Foodservice Equipment & Supplies

OCT 2017

Foodservice Equipment & Supplies magazines is an industry resource connecting foodservice operators, equipment and supplies manufacturers and dealers, and facility design consultants.

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OCTOBER 2017 • FOODSERVICE EQUIPMENT & SUPPLIES • 77 e&s segment spotlight estimates for 2016 to 2021 coming in at 5.8 percent. "The self-service model, like Pinkberry, Red Mango and Yogurtland, is more viable," says Tristano. "The weigh-and- pay format works well, because by the time customers add their yogurt and toppings, there is more opportunity for higher price points." Self-serve stores have an advantage over full-service stores in that they can reduce wage costs, according to IBISWorld. Since employees do not take orders, the self-serve format requires fewer employees per store and less training. In addition, the self-serve format caters to the rising do-it-yourself trend, where consumers customize and personalize their orders. The barrier to entry for frozen yogurt shops also remains somewhat low. "From what we've seen from many locations, six frozen yogurt machines with each having two different flavors is the right number," says Tristano. "This provides customers with the ability to create a combination of flavors." Seasonal and limited time offerings also are key compo- nents to customer retention. While sweet flavors remain prominent, an increasing num- ber of chains now include sour options as well as more unique flavors of yogurt. In the last five years, the tart version, which is derived from yogurt and has less sugar, has taken off. A Unique Business Model Peachwave is not only distinguishable as one of the first self-serve frozen yogurt concepts, but it also is unique in its business approach. Opening its doors in 2009, the 54-unit chain offers a different format than a franchise. "Peachwave is a trademark licensing model instead of a franchise," says co-owner/CEO Boyd Feltman. "That means we do not charge fran- chise fees associated with initial licensing, royalties or marketing and we sell our proprietary and branded products at bonafide wholesale prices to our licensed store owners. We believe it's a more resilient model than franchising." Feltman purchased Peachwave in April of 2015 from its founder, Kevin Moon, who recognized the potential of froyo's self- serve model early on with his first location in Edmond, Okla. A finance executive with General Electric, Feltman fell in love with the Peachwave brand and was looking for a path back home to his family in Michigan. His first store in Holland, Mich., was so successful that he opened a second location near Grand Rapids, Mich., the same year. With Moon pulling back from the business, Feltman spent eight months considering his strategy and crunching numbers before making an offer to purchase the frozen yogurt company with a partner investor who prefers to remain anonymous. In addition to its licensing model, Peachwave's fresh daily production also helps distinguish the concept from others in the froyo space. Each store kitchen serves as a factory, with milk sourced locally. "We have proprietary yogurt and gelato mixes, flavors and recipes, with the yogurt and gelato frozen only moments before it's served for maximum creaminess and freshness," says Feltman. Peachwave's equipment includes yogurt machines, two- door refrigerators and freezers, walk-ins at some locations, food shields, mixers and sinks. The chain's stores are transitioning from water- to air-cooled yogurt machines. "Water-cooled units require additional install expenses, and we've found them to be more expensive to operate and repair over time," says Feltman. "It's another way we can pull down the up-front investment for operators and provide a better return on investment." The chain also is moving from deli-style topping bars to two-deep topping pans to increase topping accessibility. The slim line setup also is easier to maintain, Feltman says. This equipment conversion coincides with Peachwave's ambitious growth plans, which include enhanced marketing to find new licensees for new store growth, the first time for this chain. Two-deep topping pans increase accessibility for Peachwave custom- ers and simplify maintenance.

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