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Franchising's in Pinkberry's stars

Pinkberry, founded in 2005, grew quickly thanks entirely to two things: significant buzz for its frozen yogurt and franchising. Yet just as the chain appeared poised to make a nationwide push, it stopped franchising and, seemingly, slowed down.


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What gives? Ron Graves, the company's chief executive, said franchising is definitely in the company's future plans but that its program has been suspended as the company maps out its strategy. Executives want to determine the right balance of corporate versus franchise units.

The company has earned some influential fans in its short history, notably Hollywood stars. That buzz helped the chain become profitable almost immediately. It's also a huge reason that frozen yogurt – initially popular in the 1980s – has enjoyed something of a resurgence. Sales grew 14 percent last year, according to research firm, Packaged Facts.

The yogurt has a more tart flavor than 1980s' ice cream-like yogurt. At Pinkberry it comes in three flavors – original, green tea and coffee – and can be topped with fruit, nuts or candy.

The company's 50 locations are exclusively in the Los Angeles and New York City areas – for now. "I don't see this as a coastal company," said Graves. "This works anywhere."

How? It's one thing to generate significant buzz for a healthier, trendy product in places like Los Angeles or New York, it's something entirely dfferent to maintain a nationwide popularity in places like Missouri and Ohio over the long term.

Graves said the chain would succeed in filling that gap because of the quality of its yogurt, which has earned a strong and loyal fanbase that sometimes labels it "crackberry." The store's design and its customer service would be strong selling points, he said. But he would not, however, discuss the chain's unit economics, or how the company plans to sustain sales after the product's buzz wears off.

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