But Mr. Cha has grander plans. A national advertising campaign
is on the books. A potential TV show and an entertainment complex
are in the concept phase. Tentatively dubbed Sweet Frog Land, it
will be on the order of a Chuck E. Cheese or Dave and Buster's. The
company also sells hats, T-shirts and plush toys of its frog
While it does not disclose sales, Sweet Frog said its franchise
fee is $30,000 per location. Franchisees pay a monthly fee of 6% of
gross sales, of which 1% goes to marketing.
"We really appeal to families, particularly those with children
still in the home," said Ms. Williams. "We do very well in
midmarket cities, where we're usually located close to movie
theaters or Walmart or other big-box retailers."
Value-per-ounce price ranges from 41¢ to 49¢,
depending on the market -- is another key ingredient in the chain's
success. Consumers dispense their own yogurt, with a typical store
selection of 16 to 18 flavors (out of Sweet Frog's corporate master
list of 60), and add their own toppings from a locally curated set
of choices. One store, for instance, is next to a strawberry farm
and they promote each other, Ms. Williams said.
Sweet Frog isn't the only rising star in the self-serve fro-yo
category. From Orange Leaf in the Midwest to Yogurtini in the
Southwest and Yogurt Mountain in the Southeast, the competition is
fierce. Its family-friendly concept plays well in the Middle
American suburbs, providing a counterbalance to more metro-focused,
sleek chains such as Pinkberry and Red Mango. Both of those are
part of the rise of tart fro-yo dispensaries, with
modern-palate-pleasing flavors such as green tea and pomegranate,
which have challenged more-traditional shops such as TCBY.
TCBY tops the $723 million fro-yo-store segment with an 18%
market share but is followed closely by the new wave of hipsters.
Pinkberry has a 16% market share; Red Mango, 14%; and Yogurtland,
8%, according to IBISWorld. No. 1 TCBY's market share has fallen
from 34% in 2006, while No. 2 Pinkberry has risen from 9%.
The emergence of the frozen-yogurt stores drove overall sales
growth of 6% annually from 2006 to 2011, the researcher said. It
estimated that continued, albeit smaller, annual growth of 2.5%
will last through 2016.
Self-service stores such as Sweet Frog are particularly on the
rise, thanks to consumers' preference for controlling how much and
what toppings they buy. Overall revenue from full-service stores
accounts for 79% of sales, while self-service makes up the
But with the new wave of shops, there is also uncertainty that
the category could suffer from the Starbucks syndrome. A Mintel
research report in September said: "Will the market bear a place to
get a $5 cup of fro-yo on every corner, like it did with coffee in
the '90s? The next year or two will tell us whether this second
wave of fro-yo will be as difficult to sustain as the first."