After spending years working for international companies like Time and Nestle, Sharon Arthofer decided she was ready to go off on her own. She opened a few retail stores in the New York market and “loved running those” for about 13 years. But when her husband’s job took them to California, Arthofer wanted to do something new.
“When we moved out to California, I thought I wasn’t going to do retail anymore. That idea changed within a year of being here,” she said during a recent interview.
The catalyst behind her decision was a phone call from Rick Wetzel and Bill Phelps, two fellow Nestle veterans who wanted Arthofer’s help in getting their then-new concept, Wetzel’s Pretzels, off the ground.
“I said no. I wanted to reinvent myself. But then within six months of that conversation, I was helping them open their second store. I became their first franchisee. I didn’t expect that to happen,” Arthofer said.
Arthofer’s return to retail made her realize running these types of businesses is her passion. So, she poured herself into Wetzel’s Pretzels, opening multiple units across Southern California throughout the past 29 years. She has since sold all but one. In the meantime, she began to see a huge shift in the beverage industry and another catalyst presented itself.
“My husband and I were waiting for our table at a restaurant one night and we were watching mixologists just spending so much time on each cocktail. All of us in that restaurant were mesmerized,” she said. “It was a big deal, but we really didn’t have anything in the beverage industry outside of boba, coffee and lemonade – nothing that brought together a fresh fruit concept in a bigger way.”
After that dinner, she found two mixologists, gave them some ideas and came up with small batch recipes. From there, she brought in a chef to create recipes on a larger scale, then a firm to help design a concept and Sip Fresh was born. Sip Fresh features fresh fruit-based juices and beverages handcrafted several times throughout the day in small batches. The menu features creations such as a mixed berry lemonade sip, a mango tango, passion fruit and peach tea, smoothies, horchata and fruit bowls. There are currently four locations open and 10 deals signed.
Sip Fresh is mostly focused on shopping mall locations. Arthofer said the concept is a good fit for such locations because it provides captured foot traffic and encourages brand awareness. Granted, malls were hit disproportionately hard at the onset of Covid, but traffic data from Placer.ai shows they’ve recovered resiliently and Arthofer is bullish accordingly.
“One thing I love about malls is they’re alive and well. They’re reinventing as we speak and are more experiential and entertainment focused. They’re more user friendly and we fit into that,” she said. “We shut down for a year and then opened up again in 2021 and did well in both of our locations and said, “OK, we have the proof of concept. Let’s go.’ You’ve got to dust off your boots and keep going.”
The target is to sell 35 agreements this year in western markets like California, Colorado, Utah, Arizona and Nevada.
“We’re also looking at Texas and eventually moving toward the east. I think it will blow up on the East Coast,” Arthofer said. “We’re really excited about launching this brand regionally and eventually nationally.”
In addition to malls, Sip Fresh will target alternative venues like universities, transportation hubs and entertainment centers. Arthofer adds that the unit economics of the concept support such ambitious growth plans. The cost of entry is between $212,000 and $366,000, according to its franchise disclosure document. There are no fryers or ovens. The labor model is simple – one person is making the juice and everyone else is “selling.”
“Our food cost is manageable even though we use fresh fruit and we have such simplicity in our operations. It isn’t complicated,” she said. “I would say our return is solid and better than most in the industry. If nothing else, my 28 years as a franchisee taught me the importance of achieving a strong ROI.”
She also feels confident in her ability to identify a unique concept and is ready to put Sip Fresh to the test in the growing beverage category. The non-alcoholic beverage category, for instance, is expected to grow by over 6% through 2028, according to research from The Insight Partners. Arthofer said her concept’s differentiators come from its visual appeal – both the store design and the product – and the overall experience.
“We call our team Supistas and train them to guide you through the entire process. You can sample all of our flavors, or they might suggest a mix and match. They engage in conversations about the product,” she said. “We have a big bar and big, beautiful glass barrels where you can see the fresh fruit. We are finding that our consumers are loving the engagement and experience. My biggest thing – my ‘a-ha moment’ – was realizing there is nothing out there like this right now.”
Contact Alicia Kelso at [email protected]
