Peachwave store operators don't pay royalties of any kind. That's not how the Peachwave business model works.
Edmond, OK (PRWEB) July 23, 2011
Peachwave Frozen Yogurt is more than a healthy dessert. It’s a healthy challenge to the traditional froyo franchise model.
The up and coming trend of self-serve frozen yogurt is spreading quickly in the United States. Peachwave has grown to over 30 stores in 11 states in less than 2 years. Remarkably, they have experienced this growth without advertising.
The Peachwave business model is one reason they have been able to succeed.
According to the traditional froyo business model, a franchisor typically turns a profit by charging royalties to franchisees. The fees range from 4-8% and are taken off the top – out of gross sales. Additionally, franchisors charge a fee for marketing costs – whether measurable results for that particular location are present or not.
“4-8% might seem like a good deal at first. But when you calculate the ratio of that against your profits rather than gross sales, you see that it really becomes more like 15-30% of your bottom line,” notes Kevin Moon, owner of Sky-J Enterprises LTD. (Peachwave holding company).
Peachwave store operators don’t pay royalties of any kind. That’s not how the Peachwave business model works.
Tucked away in an industrial warehouse in the middle of an affluent, upper-middle class community in Oklahoma, you will find the Peachwave corporate office. If you’re there early enough you might even catch a glimpse of Kevin and his staff riding around on forklifts and loading trucks with pallets of frozen yogurt mix.
Corporate Peachwave earns revenue not by collecting fees and royalties but instead by acting as a distributor for their store operators.
Unlike many competitors, Peachwave developed its own proprietary recipe for yogurt. This exclusive product and other materials are sold to operators at a small markup. Nonetheless, the cost of ingredients and materials are kept competitively lower than market prices because they are purchased directly from the producer.
Moon designed his business this way to make owning a froyo establishment as profitable as possible for the store operators as well as to differentiate his brand from other competitors. He believes his licensing model gives store operators the highest opportunity for success in this economy. Operators share the same benefits of being franchised – brand awareness, etc. – but avoid the high costs associated with franchise fees and ongoing royalties.
“It’s a business model that resonates with people,” comments Moon. “To know that at the end of the month, it’s sales minus costs. And that’s it.”
Kevin Moon served as a corporate executive in several IT companies. He spent the last five years of his IT career employed as country manager for McAfee in Korea.
Note: “Self-serve” frozen yogurt means that from entry to exit, the customer is involved creating their own frozen dessert. At Peachwave, customers select and dispense their frozen yogurt (14-16 flavors available at any given time). They can add their own toppings (over 40 selections at most stores) in any combination. Then they weigh their creation at the register and pay.
For nutritional information or more info on how to open a Peachwave location or for a listing of stores, visit http://www.peachwaveyogurt.com or call (405)601-8201. Email info(at)peachwaveyogurt(dot)com to communicate directly with the Peachwave corporate office.