Having words with Daniel J. Kim, chief executive president, Red Mango, Inc.Having words with Daniel J. Kim, chief executive president, Red Mango, Inc.

Paul Frumkin

Daniel J. Kim, a former investment banker with Donaldson Lufkin & Jenrette in Los Angeles, was 30 years old when friends in South Korea approached him about the possibility of exporting their healthful frozen-yogurt concept, Red Mango, to the United States. Kim accepted the challenge and proceeded to refashion the concept for the American marketplace, designing hip locations and using social-media marketing to reach Red Mango’s young core clientele. In 2007 he opened the first Red Mango location in Los Angeles. Today the chain has 51 company-owned and franchised locations in the United States and is a key driver in the sizzling fro-yo treat niche. Clearly on a roll, Kim is in the process of aggressively seeking out new franchisees and is so confident about his chain, he has offered to buy back any store if a franchisee is dissatisfied within the first six months of opening.

The fro-yo niche seems to be hot as a pistol. Why is that?

We’ve redefined a category with values that are important to consumers. We give people healthier choices and have created a retail experience that goes beyond the product. Inside the store there is a focus on style and comfort and design and music. It’s a social experience. You can come in and mingle with friends or simply be a voyeur if you want to be. It’s about watching people and being watched.

Some critics call it a fad. What’s your response?

FAST FACTS

EDUCATION: B.S., business management, University of California at BerkeleyAGE: 33HOMETOWN: Los AngelesHOBBIES: photography, musicPERSONAL: married with one daughter

Critics have been calling it a fad since the concept took off in 2005, and we’re still doing well in 2009. I don’t believe it’s a fad. It touches on things that are important to consumers in the short term and long term. We offer a great-tasting product that’s genuinely good for you. And it’s an engaging retail experience. I think fads fizzle because they haven’t been able to integrate the three elements I call the “brand trifecta”: health, taste and style.

What do you mean by “style?”

Red Mango style is expressed in several ways. The store design is contemporary. It has a comfortable and upscale lounge-like feel. It has good lighting, good music, good seating. It creates an experience that makes you want to come back.

Outside the store, it’s the way we communicate with consumers. Through our marketing material and through social media like Facebook, Twitter and MySpace. We invest time and energy into those platforms to speak to our customers.

You’ve already closed several stores in Southern California. What happened?

Those were five stores we opened early on, and they were just bad real estate decisions—before we had the experience and tools we have today. They were just in the wrong areas.

What about your buyback program?

We call it the “Real Deal.” We provide first-time franchisees with the opportunity to sell a store back to us for $275,000—basically, what it costs to build out a store—within the first six months. It reflects a sign of confidence in our franchise program.