Emerald City Smoothie is one quick-service brand that is getting creative as it seeks to expand in a tight credit market. The 63-unit chain, located primarily in the Northwest, is focusing on a variety of tactics to appeal to franchisees, from store design to its franchise marketing efforts.
Julie Vance, vice president of operations for Emerald City Smoothie, said the company had already been developing a kiosk store model before the downturn. But with credit tight, the smaller, less expensive unit has become popular with existing and prospective franchisees.
The kiosk model reduces the buildout cost by about 50 percent, Vance said. Many of the units are being located inside large fitness centers or other complementary businesses to reach the brand's core customers.
The brand's healthy meal replacement smoothies appeal to fitness customers and have helped the company be somewhat recession resistant.
"We continue to see incremental growth, and it's really related to the overall wellness industry and its growth," she said.
Franchisees are opening one or two kiosk stores a month, with the speed of opening dependent upon finding the right location more than obtaining credit, Vance said.
Another new design is an inline store with a much smaller footprint than the chain's traditional 1,000-square-foot units. The smaller units are designed for high-traffic locations and also reduce the buildout costs. That design also is appealing to franchisees because its speeds up the time to open as well as offers a faster return.
"When you're spending half, it's much easier to improve your return on investment," she said.'
Franchise incentives
Emerald City Smoothie also is offering several incentives as it markets to potential franchisees. One is a buy-one-get-one-free offer, which offers a free kiosk location to operators who also open a standalone unit.
Although the $20,000 savings is a good value, Vance said the program has not been as successful as the company had hoped, largely due to fewer franchisees wanting to operate more than one store as well as the tightened credit market.
An incentive program that has drawn interest is the company's master franchisee focus. The intent is to open up new territories and offers franchisees the rights to develop locations in an entire region or state.
Industry growth prospect
Alisa Harrison, spokeswoman for the International Franchise Association, said it's become more common for franchisors like Emerald City Smoothie to adapt their programs to help franchisees obtain the necessary financing. Such flexibility is an example of the entrepreneurial spirit inherent to franchising.
"We still expect that franchising will continue to outpace growth of other businesses," she said. "It's just that many may not be growing as fast as we have seen in the past. But the model of the way of expanding your business and growing your business certainly is true in good times and in bad."
