Franchise Update Magazine Issue III, 2011 | Page 11

Finding the right distribution
partner

We now had high-quality, differentiated recipes in hand that we were proud
of. But as a start-up, we were just too
small to be able to have custom production runs with the limited quantity we
needed during our proof-of-concept
stage. We had to make a larger commitment to production runs, and we
needed to be able to store the product
and ensure we could use it before its
expiration. Enter our food distributor. We contracted with Sysco. They
agreed that, even though we couldn’t
turn our frozen products initially within
their required four-month period (well
within our shelf life), they were willing
to roll the dice and store and deliver our
product based on their high regard for
the concept, belief in our management
team, and our commitment to growth.
It’s amazing how far you can go with a
vision, a good team, and passion. 
Impulse vs. destination

It was time to choose the site of our first
location. We wanted a corporate-owned
site in Utah where we are headquartered
to continuously monitor service, customer wants and needs, and as a future
training and R&D center. Selection of
our first site was quite a wake-up call.
In order to thrive, and given the
impulse nature of our high-end superpremium products, we would need to
be located in an area where people live,
work, and do their daily shopping, as
well as where they go for entertainment
and casual dining. Our type of business is typically driven by evening and
weekend traffic, and further requires
the density of the everyday shopping
traffic or generic foot traffic to support
a viable EarthFruits café. Unfortunately,
many of these lessons were learned after we chose our first site. We got the
visibility and traffic part right, but we
learned a few very important lessons
after the fact.
Specifically, we would need: high foot
traffic; above-average demographics;
adequate amounts of pull-up parking;
ideal night-time activity generators
including grocery stores, higher-end
dining, theaters, performing arts centers, walking paths, etc.; and a tenant

mix that supports the same types of
customers who support our business
model (higher-end specialty retail). 
Our very first market and site was
lacking in many of these essentials. It
was going to take some world-class
marketing, social media, community
involvement, and PR to make up for
these specific deficits. Fortunately for
the franchisees who would follow in our
pioneering footsteps, we developed one
of the best community and site selection
workbooks in the business.
Outsourcing to free up capital

My initial start-up team consisted of a
director of operations, a marketer, a café
manager, a vice president of franchise
development, and a project manager.
Every other function needed to be accomplished initially through outsourcing. “There is a growing realization in
the business world that many—perhaps
most—jobs can be done cheaper, more
efficiently, or both by outside providers,”
says Michael Corbett, executive director
of the Outsourcing Research Council.
“Every dollar a company does not
have to spend on an internal function
unrelated to its core business is another
dollar it can devote to improving its
competitive position in the marketplace,” says Stephen McClellan, an
analyst with Merrill Lynch.
For illustrative purposes, an initial
professional site inspection firm and use
of an outsourced company specializing
in value engineering could have saved,
by our calculations, in excess of $100,000
as we might have been alerted that we
had inadequate power within the site
and ultimately had to bring in 220-amp
power from the street—which, combined
with the panel, added nearly $40,000 in
extra unbudgeted expense alone.
Outsourcing can free up capital to
be applied to a company’s mainstream
strategic activities, such as marketing,
new product development, and customer
service. It can also provide a means for
a small company to stay on the cutting
edge of new technology without the
kind of infrastructure commitment that
normally entails. To this end, we made
the decision to go with an outsourced
back-end office solution (FranConnect), which included a module on

construction management, in addition
to a framework for financial management, franchise information management, document library, and franchise
intranet system made readily available
through a network of other approved
IFA suppliers. Offering systems often
found only in more mature franchise
systems gives us a further degree of
credibility. 
We also made the choice to use an
outsourced provider for defining and
documenting our operating procedures,
compiling them into an operations
manual, and using this as the basis for
our initial training and development. 

Coming up next...

With 75 days from our soft opening, it
was time to put together our franchise
offering and the strategic marketing
plans to achieve our goal of becoming
the “Starbucks of the Frozen Yogurt
Industry.” Stay tuned to Franchise
Update magazine for our next update
on our human resources plan, and the
plan we have for hiring team members
who will be able to provide the highest level of customer satisfaction and
loyalty in t