executive summary

www.menchies.com

executive summary

ABOUT MENCHIE’SMenchie’s – A Compelling BusinessMost Menchie’s frozen yogurt franchise owners began as enthusiastic guests. Intrigued by the smiley guest experience and unparalleled guest loyalty they found at their local Menchie’s store, they looked around the frozen yogurt franchise and found people of all ages drawn to Menchie’s to enjoy the delicious frozen yogurt.

They correctly thought that:• Busy stores mean high sales volumes.• Smiling guests translates into loyal, repeat guests.• Fun work environments attract responsible team members.• Simple business models are easy to learn, manage and grow.

Franchisees see the Menchie’s ‘Mix-Weigh-Pay’ self-service model as simple to operate and that it gives guests exactly what they want while creating a smiley and family-friendly experience in the process. They love the taste of Menchie’s proprietary frozen yogurt and

fresh toppings. They are impressed by Menchie’s yogurt franchise layout, color scheme, branding, energy and vibe. They see

the moneymaking potential and value a Menchie’s adds to their own communities. And, they believe

in our philosophy of making the world a better place through smiles.

Menchie’s franchisees then think about what it would be like to operate one or more yogurt franchise locations. Lastly, they ask themselves a life-changing question, “Why not me?”

Many communities still don’t have a Menchie’s frozen yogurt franchise and are waiting for someone like you to bring one to their area. If you find yourselfasking this life-changing question, please read on to see what it takes to become

a Menchie’s froyo franchise owner so you can start spreading smiles throughout your

community!

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executive summary

MENCHIE’S ADVANTAGEWorld Class Branding and ImagingMenchie’s logo, branding, store layout and design elements, guest experience and media buzz position Menchie’s frozen yogurt franchise as the ultimate powerhouse brand. From the moment a guest walks through the doors, there is no mistaking where they are or the high-quality experience they are about to receive.

Kids love the cute Menchie’s character and his Sweet Friends, as well as the bright store colors, chalkboards for drawing, free giveaways and balloons, and the party room. Adults are drawn to the classic décor, clean store, friendly guest service, and array of mouthwateringyogurtflavorsandfreshtoppings.

High Quality ProductsMenchie’s yogurt franchise is a world leader in ensuring best-in-class products, and considers itself the ambassador of frozen yogurt quality worldwide. Menchie’s ensures that only the highest qualitymilk and flavors are used tomake its frozen yogurt. Thebrand’s exclusive private label collection is made from the milk of “smiley” California cows,whichhavenotbeen treatedwithartificial growthhormones (rBST).Menchie’sfrozen yogurt contains live and active cultures and has received the Live andActiveCulture (LAC) seal indicating itsendorsementby theNational Yogurt Association.

Menchie’s frozen yogurt and ice cream franchise makes guestssmilebyserving100rotatingyogurtflavorsfromcake batter to pomegranate tart to chocolate silk and vanilla snow, and more than 70 rotating toppings including fresh fruits, granolas, nuts, an assortment of high quality candies and hot fudges. At any giventime,12-16flavorsarefeaturedineachfroyofranchise store. By rotating flavors, franchiseesoffer guests an array of unique yogurt mixing opportunities, keeping the guest experience fresh and new with each visit. Menchie’s also offerswafflebowls,whicharemadefreshonsitedaily.

Healthy ChoicesWith many nonfat, low-carb, no sugar added, dairy free, gluten free and vegan swirling options, even thehealthiest eaters can find something toenjoyatMenchie’s.

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executive summary

MENCHIE’S UNIQUE EXPERIENCEConsistently Enjoyable Family ExperienceWhen guests walk into any Menchie’s yogurt franchise location, they’ll notice something distinctly different from other restaurants and retail stores they visit. From the friendly greeting of the Menchie’s team members and the children giggling, to the giveaways, arts & crafts, and endless yogurt mixing opportunities, there is something unique about Menchie’s–atangiblesenseofexcitementandsmilesfilltheair.

Menchie’s frozen yogurt franchise is a neighborhood-gathering place - a place where families and friends of all ages spend quality time together as they enjoy the smiliest cup of yogurt. The self-service model allows guests to actively engage in the total experience. Best of all, by building their own mixes, Menchie’s guests always get the exact taste that they want, as simple, healthy or as creative as their taste buds desire!

Unique Store EnvironmentEach Menchie’s is designed with an all-inclusive goal in mind: to create the best possible guest experience. Menchie’s innovative store layout features a “bubble” in the middle ofthestore,whichservestobothdirectthehighguesttrafficandallowMenchie’steam

members to be close to the guests no matter where they are within thestoresequence.Thisdesigncreatesstaffing

efficienciesandallows the teammembers to fullyinteract and engage with the guests at all times.

The classic Menchie’s yogurt franchise design is complemented by an identifiable blendof colors, textures and materials that work together to provide an inviting, clean and safe guest environment. In addition, Menchie’s comfortable seating areas, party rooms and outdoor patio (someof which contain fire pits) make forgreat social gathering places. The frozen yogurt franchise store design plays an essential role in communicating the best-

in-class brand positioning that Menchie’s promotes.

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executive summary

MENCHIE’S LOCATION ADVANTAGEPrime Retail LocationsAn old food service riddle asks, “What three things does it take to succeed as a food service operation?” The answer? Location, location, location.

Menchie’s solves this riddle by securing locations in highprofile, high-traffic shoppingcenters that cater to families, offering outdoor seating where guests can gather and spend quality time together. More than just a frozen yogurt and ice cream franchise, Menchie’s works with experienced commercial real estate professionals who understand our concept and real estate criteria and will guide franchisees to the right Menchie’s location–onethatmeetsspecificrequirements.Theseprofessionalsalsoassistwithleasereview and negotiations, and this is included in the support you will receive.

Additionally, each new Menchie’s franchisee receives assistance with the entire site selection process, including:

• Yogurt franchise store design• Permitting• Contractor hiring and management• Build out process supervision• Staff education• Grand opening marketing support

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executive summary

MENCHIE’S INDUSTRY ADVANTAGEHigh Growth Segment of a Highly Stable IndustryNinety percent of all American households regularly consume frozen desserts and, in 2008, away-from-home frozen dessert purchases totaled more than $13.9 billion. This year, that numberisexpectedtomorethandoubleto$28billion(MarketingDaily).Bythenumbers,health-conscious Americans prefer healthy frozen yogurt as an alternative to ice cream

as their favorite frozen treat.

Loyal GuestsMenchie’s loyal guests are a broad mix of all

social classes, ethnicities and demographics. From young families searching for fun outings, college students in need of a yogurt break and sport teams celebrating victories, to those seeking a delicious dessert or a memorable way to end the perfect date night, Menchie’s frozen yogurt franchise appeals to people of all ages. Guests make Menchie’s a part of their daily routines – and the smiley Menchie’s experience keeps them coming back again and again.

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executive summary

MENCHIE’S TEAM ADVANTAGEEnthusiastic Team MembersGuests consider Menchie’s to be the friendliest place on Earth, and much of that is attested to the smiley team members working at the yogurt franchise every day who subscribetoandfulfilltheMenchie’smission–tomakeeveryguestsmile!

The team members also ensure that Menchie’s values are met with every guest’s experience. The Menchie’s frozen yogurt franchise values include:

The Menchie’s values include:• Fun/Happiness• Health• Family• Quality• Long-term relationships• Community• Education• Leadership

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executive summary

OUR FRANCHISEESMenchie’s tends to attract three types of franchisees:

The Empire Builder A highly experienced business executive who is interested in growing his portfolio utilizing Menchie’s as an expansion vehicle.

The Diversifying Business OwnerAn experienced entrepreneur seeking a highly expandable growth vehicle to manage and develop.

The Owner/Operator/Family-RunThis individual or family is looking to make a transition from the home or corporate lifestyle in pursuit of an entrepreneurial dream.

All three types of franchisees make welcome additions to the Menchie’s frozen yogurt franchise family.

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executive summary

FINANCIAL REQUIREMENTSFinancial RequirementsA typical Menchie’s franchisee invests approximately $310K, including working capital, to open their Menchie’s yogurt franchise. To be approved for a Small Business Administration (SBA)loan,thetypicalfranchiseeneeds$90Kinliquidassetsandapproximately$350Knet worth. In addition, the franchisee should plan for additional living expenses or possess other sources of income.

Initial InvestmentFurniture, Fixtures, and Equipment – 140KStoreBuild-out/Construction–150KFranchise Fee – 40KMinus Tenant Improvement Allowance – 20K averageTotal Average Cost: $310K

The amount you may invest depends on factors such as the frozen yogurt franchise location, total square footage and landlord’s tenant improvements.

Financing OptionsMenchie’s is on the SBA National Registry. Additionally,

Menchie’sFranchiseDevelopmentManagershaveexperience assisting froyo franchise candidates withothersourcesoffinancingincludinghome

equity lines of credit and self-guided IRAs.

www.menchies.com

executive summary

NEXT STEPSAs you know, business success is often a function of good timing, and Menchie’s time is now. We are looking for experienced and talented franchisees who want to capitalize on this timing by being able to make an investment decision within the next 90 days and open a store within the next twelve months.

OneofMenchie’sFranchiseDevelopmentManagerswillreachouttoyoutoscheduleatimetospeakwithyoutostarttheprocessofdeterminingwhetherornotweeachfitwhat the other is looking for.

In the meantime, we look forward to seeing you mixing it up in our stores.

With smiles,

The Menchie’s Team