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Mrs. Fields and TCBY Are Rising From the Ashes, Hand in Hand Through dual branding and an in-store ecommerce business, the two sweet sister brands are hoping to cash in on a new type of franchise.

By Kate Taylor

entrepreneur daily

Opinions expressed by Entrepreneur contributors are their own.

In August 2008, Mrs. Fields Famous Brands – the parent company of cookie chain Mrs. Fields and frozen yogurt chain TCBY – filed for bankruptcy. Mall traffic was declining. The frozen yogurt market was overrun with new competitors. The end seemed near.

But somehow in the past year, Famous Brands' franchise unit growth doubled. Next year, it is expected to double again. COO David Bloom calls it a "renaissance" for Mrs. Fields, which opened its first store in 1977, and TCBY, founded in 1981.

What happened? The two chains discovered found the key to a new era of Famous Brands: cashing in on each other's strengths.

Famous Brands recently announced that, as of June, it would almost exclusively be developing dual-branded Mrs. Fields/TCBY locations, following successful tests by franchisees. Franchisees who expanded to offer both TCBY and Mrs. Fields reportedly swiftly doubled their profits, with little increase in franchise fees, occupancy costs or staffing.

"From a business standpoint, it really significantly changed our model," says Bloom. "In warm weather, we boom on the TCBY side, while Mrs. Fields is a little bit softer, and vice versa. So, when we put those two brands together, we took the seasonality out and [stores] were busy year-round."

Related: Why Domino's Latest Ad Was a Smart, If Unintentional, Marketing Play

Beyond balancing each other out, the two brands together are more than the sum of their parts. Mrs. Fields has traditionally been a food-court mainstay, and struggled as foot traffic in malls has plummeted in recent years. Meanwhile, TCBY was slow to adapt to a frozen-yogurt market that has embraced chains such as Pinkberry and Red Mango, which offer unconventional flavors, healthy toppings and a model that lets customers serve themselves.

When the two combine, Mrs. Fields has the chance to venture out of the mall and TCBY has a secret ingredient – fresh cookies – that other fro-yo chains lack.

"It's one of those ideas that just resonates with people, like milk and cookies," says Bloom. "It doesn't take a lot to convince people it's a good idea."

While both chains struggled to find prime locations to open Mrs. Fields and TCBY individually, the dual branded locations sparked landlords' interest. This year the company opened 85 new stores in the U.S., plus 35 internationally – twice the number it opened the year before. Next year, Bloom says the company is looking to double the number again.

While dual branding has been key in Mrs. Fields and TCBY's comeback, the new locations actually offer three streams of revenue: sales from cookies and frozen yogurt, plus gift merchandise in the form of Mrs. Fields Gifting Stations.

Famous Brands began testing gifting stations in Hong Kong two years ago. Mrs. Fields stores that offer the service dedicate about half of their square footage to gift products, such as cookies, brownies and popcorn, and ordering kiosks that allow customers customize and ship gifts anywhere in the world. In the last year, Mrs. Fields' gift merchandise, which is especially popular for companies sending gifts for corporate holidays, trade shows and business conferences, brought in $50 million.

Related: Franchisees Take 7-Eleven to Court for Alleged Racial Discrimination

Gifting stations at new Mrs. Fields/TCBY locations allow Famous Brands to introduce a new kind of franchise that brings ecommerce into the realm of franchisees. Most franchises, especially in the food industry, have focused on tech as a means to get customers into their stores, with coupons and deals, or to speed up business, with online and digital ordering. With gifting stations built into most new franchises, franchisees have the chance to add an entirely different form of revenue to their stores.

"Putting ecommerce into a brick-and-mortar business is somewhat the holy grail in how you maximize the return on investment for franchisees and brands," says Bloom.

The road to renaissance began at Famous Brands' lowest point, when the company declared bankruptcy in 2008 – and then narrowly avoided declaring bankruptcy again in 2011. In December 2011, Famous Brands ceded control of the company to creditors Z Capital and The Carlyle Group. In July 2013, Z Capital bought out The Carlyle Group to become the sole owner of Famous Brands. That's when, according to Bloom, things finally began to click.

"[Z Capital] knew they had great brands, and they knew that if done properly it could be successful," says Bloom. "So they took a year and a half, two years to get a new senior management team in place and start putting these strategies out there and testing them."

With the new dual branded franchises and an exploding ecommerce business, Mrs. Field's and TCBY's strategies are finally going from testing stages to major changes.

"Now, we're in somewhat of a renaissance, I think," says Bloom. "It's going to be very interesting. Yes, the brands, I think, lost some relevance in the last few years, but in the last couple years started to ramp up. Now, it's just exploding."

Related: Jamba Juice Is Going On a Serious Franchisee Recruitment Spree

Kate Taylor

Reporter

Kate Taylor is a reporter at Business Insider. She was previously a reporter at Entrepreneur. Get in touch with tips and feedback on Twitter at @Kate_H_Taylor. 

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