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Yogurt City is a restaurant chain that sells frozen yogurt treats. They operate primarily in New England but have expanded into Ohio and Michigan, as well as down the Atlantic Coast to Virginia and the Carolinas. Yogurt City is a franchised company, so if you think they would make a good investment, and you have the capital, you might be able to open a franchise of your own.
Visit several existing Yogurt City locations. Speak with the owners to get a feel for the vibrancy of the Yogurt City brand and the viability of the model. Try the products out for yourself and compare them to the competition. Yogurt City offers franchisees full management authority and a generous, penalty-free exit clause if you prefer to go independent later.
Choose a city for your potential franchise and identify one or more specific candidate locations. Yogurt City prefers that you commit to a minimum of two locations if you enter into a franchise relationship with them. Explore the local retail market and do your due diligence to establish to your satisfaction that there is enough demand to support a frozen yogurt shop at the candidate locations. Investigate the local real estate market to get an idea of costs, and look into the local licensing and insurance requirements -- these vary considerably by state and even by county.
Speak with Yogurt City's corporate offices. You can phone them at 845-532-4681, or email them at firstname.lastname@example.org. Discuss with them your interest in opening a Yogurt City franchise and get a feeling for their enthusiasm about your proposal. Fill out their initial franchisee inquiry form, where you will have to provide details about your financial status, any experience you have with franchising, and the locations where you want to build.
Secure startup financing of at least $200,000 per location. Yogurt City sets the initial franchise fee at $12,000, with an application fee of $200, and it estimates that on average it will cost you at least $190,000 to prepare and remodel your store. If you cannot pay for this out of pocket, your two major options are a bank loan and a loan from the U.S. Small Business Administration. In either case, you will have to demonstrate a viable business plan to be approved for a loan. Yogurt City strongly recommends that you have a net worth of at least $400,000 per location.
Decide whether to go ahead with the project, if Yogurt City agrees to offer you a franchise license. Yogurt City will work with you in providing information about the start-up process.
Speak with the IRS and the city and county governments to register your business, acquire the necessary health and safety permits and complete any mandatory training. The Small Business Administration can help you with this step.
Lease a commercial real estate retail property and begin renovations to bring the store in line with the Yogurt City style. In addition to the standard restaurant-retail kitchen, dining and frontage equipment you will need, like sinks, tables and chairs, lighting and refrigeration, you will also need special equipment specific to frozen yogurt -- particularly yogurt machines. TurnKeyParlor, a business advice website for frozen novelty entrepreneurs, recommends medium-capacity machines capable of dispensing about four 4-ounce servings per minute. You will need one of these machines for each variety of yogurt you plan to offer. Yogurt City specializes in a wide variety of flavors, using a bank configuration of yogurt dispensers positioned side-by-side, so you will need to invest in quite a few of these machines.
Set up logistics contracts to deliver product and supplies to the shop. For the goods specific to a frozen yogurt operation, Yogurt City sells these products to franchisees at a steep discount, near wholesale rates.
Hire and train staff to run your store. Your franchising fee will help provide training, and, depending on applicable laws, your employees may need to acquire food-handler permits. You should plan on two or three employees per shift, with two shifts per day, or roughly between six and ten employees total, for a twelve-hour day. Plan on filling the manager role yourself for the first few weeks or months of operation so that you can closely shape the development of employee practices, though you should eventually hire a store manager.
Plan on a monthly labor cost of about $10,000, not including the manager or yourself. While wages vary by location, this assumes 25 hours of employee labor per day, at $10 per hour -- which is more like $14 to you after taking employee taxes into consideration.
Plan on monthly fixed operating costs in the neighborhood of about $5,500. Commercial real-estate rates will vary depending on your location. If you have an average-sized Yogurt City store -- roughly 1500 square feet -- at the average annual 2012 commercial real estate rental rate of $19 per square foot, that comes out to about $2,400 monthly in rent. Figure another $1,500 for utilities -- refrigeration on your product will contribute to a heavy electrical bill. Other expenses such as taxes, insurance, facility repair costs, industry association memberships and publication subscriptions will vary considerably depending on your location, preferences and specific store profile, but you can use $1,500 as a ballpark estimate. Yogurt City will be able to give you more specific information based on your particular vision for the store.
Increase your odds of making a successful investment by engaging with the community to build brand awareness, advertising locally and leveraging social media. Yogurt City stores have a presence on Facebook, and many are on Google Plus, too, but keeping these profiles active and engaging is essential to converting interest into sales.
- SBA: Opening and Running a Restaurant -- A Legal and Regulatory Checklist
- Yogurt City: Waving to the States
- Yogurt City: Contact Us
- Yogurt City: Locations
- TurnKeyParlor: Opening a Frozen Yogurt Store -- The Financials -- The Typical Overhead Expenses
- Yogurt City: Franchise
- SBA: Standard 7(a) Evaluation Criteria
- TurnKeyParlor: Key Equipment Needed When Opening a Frozen Yogurt Store
Josh Fredman is a freelance pen-for-hire and Web developer living in Seattle. He attended the University of Washington, studying engineering, and worked in logistics, health care and newspapers before deciding to go to work for himself.