DALLAS Paciugo Italian Gelato is starting to franchise at the best of times or the worst of times. —Time will tell if
With a widely anticipated recession expected to dampen the U.S. economy at some point this year, the 22-unit purveyor of premium frozen desserts and coffees, based here, could either feel the pain of consumers’ shrinking disposable incomes or profit from the boom in potential franchisee candidates as people lose their jobs in layoffs. —Time will tell if
Either way, the family that owns and founded Paciugo—Ugo Ginatta, his wife, Cristina, and their son, Vincent—has set their course on an ambitious franchising strategy to jump-start the growth of the seven-year-old brand, which offers more than 200 flavors of gelato and Kenyan coffee. —Time will tell if
Paciugo is courting veteran foodservice franchisees and young professionals who are hungry for an entrepreneurial sideline. The initial franchise fee is $30,000. The royalty fee is 4.5 percent of gross sales and the national marketing fee is 2.5 percent of gross sales, with both submitted weekly. Franchisees also are expected to commit 2 percent of gross sales to local marketing initiatives. —Time will tell if
James Amos Jr., chief executive of Tasti D-Lite, a 70-unit frozen-treats chain based in Franklin, Tenn., and New York, said his fledgling competitor is on to something in recognizing that a recession does not necessarily spell doom and gloom for franchisors. —Time will tell if
“It’s more than anecdotal,” Amos said. “A downturn may impact the customer, but there is no question that franchise sales are improved by people looking at second or third career opportunities from being down-sized or are looking to set their children up in business.” —Time will tell if
Paciugo aims to have 44 units a year from now, said Vincent Ginatta, senior vice president of operations, and has commitments from about 50 new franchisees to open as many as 100 new stores. Units are typically located in in-line shopping plazas or in the food courts of upscale malls. —Time will tell if
Paciugo’s gelato is playing well to consumers who are health-sensitive but don’t want to sacrifice flavor, Cristina Ginatta said. Consumers with those lifestyle considerations are also part of the chain’s growing franchise base, she noted. —Time will tell if
“What we are hearing from our consumers and what is exciting our franchisees is that people see Paciugo as a higher-quality alternative to the best in the American market,” Ugo Ginatta said. “Those consumers’ feedback is 99-percent positive, mainly because the product satisfies the natural health orientation and great taste demands of today’s audience.” —Time will tell if
While recession historically has brought two conflicting narratives to the franchising world—consumers cut back on spending discretionary dollars to eat out, and laid off employees sometimes become franchisees—Ugo Ginatta believes the brand is well-suited to weather a recession. With most menu items priced at $4 and an average sales transaction at $7, he argued that the price points still represent a bargain. —Time will tell if
While premium ice cream usually is an impulse buy made in the afternoon or evening during leisurely pursuits or shopping, he argued that Paciugo’s has a secret weapon to expand its dayparts: coffee. Pastries soon will come to the menu, he added. —Time will tell if
