Is there room for another frozen dessert concept in the trendy fro-yo space?
When we were first approached by D’lites Ice Cream Shops about helping them develop their low-calorie, low carb, no artificial sweetener, soft serve ice cream business, we wondered, “Is there an opportunity for another ice cream shop in this already crowded space?”
We had heard that if an owner of any of these shops, wanted to make it – they should consider building it up and then start looking for a buyer before sales started to drop off. As the franchise sales team, that would be charged with helping D’lites grown -- we needed to understand why this brand was any different then the rest?
Is The Trendy Fast Growing Dessert Space Alive and Well?
You may have noticed that yogurt and frozen dessert concepts are popping up everywhere these days. What you might not know is that very few of the popular concepts from a few decades back survived. What we discovered was that D’lites was a pioneer in the ice cream business had been around for 30 years and had seen the popular concepts of the 80’s & 90’s come and go. But were still standing. Since they never franchised the concept – their growth was mostly word of mouth from converts who understood that this product was a healthy alternative to yogurt and ice cream. And that the owner was willing to provide these raving fans with the ability to open stores under a license agreement.
The two biggest differences between a licensed business opportunity and a franchise opportunity is lack of restrictions and ongoing fees. We are not saying that one is necessarily better then the other – it really depends on what you are looking for. D’lites clearly provides a unique product and coupled with the fact that they are a licensed business opportunity -- the prospects are good if folks want to own a unique model with no ties to franchise restrictions.
No Royalty Payments
The owners we talked with seemed very happy with the flexibility that the licensing program provided and seemed to really like the fact that they were not paying any royalties, association marketing or advertising fees.
The volume of business is slightly lower – but the so are the costs of entry and day-to-day operations.
Interviewing customers as they rotated through the South Tampa location recently, we heard the same comments over and over again-–low fat, minimum carbs, cholesterol free. It appears that the taste and texture, coupled with D’lites healthy edge, sets D’lites Ice Cream apart from other frozen dessert companies or products.
With twenty-eight locations, over 30 years of experience and a product that is so unlike the others in the industry, our gut told us that this concept could be a real winner. In a health conscious society, who wouldn’t want to indulge on an almost “guilt free” ice cream product?
So, I guess we are all in! For further information on the D’lites business opportunity, contact James Emerson at james@thefranchisesalessolution.com -- they may be on to something!
How Are Regulations Hindering Franchisor Growth?
A number of the brands that we represent are clients of Harold Kestenbaum. If you have been in the industry for any period of time you know that Harold is one of giants of franchise law and has helped countless franchisors in his 35 years in the franchise industry.
We recently asked Harold to share his thoughts about the challenges that franchise systems are faced with in today's economy. His thoughts are right on the money -- and the franchise industry needs to determine if anything can be done to alleviate some of the regulations.
Harold Kestenbaum: Impeding Franchise Growth
Over the course of practicing franchise law for 35 years, the majority of my clients have faced the same challenges when it comes to selling their franchises in franchise registration states--and believe me, it is a challenge. While the states are charged with protecting the consumers, i.e., the franchisees, they need to be cognizant of the fact that we are only now putting the recession behind us.
The state examiners have failed to realize during these hard economic times that unless franchisors are able to sell franchises in their states, those states will find themselves behind the economic eight ball. Franchises create jobs, bring in revenues and generally stimulate a state's economy. State examiners cannot be a roadblock to these overwhelming economic advantages. But, alas, they are. There are state examiners who take months to approve a franchise registration, thus hurting the economy of their particular state.
This is an absurd result from what should be a simple process. States like Indiana, Michigan and Wisconsin, which once had very onerous franchise registration laws and review processes, came to the realization that a simple filing of the FDD would be sufficient to protect their consumers. So these state no longer review the FDD, they simply approve it. If all of the registration states went to this process, more sales could and would be made and the state economies would prosper, instead of suffering.
I truly believe that the state agencies in charge of franchise registrations need to take heed that what they are doing is crippling their respective states economy. Until this happens, franchisors will continue to feel the frustration of trying to register in many of these states and therefore impede the growth of the overall economy.
Does regulation have an impact on your franchise sales?