A publicly traded company, SWRL
Headquartered in Henderson, Nevada, U-SWIRL, Inc. is on a mission to deliver consumers a smarter alternative to America’s favorite meals and snacks. In October 2008, the Company acquired the worldwide rights to U-SWIRL® Frozen Yogurtand has commenced executing an aggressive strategy to build the brand into a globally recognized chain of highly experiential frozen yogurt cafes.
U-Swirl’s management team and team of advisors have achieved significant success in the development and expansion of various consumer-focused franchise operations over the past four decades. Hank Cartwright, the Company’s Chairman and CEO, was the first to introduce the west coast to Pizza Hut as an area developer, opening stores in Nevada, Arizona and California. In addition to achieving notable success with Pizza Hut and California brand Mom’s Ice Cream, Cartwright also developed Major Video, the first superstore video rental company in the country. Within four years, Major Video had 185 stores operating in 28 states and Canada with another 41 under construction when Cartwright sold the publicly traded company to Blockbuster in 1989. At Healthy Fast Food, Cartwright and his team are now intent on taking advantage of the growing demand for healthier fast food alternatives by focusing on lower-fat foods offering better nutritional content and wholesome, natural food ingredients.
The Company’s business plan provides for growth through corporate-owned stores, as well as through marketing U-SWIRL as a compelling high growth opportunity to franchise operators and entrepreneurial business owners seeking an efficient and profitable store model. The original U-SWIRL franchise was opened in April 2008 in Las Vegas.
In March 2009, Healthy Fast Food, through its wholly owned subsidiary U-SWIRL International, Inc., premiered its first Company-owned U-SWIRL Frozen Yogurt store in Las Vegas. In less than eight months, there were six U-SWIRL stores in operation in the Vegas valley, where customers now flock to choose as many yogurt flavors and toppings as they like, and then pay by the ounce for their unique creations.
With its seventh store in Vegas currently under construction and franchise stores operating or in development in Reno, Nevada and Phoenix, Arizona, U-Swirl is making fast progress in executing a series of complementary business strategies designed to rapidly establish the brand as an industry leader in the successful development and operation of frozen yogurt stores. Factors that support management’s belief that they will indeed succeed include sweeping consumer demand for quality, nutritional frozen desserts matched by overwhelmingly positive consumer reaction to the U-SWIRL self-serve concept. Moreover, given the management team’s proven industry expertise and impressive track record for building brands, successful franchise systems and profitable consumer-facing retail chains, U-Swirl expects to serve up strong fundamental growth and true long term value for all of its fellow shareholders.
The U-SWIRL Frozen Yogurt® Concept and Commitment to Quality
Featuring the tag line Worth the Weight®, U-SWIRL allows guests the ultimate choice in frozen yogurt by providing up to 20 non-fat flavors, including tart, traditional and no-sugar options; and more than 60 toppings, including seasonal fresh fruit, sauces, candy and granola. Guests serve themselves and pay per ounce instead of by the cup size.
A healthier alternative to a coffeehouse hang-out, U-SWIRL endeavors to create a relaxing, social environment ideally suited for every member of the family, where they can indulge themselves while eating responsibly. U-SWIRL will even help plan and play host to children’s birthday parties and other special occasions.
“These groovy frozen yogurts are small luxuries at a time folks can’t afford big luxuries,” says Howard Waxman, publisher of the Ice Cream Reporter newsletter. “They’re not selling frozen yogurt. They’re selling the experience.”
Under the U-SWIRL system, each store must conform to a standard of interior design, featuring distinctive and comfortable décor. All goods sold by franchisees must be purchased through U-SWIRL or U-SWIRL-approved suppliers that have met with the Company’s strict, high quality specifications and standards. Further, the yogurt sold in U-SWIRL stores must meet the criteria established by the National Yogurt Association for live and active culture yogurt.
Offering the Frozen Yogurt Industry’s Lowest
Initial Franchise and Royalty Fees
Unlike competing frozen yogurt franchise systems that charge an initial franchise fee of up to $50,000 for a single unit, U-SWIRL franchisees pay only $15,000.The Company’sarea development agreements also provide for much more attractive investment terms than most all of its competitors, equaling just $25,000 plus $5,000 times the predetermined minimum number of stores required to be opened in each specific geographic market. Perhaps the most telling demonstration of U-SWIRL’s commitment to support win-win partnerships with its franchisees is its low royalty fees. Almost without exception, each of U-SWIRL’s fro-yo franchising competitors receives a 6% royalty fee on weekly net sales. Not U-SWIRL. U-SWIRL’s royalty fee is only 5% , thus offering potential franchise partners and area developers a compelling business opportunity that is currently unmatched.
U.S. Expansion Underway
In a news announcement released in late July 2009, Healthy Fast Food reported that it had entered into a franchise agreement with Galena Frozen Yogurt Company, which over the next 12 months plans to open three U-SWIRL Frozen Yogurt stores in Reno – North Nevada’s largest city and one of America’s most popular tourist destinations; and at least one U-SWIRL store in Northern California. Galena’s first U-SWIRL opened this past November in a highly trafficked shopping district located in southern Reno, with the second store expected to follow in northern Reno in the spring of this year. With a goal of aggressively expanding its chain of U-SWIRL franchise locations over the next five years, with concentration in the northwestern U.S., Galena is actively scouting commercial real estate for new U-SWIRL locations in Reno and its surrounding communities, as well as in Sacramento.
In November, the Company awarded franchise area development rights to a multi-concept franchise system operator based in Phoenix, Arizona, providing for a minimum of 18 U-SWIRL self-serve frozen yogurt stores to be opened in the Phoenix market over the next five years. Rico Conte, Healthy Fast Food’s Vice President of Franchising, noted, “Expanding into Phoenix represents an important step in our efforts to ultimately establish U-SWIRL as the nation’s preferred destination for quality, great-tasting frozen yogurt. We’re very pleased with the brisk pace at which we are rolling out our unique self-serve concept and with the tremendous attention our profitable franchising model is winning within the food service arena.”
Continuing, he said, “With seven stores in full operation in Nevada, additional Company-owned locations in development, franchise agreements in place for 20 new stores, and discussions advancing with several new potential area development partners in key target markets around the country, U-SWIRL is fast transforming from what was a single concept store just one year ago to an emerging national retail brand and noted industry leader.”
Strong Profitable Performance
From a financial perspective, Healthy Fast Food is demonstrating that its strategy to support the national roll-out of U-SWIRL Frozen Yogurt stores is indeed right on the mark. With five corporate-owned stores in operation as of the end of the third quarter (September 30, 2009) – but with only two of them in full operation for the full 90 day reporting period – the Company’s subsidiary U-SWIRL International posted $530,000 in total third quarter revenues and $125,000 in operating income. Total revenues for the first nine months of 2009 totaled $926,000 with an operating profit of $239,000. According to Chairman and CEO Hank Cartwright, “U-SWIRL’s financial performance is indeed supporting that our business model is sound and incredibly lucrative. Each of our stores has fast attracted a league of devoted and loyal customers, who are returning time and time again with friends and family members to enjoy unique dessert creations and the overall U-SWIRL experience.”
“Simply Irresistible Business Opportunity” and Among “Most Popular Franchise Trends”
In an article posted to US News and World Report in January of this year titled Franchising Hot Spots, it was noted that “Not only is it delicious, but frozen yogurt is also turning out to be a simply irresistible business opportunity.”
Further, FranchisingForWomen.com listed “Fun Food” among the “8 Most Popular Franchise Trends in the Year 2009.” The report noted, “Crazy food franchises have grown a lot trendier over the past year…By offering something different than the normal fast food-like menu, these businesses can reach out to crowds that are tired of unhealthy, processed foods. Additionally, by letting consumers create their dishes, such as yogurt shops that let you create your own custom dessert, they can connect with customers on a more creative level.”
The franchise-savvy management team at Healthy Fast Food believes that they can rapidly establish the Company as an industry leader in the successful development and operation of “fro-yo” stores. Factors that support their belief include sweeping consumer demand for quality frozen desserts matched by overwhelmingly positive consumer reaction to the U-SWIRL concept. Moreover, given management’s proven industry expertise and impressive track record for building brands, successful franchise systems and profitable consumer-facing retail chains, Healthy Fast Food expects to serve up strong fundamental growth and true long term value for its valued shareholders.
Compelling Market Growth on Tap
With two-thirds of all Americans characterized as overweight or obese, healthier dessert and snack choices have exploded in popularity. Market research publishing firm Packaged Facts contends that the frozen dessert market in the U.S. is expected to grow to more than $27.6 billion by 2012 with frozen yogurt being one of the fastest growing segments.
Concurring with Packaged Facts is Mintel, a leading global supplier of consumer, product and media intelligence, who forecasts that the market for ice cream, frozen novelties, sherbet and frozen yogurt through all retail channels will grow 15% from 2008 to 2012. “Convenience and healthy eating trends drive more people to frozen novelties to satisfy cravings,” commented senior Mintel analyst David Morris. “With today’s health-conscious consumer looking for a balance between nutrition and indulgence, options such as light, portion controlled ice cream bars or lower calorie frozen yogurt are sure to resonate.”