QSR January 2023



Milkman. Hershman and Duncan plan to grow 16 Handles beyond the Tri-State market via franchising—despite talk of the concept being a dying fad. “I think those articles are really funny. If it’s just a trend, why have we been writing about it for 20 years?” Her shman says. “At some point it gets a lot of media and people think it’s really popular, and then stops getting so much media because of the media cycle, but stores stay as is,” he adds. “A lot of stores at 16 Handles comp up every year. People say fro-yo is dying, but yet we have more customers coming in and more loyal customers returning. It’s just not true.” Since Gen Z is a target demographic for 16 Handles, the ownership duo will leverage Duncan’s audience—70 percent of which ranges between ages 18 and 34—to gen erate more buzz. “He’s been a big help in f iguring out how to target that audience, because if you win it, they’ll come in with their families as well. It’s a great sell,” Her shman says. On the franchise sales side, Hershman is targeting multi-unit operators by selling discounted packs of three stores, and noted the brand is focusing on markets in Florida and Texas next. The self-serve model saves money on labor costs, and rising average unit volumes with a 550-1,200 square foot print helps attract new owners. Plus, improved technology lessens the burden on franchisees f inding real estate. Historically, fro-yo shops used to be less desirable since they required water lines, high-voltage electricity, and other custom ization for the frozen yogurt machines. “Tech has caught up, and having direct drive machines is going to be much more efficient,” he says, so franchisees can build in any space. So while many trends tend to be cycli cal, the healthier ice cream alternative looks like it’s here to stay—at least, from Yoon’s and Hershman’s perspective. “Millennials love the brand in New York, so we’ll keep playing to that,” Hershman adds. “For them, they grew up with frozen yogurt always being available, so to have a cool, clean kind of modern, sleek store to go to that sells frozen yogurt, versus kind of a dingy local shop, is a nice benefit.” q

formulation, testing, refinement, and roll out—takes about nine months. A f lavor recipe will often undergo about 25 rendi tions before being released to the market, Yoon says. Planning back-up solutions ahead of time for any supply chain challenges, plus developing strong relationships with ven dor partners, allows the brand to continue meeting the expectations of their guests. Strategic partnerships are key for any brand trying to stay relevant. Yogurtland, for example, spiced things up in 2019 when it teamed up with Cheetos Flamin’ Hot to offer a new topping for a “sweet and spicy combination,” which paired with a special kickoff event at a California mall where fans could meet Chester Cheetah. Yogurtland also collaborated with Sour Patch Kids in August to launch a limited-time Water melon Sorbet frozen yogurt, marketed as “the perfect back-to-school treat.” The purpose? “Creating that buzz and excitement, and bringing fans of those brands and exciting our customers to come into our stores,” Yoon says. “At the same time, it’s an opportunity for our f lavorolo gists to use this occasion to craft amazing, creative, new frozen yogurt f lavors.” While Yogurtland creates its own vegan f lavors using an oat milk base, such as Plant-Based Brown Sugar Vanilla, New York-based fro-yo shop 16 Handles has an exclusive partnership with big-name oatmilk brand, Oatly—which means non-dairy f la vors like Marshmallow and S’mores f lavors in the summer and pumpkin spice in the fall. 16 Handles—named for having 16 rotat ing soft-serve f lavors—was founded in 2008 by Solomon Choi in Manhattan’s East Vil lage, and has since grown to 30 stores across five states. The company claims to be the f irst self-serve frozen yogurt shop in New York City, and sets itself apart with a mod ern store design, exclusive product lineups, and integrating mobile app-based loyalty and ordering technology. 16 Handles was recently acquired by its largest franchisee, Neil Hershman, and investor Danny Duncan, who boasts nearly 7 million YouTube subscribers. At 27 years old, Hershman is now CEO of 16 Handles and has built an $8 million dessert portfo lio, including seven 16 Handles and other treat franchise stores such as Dippin’ Dots/ Doc Popcorn and Captain Cookie & The

their existing kitchen, don’t need to invest any new capital, and Franklin Junction serves as the licensee, owning the sales, the listing, driving the promotions, and doing the accounting. The company pro vides “the tools for existing restaurants to optimize their infrastructure to capture incremental digital business, primarily takeout and delivery,” Nigam says. Frank lin Junction operates more than 1,000 restaurants domestically and over 500 internationally. It focuses more on established brands, such as Hooters, Nathan’s and Arthur Treacher’s Fish & Chips. “That ensures greater likelihood of consumer-demand,” Nigam says. It has partnered with early stage restaurants on select occasions as well. Frisch’s Big Boy was one of Franklin Junction’s earliest partners. The host kitch ens helped it forge into new areas and broaden exposure. In regard to how the post-pandemic rise of dining affected rev enue, Nigam says, “There’s a lot happening in the industry now including relaxing of pandemic restrictions and inf lation, but we see the convenience of digital ordering, delivery and pick-up to be long-term shifts.” But it’s not only larger companies open ing ghost kitchens. Take Cowboy Chicken, a fast casual of 18 locations ( seven of which are company-owned ), specializing in wood fired rotisserie chicken. In November 2020, when the pandemic was still at its apex, it debuted a spin-off, Smackbird, as a ghost kitchen, to generate a new revenue stream. It’s now available at four Cowboy Chickens. “We could utilize extra kitchen capac ity and capitalize on growing interest in the Nashville hot-chicken style menu,” says Sean Kennedy, president of Cow boy Chicken. It devised a different menu consisting of $10 chicken sandwiches, chicken tender meals, family packs, and side dishes such as mac n’ cheese “to appeal to a younger, more adventurous demo graphic than Cowboy Chicken,” he adds. Kennedy acknowledges as the pandemic lightened, revenue dipped. “But we are con f ident that we can continue to grow sales in digital channels,” he says. To optimize sales, the brand is extending visibility on third-party platforms, continuing a strong social media campaign, and working with Yelp and Google to build awareness.” q

Callie Evergreen is a Senior Editor at QSR . She can be reached at cevergreen@wtwhmedia.com .

GaryStern is a regular contributor to QSR and is based inNewYorkCity.


JANUARY 2023 | QSR | www.qsrmagazine.com

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