Bruster's Real Ice Cream Heads Inside
There's nothing like eating ice cream on a warm summer day. The problem, at least for a walk-up ice cream franchise like Bruster's Real Ice Cream, is that Mother Nature can quickly turn that perfect summer day into a nightmare. "We call them $1,000 thunderstorms," said CEO Jim Sahene—as in a single thunderstorm can cost a franchisee $1,000. So Bruster's is moving inside.
The 200-unit Bruster's, based in Bridgewater, Pennsylvania, is introducing a new concept that takes the chain from stand-alone locations to smaller, inline units. There, it could add more products like smoothies and frozen yogurt. More importantly: it's a lot cheaper.
Bruster's has struggled in recent years. The chain's locations had grown steadily until 2007, when unit count began to decline. "The recession wouldn't go away," Sahene said. Sales weakened, franchisees closed, and the well of new operators dried up along with lending.
Here's a big reason why: average unit volumes at a Bruster's are about $310,000. Yet a traditional "treat theater" stand-alone building costs $1 million to build. For those keeping track, that's an ugly 3-10 sales-to-investment ratio. It takes a while to generate a return on that kind of ratio, and no bank would touch that.
The new prototype brings that investment down by 75 percent, to $250,000, to open a new store. It also takes a lot less time to get that location open, 90 to 100 days, versus the 18 to 24 months it could take to build a standalone location. The new prototype takes up about 1,200 square feet, similar in size to a Cold Stone.
Sahene also believes that the new prototype will enable the chain to more easily add new products to make the concept a more year-round destination, including smoothies and frozen yogurt. Sahene acknowledged that the recent boom in frozen yogurt franchises has taken some of his business, and he wants to get some of that back. He estimates that the new inline destinations could have unit volumes that average $400,000. Given the investment, that's a far healthier sales-to-investment ratio. That makes the idea far more attractive to the franchisees that will grow the brand.
Indeed, it's a franchisee that will open the first unit of the new prototype, in Panama City, Florida. "He was eager to do that," Sahene said.
Apparently, he's looking forward to the end of the $1,000 thunderstorm.