Click to Print

Building a Frozen-Treat Empire

One entrepreneur's looking to share the sweet taste of success.
May 13, 2009
URL: http://www.entrepreneur.com/article/201644

Franchisor: Jim Amos Jr. of Tasti D-Lite, a dairy-based frozen dessert company
Founded in: 1987
Franchising since: 2008

The truth is, when we [the private equity firm SPG Partners] went in to look at this business, I wasn't very optimistic.

. Earlier ventures: Before Tasti D-Lite, Amos was the CEO of Mail Boxes Etc. and built a 1,300-outlet network for I Can't Believe It's Yogurt.

. Never hurts to: Be featured on Sex and the City and The Apprentice. Amos says, "We've created a cult-like following."

. Going global: Amos has commitments from more than 200 franchisees, as nearby as Houston, Nashville and San Antonio, and as far away as Mexico and South Korea.

. Potential payoff: $20 million to $25 million in systemwide sales this year.
But after some initial due diligence, it became very apparent that Tasti D-Lite stood out as an extraordinary New York concept. It's been around for more than 20 years and grew organically with little to no advertising or marketing. That makes the product very unique.

It was clearly thriving in one of the most complex retail environments in the country. And it was satisfying one of the most sophisticated and demanding consumer bases in the world.

Frankly, franchising is the only vehicle that would enable us to convert a concept like Tasti D-Lite into both a national and an international brand.

We bought the company in 2007 and spent about a year and a half working on trademarks, logos, service marks, store design and conducting focus groups all over the country--in Los Angeles, Chicago, Dallas and New York--just to make sure that we understood the brand's impact and its ability to be scaled outside of New York City.

One of our biggest challenges was creating a franchise infrastructure that simply didn't exist in the original company. We needed to take care of legal and registration issues, marketing programs, website development and accounting structures.

At the same time, it was challenging to create a compelling program that would encourage the original licensees to convert to the franchise relationship.

We offered the franchise opportunity to 44 licensees and 36 of them converted. That's not too bad.

I have confidence that the small-business community, and business-format franchising specifically, will be the primary factor that will help heal our economy, improve it and move it forward. --As told to Sara Wilson