At Clean Juice, fast yet smart growth takes early investment
Asked to share what he’s learned in the nearly five years since opening the first Clean Juice store, CEO Landon Eckles chuckles before answering. “Don’t rent a small office,” he laughs, then recounts how he and wife and Clean Juice co-founder Kat Eckles moved into their first, second and eventually third office in the span of about a year.
First came a 500-square-foot spot. “We signed a three-year lease but after three months we realized we needed more space,” says Eckles. They broke that lease and moved to a 2,500-square-foot space with a five-year lease. “And about a year later we grew out of that space,” he continues.
Today Clean Juice’s headquarters occupy a 12,000-square-foot office in Charlotte, North Carolina, and the moral of the story for young franchises, says Eckles, is to create a clear plan for growth. “I understand not wanting to spend capital on an office … but I think there’s so much to be said to all be coming to work together, building a culture and really kind of grinding it out,” he says of the now 30 corporate employees across finance, marketing, development and operations groups.
With more than 80 of its USDA-certified organic juice bars open in just three years of franchising, Clean Juice is an emerging brand success story and among the only 9 percent of franchise brands that have between 50 and 100 units. That statistic from FranData should prove illuminating to start-up concepts and help keep some of their less than realistic expectations in check. Here’s another stat: 64 percent of franchises have fewer than 25 units.
It’s a harsh reality, notes Kay Ainsley, managing director at franchise advisory firm MSA Worldwide, but that doesn’t mean there isn’t plenty of opportunity for franchise brands to grow—if they have all the pieces in place.
“Really take a good, hard look at your own business model,” says Ainsley. “Set realistic goals” and develop a strategy that’s rooted in more than comments from a few customers telling you to franchise.
“There’s a big gap between, ‘wow, I love your pizza, your yogurt,’” and someone “actually writing the check, quitting their job and signing a franchise agreement,” says Ainsley.
Founders Landon and Kat Eckles still meet with every Clean Juice franchise candidate.
Speedy, but smart
For Eckles, “the name of the game has always been speed.”
“If you ask anyone, I’m probably the most impatient guy you’ll ever meet,” he says, a quality that’s helped fuel Clean Juice’s fast growth while at the same time tempering expansion plans so brand resources weren’t overextended.
“We wanted to grow first—we knew we didn’t invent the wheel with a juice bar,” explains Eckles of a strategy to quickly scale that had Clean Juice opening 30 stores within two years of its franchise launch. That first-mover advantage came with a healthy dose of fear.
“One of the horror stories you hear is a company sold 1,000 units and they open five,” says Eckles, referring to brands that sign franchise agreements for more locations than they can realistically support early on. “So that was my fear. We didn’t want to get a ton of units awarded and not have any open.”
That awareness pushed the Eckleses to carefully refine their franchisee selection process and refrain from signing large multi-unit development deals. It’s rare, notes Eckles, that the brand awards anything “more than a three-pack,” with most franchisees not signing for additional stores until “they’ve proved themselves with the first location.”
Discovery days are “very individualized” and involve meeting with both founders before moving on to the management team. Prospects then visit multiple stores, where Eckles says they’re encouraged to talk to franchisees and get a feel for operations.
“We set the expectation that it’s a big decision on both sides,” he says.
An early investor helped the Eckleses avoid what Ainsley says is one of the biggest mistakes she sees emerging franchisors make: being undercapitalized. “We can create the strategy, but if you haven’t budgeted for those initial costs, that initial part for franchise sales or marketing, you can’t get off the ground,” she says.
About two months after opening that first store in Huntersville, North Carolina, in 2015, Eckles says he and Kat were talking about bringing in outside capital when a customer approached them about investing. “We got that deal done within a week,” he says, and the money helped fund two more stores, the purchase of a juice truck and allowed them to get that first franchise disclosure document together.
“We really stretched out that capital,” Eckles adds. That investor is “more on the silent side,” but is on Clean Juice’s board.
Change is constant
With that capital and the subsequent opening of more corporate stores came a decision that founders of an emerging brand are ultimately faced with—that of stepping away from the day-to-day operations to focus on franchise expansion.
“It’s very hard to run a franchise business when you’re still operating a business,” says Eckles. “I knew I had to take that big step out of operating the store.”
The Eckleses hired a general manager and started building out the Clean Juice team, which included adding someone to spearhead franchise sales. Eckles notes many franchisors “can be a little fearful of hiring a team,” but not doing so often leads to stagnation.
“For me, I was never scared to make an investment in somebody because I knew it would free me up to really focus on the business,” says Eckles. “You’re only going to get as far as the people around you.”
Clean Juice has also evolved its menu, and while fresh juices—pressed bottled, labeled and sold on site at every store—remain at the core, “we’ve also launched toasts, bowls, wellness lattes,” says Eckles. “It’s all about listening to our guests and executing well.”
Well aware of increasing competition from the likes of Nekter Juice Bar, Main Squeeze Juice Co. and even Smoothie King and Tropical Smoothie Café as they make a play for health-conscious consumers, Eckles is always thinking about Clean Juice’s “share of stomach” and how to increase it.
“We’re not just competing with the juice bars but all the other cool new concepts out there,” he says.
The launch and expansion of a franchise concept isn’t for the faint of heart and requires a willingness to constantly evolve. It also takes confidence and a true belief in the brand, points out Eckles, who ends with one last piece of advice: “Don’t be afraid of what the future might hold.”
Editor Laura Michaels writes about emerging franchisors in The Upstart, which covers what it takes to build a better franchise system.