Franchises play a large role in the restaurant industry by providing growth for the industry as well as franchisors. Before opening a franchise, a franchisee considers many factors such as concept, financing, profits, expenses, and site selection. Each of these factors plays a significant role in running a successful business. Chief Chats, a media channel focusing on challenges and opportunities facing C-Suite executives, met with pharmacist and entrepreneur, Sam Sheth, a Multi-Unit Franchisee of Forever Yogurt, for a discussion on all things franchising and advice on site selection.
Chief Chats: Where are you from and what is your full-time job?
Sam Sheth: I am from Gujarat, India. I came here, to the United States, in 1995. I work for CVS as a pharmacy manager. I’m a pharmacist.
Chief Chats: Why did you pick Forever Yogurt?
Sam Sheth: Samar Sheth, my cousin, and I were looking for something on the side to add to our income. We wanted to find a business or businesses that could be run with a minimal amount of personnel. We researched and came across Forever Yogurt.
Chief Chats: What is the chronology of your store openings?
Sam Sheth: We opened the Logan Square location, in Chicago, in September of 2013. The La Grange location opened in February of 2014 and the Glenview location opened in April of 2014.
Chief Chats: Who are your partners in the Forever Yogurt stores?
Sam Sheth: My cousin, Samar Sheth, and I are partners in the Logan Square and La Grange stores. We are partners with Montu Shah in the Glenview store.
Chief Chats: What other franchise concepts did you look into?
Sam Sheth: Well, we wanted to go into the restaurant industry. At the time, we also looked at make-your-pizza franchises such as Pie Five and Blaze, where you choose your toppings. These were new brands at the time. When we started looking at Forever Yogurt in 2012, the industry was picking up pretty quickly. We met with the franchisor and then decided that Forever Yogurt was for us.
Chief Chats: How many employees are required in each Forever Yogurt?
Sam Sheth: Each store employs six to nine part-time employees and one manager. Most of the time, one person works the morning shift. During summers, it’s always two people per shift, and during winters, one employee works in the morning and another in the evening.
Chief Chats: How did you finance your growth?
Sam Sheth: We applied for an SBA loan. It did take time, about 4 to 6 months. Our credit history was okay so we had to come up with 20% of the loan. We did that for all three stores.
Chief Chats: What were the terms?
Sam Sheth: That depends on which bank you choose. Find a plan that is right for you. We were able to find an SBA loan with minimal interest.
Chief Chats: Is rent in-line with your units’ economic models?
Sam Sheth: Our rent is in-line for the marketplace. I would say, though, that if someone were to open a new store, I suggest looking for a space that is less than $3,000 a month. If you pay more than that, you are paying too much. This will become a fixed expense and you will need to bring added business in.
Chief Chats: How did you pick the sites for your stores?
Sam Sheth: I needed to pick places with plenty of foot traffic, particularly during the evening. I believe that with yogurt shops you do 70 percent of your business between 7 p.m. and 10 p.m. I wanted to choose a location that had high foot traffic and a large demographic of moms and kids. As far as yogurt shops go, the target demographic consists of mothers, children and teens. It’s mostly females who come into the stores. La Grange, for instance, has a large surrounding population of mothers and children and a high rate of walk-in traffic.
I have a competing frozen yogurt store, Red Mango, next to the La Grange store. However, Red Mango only has five machines (10 flavors) and a few places to sit. That store was always crowded, so I knew there was a need for another frozen yogurt store. People didn’t have a choice and there were long waits.
When I opened the Forever Yogurt in La Grange, customers appreciated the bigger space and variety of flavors. My store has 10 machines and 1,700 square-feet, in comparison to Red Mango’s 500 to 600 square-foot store.
The franchisor wanted to open a store in Logan Square, but they could not find someone to open it. That location is great because it is surrounded by two big chains, Chipotle and Potbelly. We get a lot of good foot traffic, day and night.
As for the Glenview location, everyone kept telling me that if you open in The Glen, a landmark, it would be great. Everyone would tell me, “It’s a great location.” We did our research, visited the area during the summer and saw that it was fully packed. It was the most foot traffic of any of my locations, but we were wrong in the end; the summer was the only time we would have that much foot traffic.
Our only regret with the Glenview location is that we didn’t fully research the project. Glenview is a suburban location; people don’t go out after 7 p.m., when school starts, and on weekdays because they work. With a family community, you don’t have that much foot traffic in the evenings.
I advise those interested in franchising to research the area, visit it during the busy season and during the off season. Learn about the residents in the area and their demographics such as age, gender, ethnicity, etc. Conduct a trade area audit of the rental space that you are considering; find out who your direct competitors will be, is it located in a high-traffic area, etc. If you really do your research, you will find a perfect site for your franchise and your business will be successful.
For more information, please visit http://foreveryogurtfranchise.com