Americans have never been good about getting their daily dose of fruit and fiber in their diet, and our fast food culture is one of the reasons why. Meeting that need is the Jamba Juice franchise chain. Founded in 1990 by Cal Poly alum Kirk Perron as Juice Club, the chain of restaurants exploded onto the market, expanding rapidly through California, and renaming itself Jamba Juice in 1995. In the subsequent decade, Jamba Juice franchises have grown to cover over 640 locations across the country, as an upscale product vendor specializing in fruit and vegetable smoothies, juices and other healthful snacks.
Jamba Juice”s franchise business opportunities are tied heavily into local events, and the model has grown in much the same way that Starbucks franchises have. Like Starbucks, Jamba Juice franchise shops aim to give their customers a “cultural buy-in”, trying to market an entire experience, rather than just a commodity product. In the words of Kirk Perron, this culture is the key to the expansion of the business.
Tied into that cultural buy-in, Jamba Juice exerts a lot of influence on behalf of its franchise holders, helping them secure deals for all natural products from Whole Foods Market and other vendors; this makes it easier to sell to more environmentally and health conscious American consumers.
Since its acquisition by Services Acquisition Group, which renamed itself Jamba, Inc., after the acquisition, Jamba”s expansion has been primarily driven by corporate owned stores. While franchise opportunities are still available, of late, the Jamba Juice company has been buying franchise stores from franchisees. This makes an excellent investment opportunity for business groups looking to start a Jamba Juice franchise, expand it, and sell it. At this point, single proprietor Jamba Juice franchises are difficult to come by.
The year-over-year growth of Jamba Juice as an entity is impressive; in 2006, it gave a return on investment of nearly 20%, annualized, with much of that growth in block Jamba Juice franchise businesses, owned by companies specializing in franchise restaurants in hotels, shopping centers and airports. While this growth is impressive, keep in mind that Jamba Juice business franchises are being acquired by the company. The brand and store roll out is likely to hit market saturation soon. At the current rate of expansion, current investor estimates place market saturation as hitting in 2010, and possibly sooner.
Once the market hits saturation, the usual cycle of franchise restaurants will take place: the corporation will divest itself of Jamba Juice franchises in rural areas, selling them on to local franchisees, while focusing on the high profit urban stores for its main line products. While the time may not be right to buy a single-proprietor Jamba Juice franchise at present, the opportunity will exist in the future.
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