Froots Boosts Franchises

HOLLYWOOD, FL-Jumping into and expanding on the smoothie and fruit-juice craze, Froots is planning for a major expansion across the US. With eight stores currently open, and 16 under contract development, the company plans to open a total of 300 stores in the next five years.

Chris Cavallo, president of Froots, tells GSR that the concept came from a longtime family friend and Froots vice president, David Lopez, who felt that the smoothie business was “going to explode.” Cavallo, who recently retired from a successful 20-year career in securities, provided the capital while Lopez handled the groundwork. The result was a business model to franchise the Froots name and menu, which offers an array of smoothies, salads and health food wraps.

Cavallo says Froots is able to easily compete against smoothie chains like Jamba Juice because the retailer offers an expanded menu and a list of options that reflect the stores’ locations. Southwest locations, for example, will offer spicy fare, while the Midwestern locations will serve hot soup during colder months.

Franchised Froots can cost from $80,000 to $200,000 depending on the size and location of the store. Froots are located in 80- to 300-sf kiosks or in-line store, which range from 1,000 to 2,000 sf. Though there are strict franchisee guidelines, Cavallo says a franchised store can be located nearly anywhere, as long as it is in a high-traffic area such as a mall, airport, train station, hospital, or college food-court area.

The franchise model made the most sense for this type of retailer, Cavallo tells GSR. “I started researching franchising 20 years ago, and I learned that best way to expand a business is by using other peoples’ money. Froots was the right business for franchising,” he says.

Store locations include James Town Plaza, Altamonte Springs, FL; Gold’s Gym, Orlando, FL; Shoppes of Arrowhead, Davie, FL; Butler Plaza Central, Gainesville, FL; the Cascades at Islesworth, Orlando, FL; Wal Mart Mini Shopping Center, Harahan, LA; and Sheridan Plaza, Hollywood, FL. In October, Froots will open at the Stirling Town Center, Cooper City, FL, and in September, the retailer will open at Pompano Citi Centre, Pompano Beach, FL.

The company is also predicting a wave of franchise development in Chicago with 25 stores open for business and another 50 franchises sold but not open by the end of 2006. “We can do it,” Cavallo assures.

David Gross with San Francisco-based Juice Bar Solutions, a juice-bar consulting firm, agrees that the smoothie industry is taking off. According to the most recent Smoothie Report released by Mintel International Group, 2003 smoothie sales were $1.2 billion–an increase of 15.6% from the prior year. The report also shows that smoothie sales increased 57% during the 1998-2003 period, and smoothie sales are estimated to increase 41% by 2008.