Orange Leaf Frozen Yogurt
Issue Spring 11
Orange Leaf Frozen Yogurt makes sure its operations are just like its product: smooth. Two San Francisco partners conceived the self-serve yogurt model in 2008 and introduced it to the Bay Area. It was the beginning stages of the help-yourself yogurt concept, which Orange Leaf helped pioneer. The company’s bold idea has sparked several copycats around the country. However, as with most things, nothing beats the original.
Reese Travis knows that. After opening an Orange Leaf Store in the cities of Norman and Lawton, Okla., and Wichita Falls, Texas, in early 2009, he immediately recognized the promise of not just his store but of the company in general. “Through the process of franchising and getting to know the business owners and the yogurt industry, at the end of the day, we really liked what we were doing,” Travis says. “So, as we started building out our infrastructure we took a step back and approached the founders about buying the corporation from them.”
That was more than 18 months ago. Now, Reese is CEO and part owner – along with a group of private investors – of one of the fastest spreading chains in the country. With headquarters in Oklahoma, he oversaw the opening of 50 stores in 2010 with the help of his franchising director, Matt Wills.
“We have a full corporate staff, and we know how to open stores and know what it’s like to go through the franchise process,” Wills says. “We make sure all their questions are answered before moving forward to the next step.”
From application to grand opening, the average Orange Leaf franchise process takes about five months. Its model of low overhead and high quality attracts all types of entrepreneurs. “We didn’t want to create a barrier,” Travis says. “If people have an entrepreneurial spirit and identify the benefits of this business, we want them to be able to execute and have a successful store.”
Perhaps the biggest barrier for franchisee hopefuls is initial cost. While many companies assert a fee for submitting applications, Orange Leaf invites all applications sans fees. Wills conducts a thorough interview to vet the potential’s compatibility with the Orange Leaf family-friendly brand. If selected, the franchisee is assisted with site selection, construction and design, product supplies, training, and marketing from opening day through daily operation. Orange Leaf’s program also is a fraction of the cost of many Orange Leaf competitors.
“We don’t have hard-set liquidity or net worth requirements,” Wills says. “We’re willing to work with people of all backgrounds whether its single or multi-unit operators.”
The system is working. It owns 12 corporate stores – six that are open and six soon to be opened. The other 54 stores are all franchised through people who found Orange Leaf themselves. Wills says the company’s growth has been organic thus far. Franchisees will approach the company after experiencing steady growth and choose to open more stores, just like Travis did.
“We’ve had groups that commit to up to 20 stores,” Wills says. “And, we’ve seen franchisees who have success with the first location and come back shortly after opening wanting to do a multi-unit deal.”
The franchise friendly model has made Orange Leaf a quick success, but Travis and Wills say the goal is to build a lasting brand, not just capitalize on a trend. One way Orange Leaf accomplishes that is to integrate each store with its locale.
Orange Leaf maintains brand identity from coast to coast with slight variations to mesh with each community. For instance, while each store’s interior is a crisp white with pops of orange, Travis encourages store owners to incorporate murals of community landmarks or local high school mascots.
Along with various locations come a variety of taste preferences. “Stores serve flavors that are most popular in their respective markets,” Wills says. “The benefit of extending this freedom to our franchisees is that they can ensure that > > the unique tastes of the community are being addressed.”
From New York to its birthplace in California, the company is painting American towns orange- even Hawaii. Its biggest operations are in Oklahoma and nearby states of Kansas, Texas and Missouri. Currently, the company is planning a major expansion in Ohio.
“We are expanding aggressively in the Cincinnati market because we determined a strong demand for our product,” Wills says. “By building out quickly, we hope to capture the market place and establish Orange Leaf as the dominant brand.”
Two of the Ohio stores are corporate affiliates, but the other five will be franchises. For states without an Orange Leaf, the company says to check back soon as it plans to open at least 300 new stores by 2013.
“Our original goal was to have 300 stores at the end of the first quarter of 2013,” Travis says. “Now, we’re reevaluating because at this rate of growth, we’re sure we will hit that number.” The company’s short-term goal is to double its 2010 growth in 2011 and open 100 stores, whether that’s in the United States or internationally.
The company has had talks with potential franchisees in the Middle East and India and will most likely begin its international presence in either region. However, the company’s priority is to get it right, so it is in no hurry.
“Going international is a big deal,” according to Travis. “We are working to make sure we have the correct model to bring growth to different countries and continents that we have here in North America.”
From a customer standpoint, the model allows people to be picky, yet it remains hassle-free. Patrons choose either a 16- or 24-ounce cup and fill it with as much yogurt of as many types as they please. They choose among 16 different flavors that range from favorites like pumpkin spice, eggnog, tart raspberry, honeydew or white chocolate.
After choosing a flavor, customers can leave it bare or load it up with candy, nuts, cookies, fruit, cereal or syrups for every taste bud. Just like the yogurt, they can have as many toppings as they want.
“The customer is always happy if they make their desserts exactly the way they want it,” Travis says. “There is no limit to how many Oreos can go into your yogurt or what type of flavor mixture you can create. We enjoy the consumer always being happy with the product and to have total control over their frozen yogurt, whether they are coming in for a healthy treat or just a quality product.”
Up next is the “weigh–and-pay system.” Customers place their cup on a small scale and pay 45 cents per ounce, which means that same 6-ounce chocolate yogurt is only $2.70, an ideal price for budgeting families.
The self-serve model means lower overhead costs on supplies and employees. Those savings are put back into ensuring customer satisfaction. Orange Leaf privately manufactures its yogurt and employs product inspection for all toppings. Travis says Orange Leaf will not introduce a product that doesn’t mesh with its brand.
“We are good at what we do and we don’t want to devalue our brand,” Travis explains. “We’ve seen other mom and pop stores that have brought in products like smoothies and have failed. When we do bring in other items it will have to fit the model of a self-serve, easy to manage concept because that’s where we are leading.”