Next Chapter.
After my sub par experience with mystery meat at Tito’s Taco’s, my taste buds deserved some reward to wash away the grease still swirling around my taste buds. Driving through traffic, I cautiously looked around on the L.A. freeway. Wanted to be celebrity struck, I looked around like a tiger preying on a deer for dinner. On my way to the Grove, a fancy strip of malls contrasted with a delightful farmer’s market. (side note: I ran into Brian Austin Green from 91210 my last trip at the Apple Store)
Hip hopping towards the farmers market, I find the Pinkberry.

Food.
Pinkberry started the frozen yogurt craze. Flavors include original, green tea, and coffee. With my puppy eyes, I uttered in my manly voice, “original flavor, small, mango topping.” I sounded like a little girl walking for the first time into a candy shop. After all, Pinkberry has become folklore in the dessert community. My first virgin taste transported my taste buds back to Citrus Zone.
Immediately, my taste buds gravitated towards the tart and citrus taste heightened by crunchy sweet mangoes. The taste: DAMM refreshing. In culinary terms, it just cleanses the palate.

Consultant hat.
The obvious, Pinkberry is more than just frozen yogurt. It’s now a cultural icon in the metropolitan cities. Leonardo DiCaprio eats here causing a buzz. Although rare amongst Asian establishment, Pinkberry is well decorated. The design is minimalistic, meaning clean design so that the FroYo remains center stage. The modern decorated walls, lights, and designer menu is not only easy on the eyes, but matches the product.

As I mentioned in my About page, I was previously a franchise marketing manager. I helped convert mom ‘n pops into a franchise program.

Lets play “Build a Pinkberry Copycat”

Food cost.
What it takes to make the food. A good food cost ranges from 25%-32% for restaurants. Frozen yogurt is mostly water, toppings, and yogurt itself. Pinkberry’s food cost is probably around 10%. So every $5 FroYo, the food cost is about $.50. Wait, there’s more.
Plate cost.
What it cost to serve the food. (plastic spoon + napkins + FroYo cup) = plate cost. Prices decrease as volume increase.
Rent.
If you don’t make up your rent in 3 days of business or less, start pulling out your hair. The Pinkberry at Farmer’s market is around 500 sq. feet and may cost $5000. You better make around $1666.66 daily ($5000/3) so that your ASS don’t get fried.
Construction.
Materials,labor,architects + enginneers, designer, can easliy amount to a few hundred thousands
Labor.
They probably hire mostly students and pay them around $9 bucks an hour, managers a little more.
Workers compensation.
This is required in California. Basically, it’s insurance for your workers. What if Jon slips on a mango topping and breaks his back. Workers compensation is insurance. Start adding a few thousand dollars to your yearly account statement.
Marketing.
I advise restaurants to speand 10% of their revenue on marketing. Don’t waste money on print advertising, it does not work. If it did, everyone restaurant owner would just take out an add in the Los Angeles times. Instead, food reviews that tell a story work. If you have the money, hire a restaurant publicist. If you don’t have the money, let the owner be the face of the business and have a story. “After going to culinary school in Japan, Jon immigrated to the United state with only $15 and a G.I. Joe figure, now he is a millionaire.” Shelly Huang, entrepreneur super star behind Pinkberry, promotes her stores with a co-branding commerical with American Express Plum card, a credit card for small business owners. Smart.
POS.
Point of Sales. This is the “high tech” cashier machines behind the counter. It not only takes orders, but most are internet connected so that you can be drinking your Pina Colada in Hawaii as the business owner, and get up-to-date sales reports via the internet on your laptop. These systems can easily cost $5000 for a basic one. Negotiate for lower prices as you increase store numbers. They also can print our reports such as item totals. Coffee flavor outsold tea flavor by $2000, for example. Reports help you detect trends.
City planning.
To build a restaurant, you need to go to the city planning department. Hire an architect to design your plans and submit them. Remember to hire specialized architect who have built restaurants before. When I was a marketing manager for Ohana Hawaiian BBQ, we had secured a spot in the grass root mom’ n pops Mission district in San Francisco. Neighbors protested trying to oust our fast food chain, claiming obesity concerns. Also, multi unit chains such as McDonalds may not locate in certain historic zones. Just a word of caution, know your city planning rules. Despite having charming looks and a law degree, Yul Kwon (Survivor Winner-Cook Island) had investment in Red Mango, a popular Korean Fro Yo chain. They were prohibited from opening in North Beach area since they are a chain restaurant. (News article)
Investments.
Before you try renting a place, you have to have good credit and cash in your account. The property manager wants to lease it to someone who can pay the bills. Don’t be surprised to sign 10 year leases.
Why own one?
After all the listed costs, potential management problems, why do people want to own restaurants. Its obvious. Money! Whether in an up or down economy, we like to eat out. You have a hot date named Rachel, she has long legs, luscious lips, and an appetite for good food. If you can’t cook, its better leaving it to the trained experts. For a human behavioral standpoint, we need to socialize, restaurants provide this space. If you ran a restaurant well, you may have a cash cow in your hands.