Why I Founded an Ice Cream Franchise
Why I Franchised is Entrepreneur's Q&A interview column that puts the spotlight on franchisors.
If you believe Greg Sausaman, the ice cream business is the sweetest industry around. Sausaman co-founded Toppers Creamery nine years ago, with a group of operators with more than 30 years of experience in the food and franchise industries. All that knowledge led them to one place: ice cream. Here's why Sausaman franchised, and why he believes that potential franchisees should be eager to get in on the business.
Name: Greg Sausaman
Franchise: Toppers Creamery is a premium soft serve ice cream provider. We have several retail outlet options, ranging from free-standing drive thru locations to multi-branded non-traditional venues where Topper's Creamery Express is in a kiosk as a secondary brand with established operators. The Express brand was engineered to function as an added ice cream option in as little as four linear feet. The return on investment is well above any industry average, with ROIs above 100 percent in many locations, as well as investments as low as only $5,000 as part of our turn-key equipment leasing program.
Non-traditional venue target locations for Topper's Creamery Express include airports, college campuses, theme parks, large retailers, large resorts, and other high traffic venues with at least 3,000 people daily. We have non-traditional operational offerings that succeed with ice cream volumes of $150 per day, or in ultra-high volume venues with ice cream sales potential above $10,000 per day.
How many units are franchised and company-owned?
Of our 14 current units open, we have one that is wholly franchise owned. We have another ten that are owned as part of a joint venture group of friends and business partners, while another three units are wholly company owned. No. 15 is already in motion and will be another multi-branded location in the lobby of a major international hotel/resort brand.
When was the company founded?
June 2006. We are celebrating nine years in business this month.
How did you decide to franchise your business?
We planned to franchise the business from Day 1. We are 30-plus years experienced operators. Our chairman, Wade Oney, helped build Papa John's to a billion dollar brand while he was COO. When we founded Topper's Creamery, we asked ourselves what we would do if we wrote a book entitled "How to Start a Successful Franchise." While we didn't write such a book, we strategically planned our approach.
There were three prime factors that made soft serve ice cream the choice:
- Ice cream and the experience with ice cream is a fun thing, with intrinsic value. It is smiles, families, treats, and it brings people together. It directly reflects our core values.
- Wade's three favorite foods are pizza, fresh Mexican food, and ice cream. Wade is involved as a franchise owner in all three of those segments.
- We analyzed the QSR market, identified where margins could be attractive, and, based on our collective experience, chose soft serve frozen custard. We found many long-lasting, often third and fourth generation, ice cream shops that endure the test of time.
That is the "how" we decided to franchise. The "why" is more important than the "how."
We have been both blessed and lucky in our careers. Our success is from the talent and hard work of our team. The formation of the Topper's Creamery brand has and will create opportunity for our team members in all of our operational groups as well as our key business partners. We can offer small investments for our current team members that can help provide financial security for them and their families. Every person that is invested in the Topper's Creamery brand is an internal partner, team member, or business relationship that was in place prior to the founding of our Topper's Creamery brand.
Our Topper's Creamery brand will give back to those that helped us and create new relationships with franchisees and brand partners for future opportunities. We are a very loyal group that values our relationships.
How has the company changed since you franchised?
We initially had free-standing, drive-thru locations as our business model. We knew that the non-traditional was an opportunity, but understood that as the next generation of our strategic plan to fill in between our primary brand model. After opening several free-standing locations, we looked at our ROIs and our opportunities. We had an opportunity to open our first non-traditional location at well under half the cost of a free-standing location. We did, and the returns were well above what was planned.
We always had the non-traditional as part of our plan and we engineered an operation that specifically addressed the multi-branding opportunity. We opened a few more; again, getting an attractive return. So the non-traditional offering opened up more quickly than we had originally planned.
Today, while we are still open to developing free-standing full menu locations in key areas. We have found that our short and mid-term priority is best served in the multi-branded addition of Topper's Creamery Express.
What have been the most challenging aspects of franchising?
Identifying the appropriate trade areas for our brand. In terms of traffic patterns and demographics for a new brand, you need to determine exactly who your customers are. Also, it has been necessary to determine if the customer base is a destination brand, as in, "hey, let's get in the car and go up to Topper's," or, an impulse brand, as in, "hey, there's an ice cream shop (Topper's), let's stop and get ice cream."
With our non-traditional brand addition we have created an industry paradigm shift. That's always a long process. Our non-traditional model is a huge hit. We are seeing ROIs that are unprecedented.
Adding a complementary day-part brand is also new. Several have tried to multi-brand with ice cream or frozen yogurt and failed. We believe we have solved the challenge. We understand the business model and how complex it can be. We deliver the "Best Soft Serve Ice Cream on the Planet" in a simple operational way, with high margins for the franchise operator.
What do you look for in a franchisee?
We look for character and integrity, solid work ethic, and a true love for serving the public.
In our current offering of the non-traditional Topper's Express, we look for proven operators that are well-respected both in their community and in their brand.
What is the process of becoming a franchisee for your business?
Our non-traditional offering is in the $20,000 - $25,000 range to add a full non-traditional Topper's Express. We also have our "turn-key" equipment leasing program, where a qualified operator can open a Topper's Express for $5,000.
For our traditional retail Topper's Creamery, initial Franchise Fees are $20,000 for the first Topper's Creamery location and $15,000 for subsequent traditional retail locations. For our non-traditional Topper's Creamery Express, initial franchise fees are $5,000 - $10,000, depending on the menu (full or Express menu). Non-Traditional Express unit royalty fees are 8 percent.
The actual process is as follows:
- When we are contacted by someone interested in our brand, a Franchise Disclosure Document (FDD) is sent to them.
- After the FDD is received, signed, and reviewed - we talk. If there is a fit with the person or group that is interested in our Topper's Creamery brand, we would consider their area of interest.
- If both of us agree, we get the documents signed and move forward.
- Our focus is on training and support of the new operator. We spend a considerable amount of time in the pre-opening process and post opening support of our operators. There is an old saying "train hard to fight easy." We have an excellent training process and our support for our operators is exceptional.
Where do you get most of your advice/do most of your research?
We talk things out with almost everyone inside our operation: GMs, area leaders, and hourly team members. Our primary question that we often ask our team is, "If you owned Topper's, what one thing would you do differently?"
We also read and stay current with multiple publications and information from sources like entrepreneur.com as well as industry trade publications. We network with several key leaders in the industry. About two months ago we hosted a multi-branding summit of CEOs and key executives at one of our multi-branded locations. We had an open discussion on multi-branding and how we can enhance one another's brands. These CEOs represented well over 200 retail locations.
What advice do you have for franchisors and others who want to own their own business?
- Be great operators and focus on execution of the brand at its highest level. Disciplined and consistent operations are the foundation of long term success.
- Have a great deal of passion for whatever you choose to franchise. We love our ice cream.
- Make it about the people – our greatest asset. Whether as team members or franchise operators, we deeply value our relationships with every member of the Topper's Creamery family. Our retention of team members is well above industry standards.
- Be humble. Ego and pride have been the downfall of numerous brands. Listen and learn. If someone tells you something, consider the information as constructive. Ideas and opportunities as feedback, and information outside the current box should be welcomed, not taken personally and defended. Take what fits into your brand and leave the rest, with a sincere appreciation for the information.
What's next for you and your business?
- Complementary Day-Part Branding. Adding our Topper's Creamery Express as a co-brand is a tremendous opportunity in the QSR segment. Anybody can add an ice cream or frozen yogurt machine to an existing operation. It rarely works. We have solved the equation for success in this area with a great proprietary product and simplified operations process that is highly profitable. We have a created a compelling image that is fun and tells a story of the Topper's Creamery Express offering of freshly made waffle cones and ice cream sundaes made your way. Our customers watch us make their fresh waffle cones (the smell of the freshly made waffle cones is incredible), and top their sundaes just the way they like them. This offering format provides added value. It targets families and millennial generation consumers.
- Strategic alliances. We are in discussions with some recognizable brands. There are two types of strategic alliances that we are considering: alliances with major brands and alliances with venues that might include a marketing partnership. These two elements can work together or separately.
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