Freshii CEO Makes Play for Unprofitable 'Zees
Freshii's CEO Matthew Corrin
“Cupcakes are dead. Froyo is finished. Juice is next.” So declares the CEO and founder of Freshii, Matthew Corrin, who yesterday released an open letter to franchisees, urging them to ditch their “unprofitable frozen yogurt and juice bar” franchises “around the world” and convert to a Freshii. Until July 4, he’ll even waive the franchise fee for those who convert.
Why the provocative statements, which the CEOs of Gigi’s Cupcakes or Menchie’s Frozen Yogurt, to name only a couple, might reject? “In a world full of generic strategies, we engage in the non-traditional across all facets of our business. I think it’s an interesting way to start a conversation with a community that might be great franchise partners for us,” says Corrin in an interview.
What small-business owners forget, Corrin says, is they’re typically signing 10-year leases. “My belief is there are many restaurant fads that don’t have a 10-year life cycle. So you sign something that’s going to work out well in year one or two, but depending on how you hit the trend” it may not last.
“Our whole brand is designed to be the antithesis of that. We don’t want to be known as the hottest brand in every community. We want to be known as the utility brand, so people can access healthy food, and the definition of healthy is changing over time.” He notes the baked potato with a large choice of toppings used to be considered healthy; not so much today.
Corrin says he learned the value of a broad-based menu the hard way: His first concept was called Lettuce Eatery, serving 98 percent salads, which he built to eight locations in Canada. Then he built his first Freshii, in Chicago, with a varied menu. “I said whoa, this is the future. The future is broad and the future is a different customer than I’ve seen before,” he recalls.
This isn’t Corrin’s first foray into writing “open letters,” although this attempt is unlikely to get as much attention as the last time. In May 2015, he wrote an open letter to Steve Easterbrook, McDonald’s CEO, proposing a “bold risk” that founder “Ray Kroc would endorse.” He urged the fast-food king to “partner with us. Save the world, and help yourselves.” He wanted to co-brand a Freshii outlet in a McDonald’s store, anywhere in America. “My promise: If after one year Freshii in McDaonald’s has not improved your sales and profits, I will refund you the difference.” He signed the letter Matthew Corrin, Freshii CEO, Millennial.
Freshii has 300 stores open today, Corrin says, but he’s coy about other franchise facts. They don’t provide an Item 19 in their franchise disclosure documents, and don’t release average unit volumes in the stores. He won’t say what percentage of stores will be conversions of existing franchise owners rather than new. He also says he knows which restaurant trends will be the next to fade, but he won’t name them—just that he’s sure Freshii’s menu won’t be one of them. “There are very few concepts that can only forever do one thing, and we wanted to remain broad,” he says.