The Building Blocks of Super-Fast Franchise Growth
When we were ready to begin franchising, Jeremiah’s Italian Ice had already spent more than twenty years building a strong brand, a cult-like following and 22 locations in Florida. We wanted to grow the way the most effective franchise brands in the world have grown, and we turned down thousands of inquiries over the years until we knew we had it right. Now, our undeniable momentum and thirst for growth have led us to finding the right partners and building a thoughtful franchise program—one focused on rapid, sustainable growth. And the results have been incredible.
The work we’d done during that time had gotten the attention of private equity companies, individual investors and plenty of people eager to own a Jeremiah’s Italian Ice and ice cream franchise.
Kickstarting Our Rapid Franchise Growth
In 2018, we joined forces with some of the most accomplished players in franchise development—Pivotal Growth Partners (PGP)—to build on our effort and spread our Culture of Cool nationwide. Since then, we’ve signed development deals for 173 locations across the U.S. Here’s what we’ve learned about franchise growth in that short time.
Not Every Brand Can Grow Like We Have
Only around 8% of brands ever make it to 100 locations. This isn’t because the other 92% aren’t great brands, nor are they undercapitalized. They just don’t know what they need to scale efficiently and sustainably. Most emerging brands lack the structure and systems it takes to get there. Our founder and CEO Jeremy Litwack and the rest of the leaders at Jeremiah’s knew from the beginning that they had to get it right. That’s why they spent over two decades perfecting our brand, products, systems, processes and procedures.
We became experts at the craft of operating industry-disrupting frozen dessert shops. Then it was time to step into the franchise world. The growth experts at PGP helped us recognize and capitalize on what we were doing right, and adjust our system for rapid franchise growth. According to them, it takes three key elements to grow like this.
What We’re Doing Right
An Undeniably Cool Brand
Wherever we go, our fans want to follow. They love our upbeat, retro tunes, our classic flavors, our bold colors and our feel-good, always-cool atmosphere.
An Unrivaled Product
The Italian Ice industry doesn’t have a clear leader, and definitely doesn’t have another brand serving treats as decadent and delicious as ours.
Unbeatable Unit Economics
We’re leading our category with a whopping $540,878 AUV* and 52% gross profit after cost of goods and labor excluding occupancy—it all comes down to high margins, minimal labor, no cooking and no pricey cooking equipment.
How We Stayed On Top Throughout 2020
Like every company in the restaurant industry, we felt the hit of the coronavirus pandemic. But we were fortunate and well-positioned not to lose momentum. As dining out came to a sudden stop, we were able to rely on alternative revenue streams like Jeremiah’s To-Go—our trio of offsite channels including carryout, delivery by UberEats and DoorDash, and drive-thru where available.
Staying True to Our Frogma
Generosity is one of our core values. During the pandemic, Jeremiah’s contributed 23,000 Sweet Incentives (free item vouchers) to the Orlando Health system as a giveback campaign for their front-line workers who gave and keep giving so much to turn the tide of the pandemic. We’re also proud to have donated more than 150,000 Sweet Incentives to local school systems in the fall.
We also completely overhauled our franchise Discovery Day process in a matter of two short weeks to keep our brand growing despite the limitations imposed by the pandemic.
Our adaptability paid off in the form of 52 deals signed in the first six months of 2020, 20 of which were awarded during the early uncertainty of the pandemic in March and April. In fact, we further solidified our image as the Hottest Franchise with the Coolest Treats by awarding four additional area representative agreements totaling 131 units in the first quarter of 2020.
Here’s To The Future
2021 is already looking like another strong year for franchise growth at Jeremiah’s. Since January, we’ve opened 11 new franchise locations and are on-track to open an additional 25 – 30 locations before 2022. Looking ahead, we’re setting ambitious but attainable growth goals, targeting a total of 60 additional franchise locations in 2022 and 310 total franchise locations by the end of 2024.
*Average unit volume means the 2020 average “Gross Sales” (as that term is defined in our FDD) for our 22 company- and 1 affiliate-owned Jeremiah’s Italian Ice Shops that were open for all of 2020. During 2020, 10 of those 22 Jeremiah’s Italian Ice Shops (43%) had gross sales that equaled or exceeded that average. The median Gross Sales for the 22 Jeremiah’s Italian Ice Shops in 2019 was $498,881. Please refer to Item 19 of our FDD for all of the relevant details.