Does the world really need another frozen yogurt concept? The team behind sweetFrog thinks so—and the meteoric growth numbers bear it out.
Launched just four years ago, the Richmond, Virginia-based company has since grown to more than 260 units, and is on course for 400 locations by the end of 2013. The company converted from a licensing to a franchising system in mid-2012, and has been growing full-bore ever since.
As a brand, sweetFrog has a number of unique things going for it, according to Victor DiPace, director of marketing and branding:
- A tight branding package that appeals to young families with kids—the name sweetFrog is even easy for them to pronounce—with bright, family-friendly locations and the mascots Scoop and Cookie. The colorful, goggle-eyed frogs are used throughout trade dress, appear at openings and other events and are the centerpiece of retail merchandising that ranges from plush toys and crayons to t-shirts and kids’ backpacks. “When it comes to branding,” says DiPace, “no one can touch us.”
- High-quality, soft-serve premium frozen yogurt in a customizable menu format. With a motto of “How do You sweetFrog?” there’s a rotating array of more than 50 different yogurt flavors and a fully stocked self-service toppings bar; customers fill their own cups and top the treat to their liking, then pay about 42 cents an ounce for their creation. “Walk in, grab a cup, fill it up, top it off, weigh it up,” says DiPace, in a battle cry a kid of any age can appreciate.
- A “good neighbor” policy of community involvement that is more than just talk. The F.R.O.G. in sweetFrog stands for Fully Rely on God, and this is reflected in all of the company’s policies and marketing programs. High-touch, inclusive local outreach marketing is central to the franchise model, and is founded on the principals of Christianity and bringing happiness and a positive attitude into the lives of every local community.
- State-of-the-art social media that includes a new interactive website and a powerful new app that was built from the ground up. All content is controlled by the company and includes a rewards-based game—unusual for any QSR, much less a yogurt chain—that drives sales through the app and in the store.
In many ways, the story of sweetFrog is the story of American reinvention. Korean-American founder Derek Cha had been a successful entrepreneur with a chain of 80 art and framing stores on the East Coast, when the housing crisis and the economy’s collapse caught up with him. Having lost his company and his personal fortune, Cha and his wife turned to God for the inspiration to find a new way to support their young family.
Working as a courier out of his own car to put food on the table, Cha had seen the success of West Coast frozen yogurt shops, and the void for such concepts in the east. He opened the first sweetFrog in Richmond in 2009 with the help of a generous landlord, and popularity—and franchising requests—quickly overtook the small company.
“We are still working on a lot of the details,” admits DiPace. “None of us expected this kind of growth, but demand has been overwhelming.” SweetFrog currently operates in 25 eastern states plus the Dominican Republic and the U.K., and is fielding new inquiries on a daily basis, from as far afield as China, Mexico and Brazil. As of June, there were 65 company-owned stores and 78 franchise holders.
According to COO Vance Spilman, a former Five Guys executive charged with building the company’s infrastructure for growth, franchisees pay $30,000 for the first location, royalties of 4 percent of sales and 1 percent of sales for marketing. The turnkey package includes not only operating systems, yogurt formulas, a purchasing program and the awareness of a national brand, but also the complete support of headquarters in all local marketing efforts. The stores themselves, which cost about $250,000 to $350,000 to open, are relatively simple to operate, and require only two employees to staff, but it’s the community involvement that characterizes the operators’ day-to-day lives.
“It’s not so much a dollar cost as an investment in time,” says Spilman, “and we encourage franchisees to undertake community marketing at a mom-and-pop level.” That means national and local charities as well as churches, schools, athletic organizations and any other groups that need to raise money. “That’s not only good for the community but it brings people into the stores as we help our customers succeed at whatever they are doing.”
Figures represent revised 2012 sales and unit information provided by sweetFrog.
|2012 Systemwide Sales||$78,500,000*|
|% Change in Sales||180.0%|
|2012 U.S. Units||180|
|% Change in Units||80.0%|
|2012 Average Unit Volume||$300,000*|
|% Change in AUV||-14.0%|
|Future 50 Year||2013|