• Outlets at the End of the Year:  263
• Net Change:  -26

2018

• Outlets at the Start of the Year:  263
• Outlets at the End of the Year:  230
• Net Change:  -33

2019

• Outlets at the Start of the Year:  230
• Outlets at the End of the Year:  202
• Net Change:  -28

Company-Owned

2017

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

2018

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

2019

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

Section V – Financial Performance Representations (Item 19, 2020 FDD) and Analysis

• As of the end of TCBY’s most recent fiscal year (June 27, 2020), there were 202 Stores in operation, all of which were owned by third-party franchisees.

• TCBY excluded from that group 7 Stores for which it did not have results for the full fiscal year (either because their results for the full fiscal year were not available to TCBY, or because they opened during TCBY’s last fiscal year).

• Of the remaining 195 Stores, TCBY excluded from the data set 90 non-traditional Stores (those that, for example, are only open part time, that operate seasonally, that are located in non-traditional locations such as gas stations, that are operated as an add-on to another primary brand, and/or are co-branded with another concept).

• Those Stores were excluded for two reasons: (1) because of the wide variation in factors that made them non-traditional and (2) because the focus of TCBY’s sales efforts is on selling franchises for traditional locations. As a result, TCBY does not make financial performance representations with respect to non-traditional Stores.

• The data used to formulate the information in this Item 19 was derived from the remaining 105 traditional Stores, including both retail Stores and Kiosks which, from a revenue perspective, do not experience material differences.

• To determine the average Gross Revenue for each group shown in the table below, TCBY took the group’s total Gross Revenue (as that term is defined in the Franchise Agreement that you will sign), then divided that number by the number of Stores in the group. For example, for the 105 Stores that made up the entire data set, TCBY added the Gross Revenue of all 105 Stores for the entire fiscal year (the 52-week period ending June 27, 2020), then it divided that number by 105.

• “Gross Revenue” means the aggregate of all revenue, in whatever form (including the value of all barter, exchange, trade or other credit), attributed to the operation of your Store (whether or not in compliance with the Franchise Agreement) based on the gross (undiscounted) price of all products and services sold at or through your Store and all other revenue sources, but excluding all federal, state or municipal sales, use or service taxes collected from customers and paid to the appropriate taxing authority.

• Gift certificate, gift card and similar program payments will be included in Gross Revenue as and in accordance with the policies set forth from time to time in the Operations Manual.

• Gross Revenue also includes all insurance proceeds you receive for loss of business due to a casualty or a similar event.

• This is the same definition of Gross Revenue on which you will be required to pay royalties and marketing fees.

• In the table below, TCBY also reports the results by quartile. Each quartile represents 25% of the 105 Stores that form the data set.

• For each group, the reported average Gross Revenue is for the full fiscal year.

• Because the data set is comprised entirely of franchised Stores, the data is what those franchisees reported to TCBY or what the franchisees entered into the Store’s point-of-sale system and, consequently, reported to TCBY.

• For purposes of this Item 19, TCBY assumed the data they reported is accurate. It did not audit or otherwise verify the data reported to it.

• In the results below, TCBY also reports, for each group, the range and the median. The range reflects the low and high data point for each group. The median is the data point that is the center of all data points used for the group, except that, in a given group of Stores where there is an even number of Stores, the median is derived by adding the two numbers in the middle of the data set for the given group of Stores, then dividing that number by two.

• To show the impact of the COVID-19 pandemic, TCBY has provided a historic presentation of Gross Revenue generated by the 105 franchised Stores in the data set described above during three time periods.

• Part 1 provides the Stores’ results for TCBY’s last fiscal year, which ran for a 52-week period from June 30, 2019 to June 27, 2020.

• Part 2 provides the Stores’ results for the 38-week period from June 30, 2019 to March 21, 2020, to show the results of these Stores during the pre-pandemic time period.

• Part 3 provides the Stores’ results for the 14-week period from March 22, 2020 to June 27, 2020, to show the results of these Stores during the post-pandemic time period, when many Stores were shut down and/or operating under a reduced capacity.

Part 1 – Gross Revenue for the Entire Fiscal Year

Highest Quartile