Intro to Franchising
Franchising is a popular method for expanding business. Through a licensing relationship a franchisor, or business owner, essentially sells a franchisee the rights to open a new business location. For instance, Jamba Juice has many franchise locations, all of which were sold to various franchisees across the country. Once the Jamba Juice franchisee purchases a franchise, they are granted the right to build their own location using preexisting systems, regulations, etc.
Franchising is an attractive business model for anyone new (or not) to the industry. Unlike an independent business, which requires growing from the ground up, a franchise comes with a pre-established, and usually successful, operational system. Through extensive training programs, franchisees learn all the ropes behind the business, eliminating the daunting trial and error process. Not to mention, a franchise comes with brand recognition is built right in.
A Jamba Juice FRANCHISE COMES WITH A PRE-ESTABLISHED OPERATIONAL SYSTEM.
Anyone looking to purchase a franchise will be given a Franchise Disclosure Document (FDD). It’s imperative that any franchisee fully understand the components and contents in any business’ FDD. Consisting of 23 different parts, the FDD, a legally mandated document, outlines different key pieces of information involved in franchise purchase. For instance, a Franchise Disclosure Document tells the interested franchisee more about the total fees and costs associated with purchasing the franchise of their choice.
The overall intention of the document is transparency. Both the company and franchisee need to be on the same wavelength in order for the purchase and future management of the business to run smoothly. Click here to see a more in-depth description and analysis of the Franchise Disclosure Document.
Jamba Juice Franchise History
With hundreds of locations across the country, Jamba Juice is one of the most popularly recognized smoothie restaurants today. Considering the national-level attention the franchise has received over time, it’s difficult to believe that the popular franchise began as a college student’s senior year project.
Before the Jamba Juice company was formed, it was created as Kirk Perron’s senior project at California Polytechnic State University. Perron, a cyclist and healthy-lifestyle advocate founded the company on March 31, 1990 with three friends: Kevin Peters, Joe Vergara, and Linda Ozawa Olds. The first location was opened in San Luis Obispo, California , which is where Jamba Juice was incorporated. Within the first weekend after opening, more than 2,600 customers walked into Jamba Juice.
Jamba Juice grew in popularity steadily over the years, especially as the popular lifestyle culture began to gravitate towards health and fitness. In 2001, Jamba Juice acquired all Zuka Juice stores and became the most prominent smoothie company at the time. Jamba Juice expanded across the country and opened its first New York location at Columbus Circle.
As more locations opened, Jamba Juice expanded its product, offering both smoothies and juices. In 2007, the company partnered with Nestle, creating ready-to-drink products.
More recently, as smoothie and juice products have grown in popularity, Jamba Juice has stayed on trend, beginning to offer healthy food options at its locations. The company has even introduced vegan food options and contemporary decor and wall art.
Franchising Since 1993
David Pace, Director, President, and Chief Executive Officer.
Marie Perry, Executive Vice President, Chief Financial and Administrative Officer.
Claudia Schaefer, Senior Vice President and Chief Marketing Officer.
Josh Nicosia, General Counsel, Vice President of Development.
Joe Thornton, Senior Vice President, Chief Operations Officer.
Loren Bontrager, Director of Franchise Business Development.
The Initial Franchise Fee for a Jamba Juice Franchise varies according to the amount of stores the franchisee wishes to purchase. With only one store, the franchise fee is $35,000. For two stores, the fee totals $65,000. For three stores, the Initial Fee is $85,000. Finally, for four stores, the total Initial Franchise Fee totals $100,000.
For non-traditional stores located anywhere aside from a mall or grocery store the prospective franchisee must pay an Initial Fee of $10,000.
Neither Jamba Juice nor any of its agents offer direct or indirect financing.
Training and Assistance
Certain portions of the franchisee training program may be conducted online as part of the Jamba Juice franchise’s computer-based training (CBT). The franchisor recommends that the store use a computer or tablet with WiFi to access the CBT program.
Any franchisee or individual responsible for the operation of the store, including managing owners, must successfully complete all initial and ongoing training. At all times, each location must be under direct supervision of an employee that has completed all training programs.
Managing Owners and General Managers for the Jamba Juice location must complete a total of 18 hours of CBT and 68 hours of on-the-job training.
Location of the Jamba Juice franchise
It is not guaranteed that your Jamba Juice franchise will receive an exclusive territory, meaning that the franchisee may face competition from other franchisees in the area.
Franchise Agreement: Non-Traditional Stores
Non-traditional stores are not granted a protected territory. The franchisor may authorize others to establish locations adjacent or nearby the location of any other Non-Traditional Store.
Franchise Agreement: Traditional Stores
Traditional stores may only operate their store from a location that the franchisor approves. The franchisor approval is based on various factors, depending on the location demographics.
When the Traditional Store location is approved, the franchisor will establish a territory.
Term of Agreement and Renewal
The initial term for the Franchise Agreement is 10 years from the start date.
Under the Franchise Agreement, franchisees have the right to renew the franchise for two additional ten year terms.
Restrictions on What the Franchisee May Sell
Unlike many franchises, there are only specific instances in which Jamba Juice franchisees are obligated to purchase or lease from Jamba Juice or the franchise’s approved suppliers.
Jamba Juice may accept or reject the location of your franchise at their discretion. While choosing a location, the prospective franchisee must work with the franchisor’s recommended real estate professional tasked with assisting in location selection. Furthermore, the franchisee is responsible with paying the real estate agent’s fees. Once the franchisor accepts a location, the franchisee must build their restaurant in accordance to the Jamba Juice Franchise specifications.
Goods, Supplies, Inventory, and Services
The franchisee must serve all and only products authorized by the Jamba Juice franchise. All products with any of the Jamba Juice trademarks must be purchased exclusively from Jamba Juice or from a supplier approved by the franchisor.
All Jamba Juice products sold at the restaurant must be prepared with the ingredients, powder mixes, and raw materials as outlined by the franchisor. These are often referenced as Proprietary Products, which must also be purchased by Jamba Juice or the franchisor’s designated suppliers.
Computer Equipment and Computer-Based Training
Unless the franchisor explicitly waves the requirement, franchisees are expected to use a Point-of-Sale system (POS System) approved by Jamba Juice, including the hardware specified by Jamba Juice.
Marketing Contributions are used, in part, to pay for various materials such as posters or menu boards in the location. Franchisees of Traditional Stores and Non-Traditional Stores within Shopping Malls must spend at least 0.5% of Net Sales each quarter on local advertising.
Jamba Juice outlines a number of obligations that the franchisee must fulfill under the Franchise Agreement. These obligations include site selection, pre-opening purchases, initial and ongoing training, compliance with all standards, among others.
At the end of 2017, the Jamba Juice franchise system had a total of 802 different locations.