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Frozen Yogurt Biz thread

by skewzme
5 replies
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My first post here. Came across a thread by a fellow in Northern VA who was considering a frozen yogurt biz and wanted to chime in but the thread was closed.
I was considering one myself down in the Richmond area. Sweet Frogs is doing crazy business here. I spoke to someone in the organization who claims his store did $97k his first month with no advertising, and he was in a smaller market.
I contacted a local restaurant equipment company a few months back to check on the cost of machines. The guy there said everyone was trying to buy them, suggesting there would be A LOT of copy-cat Sweet Frogs opening in the area. So far I know of two. Also contacted a food distributor for yogurt supplies. Surprisingly they didn't offer much at all. Sweet Frogs has exceptionally good tasting yogurt, and I dont' know if they have proprietary receipies or if they use a supplier that anyone can buy from.
The cost to open a SF is around $200k, including machines and store build out. I suspect that is about what it would cost to do your own store as well. The machines alone are pretty expensive. Used one's start at about $8 grand each or more. You can also lease them.
In any case, would like to hear from the previous thread starter and hear how it's progressing for him Maybe we could help each other out by sharing info. I'm still considering it, but I have some concerns that too many people are getting in now and the market may be saturated with self serve shops soon.

Thanks
#biz #frozen #thread #yogurt
  • Profile picture of the author goyongj
    I have a froyo store. I was the only one in my area. 3 other stores opened up within 6 months lol.....
    I am against it though unless you are sure you will be the only one in your area for several years
    $97k in one month? was there line all the way to the parking lot from open to close?
    to sell just $1000 a day, you need to get customers constantly and the store should be packed around 7~9pm. that's only $30,000 (still successful since you can keep about $10,000)
    you might think 'oh well I am fine if I end up selling just half of that' LOL

    I can just go on and on about customers behavior these days but I will save it for later.
    btw the average sale is like $2.5~3 at my store. they buy as low as $1.2 for their kids.
    I am 100% sure you figured average sale would be like $5. NO
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    • Profile picture of the author skewzme
      Originally Posted by goyongj View Post

      I have a froyo store. I was the only one in my area. 3 other stores opened up within 6 months lol.....
      I am against it though unless you are sure you will be the only one in your area for several years
      $97k in one month? was there line all the way to the parking lot from open to close?
      to sell just $1000 a day, you need to get customers constantly and the store should be packed around 7~9pm. that's only $30,000 (still successful since you can keep about $10,000)
      you might think 'oh well I am fine if I end up selling just half of that' LOL

      I can just go on and on about customers behavior these days but I will save it for later.
      btw the average sale is like $2.5~3 at my store. they buy as low as $1.2 for their kids.
      I am 100% sure you figured average sale would be like $5. NO
      Thanks for the input. The $97k number was given to me by a franchise owner. Maybe it was inflated, I don't know. I can tell you however that every single Sweet Frogs I"ve been to here in VA has waiting lines all the time. I've been to them on several occassions and just left because I didn't want to wait so long.
      May I ask what state and city your store is located? Also, does Froyo operate with self serve machines and toppings bar? My daughter seems to think a Pinkberry would be good, but they aren't self serve and I think that's one the reasons SF's is so successful. Also, what are your thoughts on a franchise vs non-franchise? I was considering hiring an art student from the local college to create a store concept and brand image and going it on my own.
      Thanks again
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      • Profile picture of the author goyongj
        The thing with froyo business is that anyone can get into it as long as you have some $$$. I am pretty sure there are people like you who goes to those busy yogurt places and say 'well they are making good money, I should start something like this' you never know when the 'war' will begin.

        there is no secret recipe for froyo business.
        you either get your yogurt mix from yocream, rainbows end, honey hill, miss karens. usually it's yocream or rainbows end. they all have corn syrup in it though. (don't tell your customers)
        all you have to do is pouring it into the machine.

        when I talked to pinkberry couple years ago. they wanted $250k each store and required me open 2 more stores in couple years. Only $750k lol

        If you are the type of the person who has just enough money and don't want to really manage the business, then franchise is the good way.

        If you are a poor guy like me in 20's, then you should do it on your own.

        If you buy everything new and hire professional contractors, it will cost $100k for machines and $100k for interior

        If you look for cheap used machines (looks the same, makes the same yogurt, just older machines), and do a lot of buildout on your own
        you can open one with $60k.

        I don't want to discourage you but I really feel like running a low class store.
        I mean, because I sell yogurt at a such cheap rate and people's behavior.
        These days froyo is considered as cheap chinese food (more for a buck)
        I went to this gelato store and spent $4 for really small size.
        it would cost $2~2.5 at my store for the same weight.
        The cost of gelato is the same as yogurt from the supplier.
        If customers buy $6 yogurt, then I will make the same profit and it's win-win.
        the problem is they will end up spending $2~2.5.
        (you go out on lunch. subway foot long is $2.5. would you grab two just because it's 50% off??)

        Plus a lot of topping prices are close to what I charge. so I will make nothing on toppings. (I used to cut the whole box of Reeses. I make $4 for selling one box of Reeses as a topping which will take about a week to sell)

        So in the end, the gelato guy will make $3 out of $4 sale, I will make $1.25 out of $2.5 sale.

        Im in the area where the average income is $60k. in the same neighborhood, I see people spending close to $10 at coffee shops (cup of latte and cake)
        but they will come to my yogurt shop, try several flavors carefully like they are about to purchase $100s bottle of wine and end up spending $2. I will make maybe 50 cents for that sale.

        Since your Profit Margin and Sale Amount is lower than other dessert places (baskin robbins, cold stone etc) you will have to drive 2~3 times more traffic to your store. Are you confident enough to do that?
        (think of busy ROSS store Vs slow Banana Republic)

        If I were you, I would just look into the location inside the mall.
        you are free from the competition. you don't have to send out coupons. People are willing to spend more $ at the mall.







        Originally Posted by skewzme View Post

        Thanks for the input. The $97k number was given to me by a franchise owner. Maybe it was inflated, I don't know. I can tell you however that every single Sweet Frogs I"ve been to here in VA has waiting lines all the time. I've been to them on several occassions and just left because I didn't want to wait so long.
        May I ask what state and city your store is located? Also, does Froyo operate with self serve machines and toppings bar? My daughter seems to think a Pinkberry would be good, but they aren't self serve and I think that's one the reasons SF's is so successful. Also, what are your thoughts on a franchise vs non-franchise? I was considering hiring an art student from the local college to create a store concept and brand image and going it on my own.
        Thanks again
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  • Profile picture of the author Victoria Gates
    I just miss Ice Cream but I am VERY lactose intolerant.. 1 in 4 Americans are in fact so I am not alone, and I cant eat yogurt either! So if you yummy treat guys and gals out there will note this down.. please offer non-dairy and lactose free options! Starbucks is one of the rare places I can go for a treat that does, they do the soy.
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    Victoria Gates - Digital Marketing Specialist
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  • Profile picture of the author dbarnum
    Hi,


    I'm not an owner, but will share a popular froyo place here, growing in popularity due in part to his Facebook marketing:

    Orange Leaf Yogurt - Columbus, OH | Facebook

    (no affil.)

    My neighbors turned my hubby and me on to it, telling how they'd won Winner of the Day on Facebook there (you "Like" the page and get entered into the daily drawing for free froyo.

    Since he told us, more neighbors have joined in and the info spreads all over. We've gone to eat there with 3 households all together, driving in a caravan (some of us more have gone a few times now) - and hey, I was chosen Winner of the Day already, too

    Great program they have, you build your own - mix flavors, toppings, etc.

    Then you pay by the weight. Our one neighbor always spends $7 on himself alone No way anyone spends $1.20, though, not even for the kids - it's always more. It's too yummy and there are too many goodies to choose from on the froyo bar
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