Franchiser of highly successful Greco Pizza and Capt. Sub taps into burgeoning self-serve frozen yogurt market.
Published in the February issue of Progress magazine.
It’s been over thirty years since Bill Hay and Michael Whittaker helped launch the Truro, N.S.-based franchising company Grinner’s Food Systems and started changing the franchise landscape in Atlantic Canada. From just ten franchises in 1981 to over one hundred Greco Pizza and Capt. Sub locations throughout the region in 2013, Hay, Whittaker and their team at Grinner’s have appeared to find the formula for successful franchises. Now they’re looking to accelerate the company’s growth by tapping into the burgeoning self-serve frozen yogurt market, a decision they came to just last April. One hundred and thirty two days later, they opened the first FROZU in Truro.
“It was an amazing feat,” says Whittaker, Grinner’s president. “Often companies will take years to develop the concept, and 90% of the time there’s no reason for it. By opening quickly, we had an excellent opportunity to see how the concept worked in August, September, and October.” Whittaker now has a business model to show franchisers: the peak weeks, low weeks, what the labour runs are, what the food cost run is, and what the wastes are. Seven other Frozu franchises have since been launch in such places as Oromocto, N.B., Summerside, P.E.I., and St. John’s. And Whittaker expects to have a total of 20 open by June.
It wasn’t easy getting Frozu off the ground so quickly. From picking a name and figuring out labour costs for a type of business they had never run before, to flying to Toronto to find the best product, the team had its hands full. The biggest challenge, says Hay, the chair of Trucorp Investments Inc., which owns and operates Grinner’s, was entering a market with few advertising dollars. “When you’re starting small with a new brand like this, you have limitations to your budget for advertising and marketing,” he says. “So you don’t have that brand recognition to start.”
Grinner’s is trying to counter Frozu lack of face time by opening some locations within the same space as other retailers, including its own; for example, Truro’s Frozu is in a Capt. Sub outlet. That means franchisees can tap into the traffic and established recognition of an existing business. “It also means the risk is mitigated because you can share the overheads,” says Hay. “I think it’s one of the biggest advantages of this product.”
Another perk is the current popularity of self-serve frozen yogurt. The Grinner’s team has watched the trend grow for the past several years in California, and when it hit Ontario about five years ago, and the big three—Yogurty’s, Menchie’s, and Pinkberry—started expanding across Canada last year, they knew it was time to hustle. “It’s a huge draw, especially for young people—young women, in particular—between the ages of 16 and 20,” says Whittaker. “They’re enthralled with the concept of being able to customize all of their desserts.”
Grinner’s is hoping its customers’ love of Frozu is strong enough to ward off the big players that are trying to encroach on their growing market share. Whittaker doesn’t seem worried, but once again he sees the need to move quickly. “A lot of the big companies from Ontario and California are starting to look at the smaller markets, but we know we have a certain amount of time to open 30, 40, 50 stores in Atlantic Canada,” he says. “Once you have that many, you have more marketing power.”