Chain takes scoop out of frozen yogurt market

LAKE IN THE HILLS – Local chain Yumz Gourmet Frozen Yogurt wants to take a bigger bite out of the growing frozen yogurt market.

The Elgin-based company opened its first store in November 2010 along Route 14 in Crystal Lake. Another store, on Randall Road in Lake in the Hills, opened in July 2011.

The business was designed from the beginning to be a franchise, said Yumz CEO Matt Thelander of Crystal Lake.

Yumz has grown steadily amid a national frozen yogurt boom in recent years, though not nearly as quickly as other franchises in the increasingly crowded industry. The resurgence of frozen yogurt in tough economic times reflects America’s appetite for health-conscious treats.

Yumz has nine stores in Illinois and one in Indiana. Two more are expected to open soon, one in Lombard and another near Tampa, Fla. Others are planned for California and Wisconsin, said Thelander, who partnered with his wife, Lori, and John Barnes on the venture. The Thelanders are Cary-Grove High School graduates.

Yumz remains a small player in the larger frozen yogurt market. Industry sales hit $760.1 million in the U.S. in 2012, according to market research firm IBISWorld. Sales are expected to continue to climb in the next five years.

After significant growth in the 1980s, frozen yogurt sales dropped off in the 1990s.

Pinkberry, Red Mango, Yogurtland and Menchie’s have been leading the segment’s revival. Each has more than 200 stores worldwide. Red Mango has one at 1114 N. Green St. in McHenry, among more than two dozen stores in Illinois.

Yogen Früz, a chain founded in 1986 during the last yogurt boom, has 1,300 stores in 42 countries, including one in the Algonquin Commons shopping center on Randall Road. Another holdover, TCBY, has 470 stores in the U.S.

“Frozen yogurt took off in California and the southern states and it has expanded to major cities across the country,” said Darren Tristano, executive vice president at Technomic Inc., a Chicago consulting and research firm serving the food industry. “Now we’re starting to see more aggressive franchising, saturation in larger markets and new stores opening in smaller markets.”

Competition is intense with franchises scooping out new territory across the country.

“We’ve seen quite a few indpendents that have opened with the intent of expanding and franchising,” Tristano said. “The health halo around frozen yogurt has a lot to do with it. So does the tart and tangy contemporary taste profile.”

Customization is another factor in the industry’s growth. Many frozen yogurt companies have adopted a self-serve model, which allows customers to create their own treat with different flavors of frozen yogurt and assorted toppings.

The self-serve model also can lower the investment and cost of labor for franchisees.

“Three years ago there wasn’t as much competition,” Thelander said. “Now all the big players are moving in.”

Still, the partners are pleased with the company’s growth.

“Our goal was never to be the biggest,” Thelander said. “Our goal was to attract good people and become entrenched in the communities we serve.”

Yumz started with a focus on taste.

“We spent months searching for the right recipe,” Barnes said. “Our taste sells the brand.”

They also wanted to make the Yumz concept easy to replicate.

“We began with franchisees in mind,” Barnes said. “In terms of cost, supply, maintenance, this is what we’d want if we were a franchisee.”

Opening a Yumz store costs about $250,000 to $300,000, Barnes said. The average initial investment for a frozen yogurt store is about $400,000, Franchise Times reported earlier this year.

Yumz touts its training program, social media reach, and growing legion of fans to potential franchisees.

The chain’s Coolest Combos concept, which allows visitors to create and name their favorite combinations of 40 rotating frozen yogurt flavors and 65 toppings, has proven so popular the company trademarked it.

Hundreds of Coolest Combos are listed on Yumz website. Customers also can browse through them on touch screen displays in stores. Thelander’s Coolest Combo, named “Matt’s Chocolate Explosion,” features a mix of chocolate and cake batter frozen yogurt topped with cookie dough and Oreos.

Yumz uses social media, text notifications, and emails to offer special promotions and discounts. Its texting club has really taken off, with more than 4,000 users.

“We try to have fun with it,” Thelander said. “On President’s Day, we said ‘Come in and say ‘George Washington’ and get 10 percent off.’”

Yumz plans to continue to grow regionally and nationally. Franchisee interest has been high. Barnes said he gets about 200 to 250 requests for franchise information a month.

“Some chains have focused on opening as many stores as fast as they can,” he said. “We’re focused on strategic growth, in very good locations, in very good markets, and with with very good people.”