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SMOOTH OPERATOR

TRENDY, CALIFORNIA-BASED JUICE IT UP PLANS TO OPEN 50 STORES PER YEAR

?By Neil Janowitz

Juice It Up has been around since the very beginnings of the fast-growing juice bar business. And the Irvine, Calif.–based chain is enjoying some pretty juicy raves of its own, from some quarters.

“Juice It Up is one of the major players, and for good reason: They’ve always been on the cutting edge with regard to finding out what’s trendy in the industry,” said Dan Titus, president of Juice Gallery Multimedia, a Chino Hills, Calif.–based restaurant consulting firm. (The firm has a business relationship with Juice It Up.) “They have a very potent grass-roots approach to their research and marketing. And of course, their products are very good.”

David Grossman, director of restaurant leasing at General Growth Properties, shares the sentiment. “The sales are strong, the stores look good,” Grossman said. “They simply do a great job. In a category with lots of competition, they stand out.”

Larry Sidoti loves those sweet, sweet strains — no less because when he helped launch Juice It Up, there was not “lots of competition.” A bored ad man back in 1994, Sidoti did a little research and discovered some enticing things: first, that the juice bar business was bursting with potential; second, that the concept was relatively simple in nature; and third, that the field was devoid of established players.

Bingo.

After roping in a few partners, Sidoti opened a store in Brea, Calif., in February 1995. Since then, the company has seen enviable growth. It has 142 stores at present, and last year chainwide sales jumped 38 percent over the previous year. The menu ranges from straightforward smoothies, shakes and fresh-squeezed juice drinks to exotic touches such as wheatgrass and uber-trendy acaí, as well as organic coffee, tea and similar staples. Predictably, a diverse and dedicated mix of customers has followed.

“The concept has always been driven heavily by women,” said Sidoti, who is, in his current role as vice president of business development, the only remaining founder. “They tend not to want to eat as much as men, and Juice It Up appeals to light eaters.” Sidoti says the most frequent customers are women between 18 and 34, followed by men of the same age range and lots of teen-agers. This means, of course, that the primary demographic comprises young, trendy consumers with plenty of disposable income and a keen interest in staying fit.

That considered, Sidoti has plans in place to begin accelerated growth over the next few years. He says he expects to have 160 stores in operation in seven states by year-end. From there he is projecting growth of about 50 stores per year, the vast majority of which will be franchised. (Juice It Up currently operates three company-owned stores, and Sidoti says the company may open more over time.)

Prospective franchisees can expect to pay a $25,000 fee per store. Sidoti looks for industry experience and financial strength in a candidate. In turn, a franchisee can look forward to a close working relationship with the parent company. Right off the bat, Juice It Up helps its new partners find suitable locations. The chain seeks out spaces measuring between 900 and 1,300 square feet, in high-traffic, entertainment-driven power or community centers with proximity to high schools, colleges or health clubs. Owing to the company’s prominence in California, locations in that state need not be in especially high-profile areas, Sidoti says. Elsewhere, though, locations near a strong anchor are best, and Target, Wal-Mart and movie theaters are particularly effective, he says. When operating at its peak, a Juice It Up store can generate up to $350 per square foot, Sidoti says.

Once the site is selected, the company helps negotiate the rent and such. The corporate office will continue to offer assistance with technical problems and marketing. This tight-knit support system impressed Grossman.

“Juice It Up has a cult following in California, which is how we came to learn of them,” Grossman said. “And right now those types of restaurants are a sure bet — all juice places are performing well. People want to snack healthier, and this offers a frozen-dessert-like taste without the fat. But what sticks out about Juice It Up is how great a job they do selecting and training their franchisees.”

Titus agrees that the Juice It Up approach to franchising is remarkably well conceived. “A few years back they came up with the great idea to template their stores,” Titus said. “Everything is very modular, which helps franchisees save a ton of money on build-out costs.”

Titus also commends the company for its prudence regarding growth. “They haven’t been overly gung-ho,” he said. “Their stance is responsible growth. Forty to 50 stores is a great target. My only question is if they’ll be able to find the space in the markets they want. The juice industry is getting saturated very quickly, and they’re really going to have to work to get the prime locations.”

Such is the problem facing Chris Davison right now. He owns a Juice It Up franchise in El Dorado Hills, Calif., and says the reaction has been so positive that he has already begun scouting out a second site. “As soon as I can find the right spot, I’ll get the ball rolling for my second store,” Davison said. “Our product really is the best out there. I routinely have customers tell me that we offer the best smoothies they’ve ever had. It keeps getting better, too. For some reason, it seems that as our competitors expand they get worse and worse, whereas we just keep improving.”

Davison says he was attracted to Juice It Up because of the lifestyle of the typical customer: health-conscious, active and busy. And though it took almost a year for the store to get going after its June 2004 opening, customers soon stopped going anywhere else, he says. “People really like the freshness of our product and that we do a lot of freshly squeezed stuff,” Davison said. “But mainly, our patrons just like both the taste and nutritional value better than most competitors, and we’re priced perfectly.”

Sure, powerhouse Jamba Juice may have some 640 stores across the country. And Robeks and Smoothie King may be close behind. But store numbers may indicate mere quantity, Titus says, and it is quality that Juice It Up is counting on to make it a formidable contender.