The story of Encino, Calif.-based Menchie’s Frozen Yogurt’s ascent into the Second 100 universe of restaurant brands is one of rapid franchise growth. The brand followed up a 32.7-percent increase in U.S. systemwide sales in the Preceding Year with 18.6-percent growth in its Latest Year, based on the strength of its franchisees opening 142 locations the past two fiscal years. The brand’s double-digit declines in estimated sales per unit, or ESPU, do show a slight dilutive effect to average unit volumes as a result of such rapid growth, but those figures could slightly inflate the fact that many of Menchie’s newest locations are much smaller footprint stores or have been open for only a short period in the brand’s Latest fiscal year.
2014 Second 100 top 10 growth chains at a glance >>
Keys to growth:
Leveraging a consolidating category. Chief executive Amit Kleinberger said the frozen-yogurt segment in the United States is no longer emerging after six to seven years of rapid growth. “Now the category is going through a consolidation, and that’s a good thing,” he said. “There used to be many more franchise systems, and now it’s coming down to us being the largest self-serve yogurt brand in the world, with only a few others leading the category.” Menchie’s will look to accelerate unit growth even more via acquisition and conversion.
Menu simplification. Kleinberger, believing that brands end up being nobody to anybody by trying to be everything to everyone, tells Menchie’s franchisees and staff not to focus on selling a product, but on selling an experience. Menu innovation will continue to happen around frozen-yogurt flavors or toppings, but the menu would remain primarily just frozen yogurt to ensure operational simplicity. “I’m not ever going to add a popcorn machine or sandwiches,” he said.
A “smiley” corporate culture. Because Menchie’s franchisees and front-line employees need the temperament to drive traffic and sales through hospitality, the brand’s No. 1 priority for its growth is maintaining its corporate culture, Kleinberger said. Front-line staff members are continually trained to provide Menchie’s guest experience, including giving each guest the brand’s famous greeting, thanking them after every transaction and encouraging them to sample as many flavors of yogurt as they would like.
