Jamba Juice 2009 Annual Report Download - page 10

Table of Contents
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Our market planning and site selection process is integral to the successful execution of our growth strategy. We have processes for identifying,
analyzing, and assigning undeveloped markets for either Company Store or Franchise Store development. Once a market is selected, we carefully screen trade
areas for demand based on demographic, psychographic and Jamba Juice specific variables to assess the risk of developing a store. We select trade areas that
meet our guidelines for new store development and begin the site selection process. Once a trade area is selected, we carefully screen prospective locations for
visibility, traffic patterns, ease-of-use and co-tenancy for potential Company Store and Franchise Store locations. Our expansion strategy involves using this
market planning and site selection process to leverage areas of demand within each market. We use this approach to cluster stores in specific geographic areas
of demand, which will drive brand awareness, improve operating and marketing efficiencies while leveraging the costs associated with regional supervision.
Distribution efficiencies are also captured through this strategy. In addition, we believe our ability to hire qualified team members is enhanced in markets
where we are well known.
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We believe there is untapped potential to extend the Jamba brand into the retail market. In December 2007, we announced that Nestlé USA had entered
into a worldwide license agreement for the manufacturing, marketing and distribution of Jamba ready-to-drink beverages. In May 2008, Nestlé launched a
Jamba ready-to-drink product line including six SKUs: three Jamba Smoothies, named Strawberries Wild w/Energy Boost, Orange Dream Machine
w/Immunity, Banana Berry w/Heart Healthy Boost; and, three Jamba Juicies named Orange Strawberry Banana w/Protein Boost, Mango Orange Peach
w/Fiber Boost and Very Berry w/Calcium Boost. The Jamba Smoothies and Jamba Juicies were available in major grocery retailers and convenience stores in
eight Western states: California, Oregon, Utah, Nevada, Arizona, Idaho, Washington and Colorado. In December 2008, Nestlé voluntarily suspended
production and shipments of the Jamba ready-to-drink beverages due to production issues. We believe Nestlé is fully committed to re-launching a Jamba ready-
to-drink beverage proposition.
We continue to have discussions with potential partners regarding fruit teas, fruit yogurt and parfaits, frozen smoothie bars and sorbets, breakfast and
energy bars and packaged boosts. Our goal is to extend our product offerings outside of our Jamba Juice stores to not only generate revenue, but also to expand
the brand accessibility and product usage occasions available to consumers. To support and optimize this extension, we intend to structure these partnership
relationships in various ways, such as, for example, licensing agreements, joint venture agreements, co-packing agreements, and sales and distribution
agreements.
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This strategic priority involves all aspects of the organization to improve store-level profitability and returns. The plan is focused on a number of
initiatives, including reductions in costs of goods sold, labor savings from operational simplification, improved wage and benefit management, the
implementation of a labor planning system, rent and occupancy savings, improved management of controllable costs related to better cost controls and
processes and the negotiation of service contracts and more effective and efficient brand communication. We expect our general and administrative expenses to
continue to decrease as we implement the strategic initiatives described above and continue to improve our processes and systems.
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Our Operations team is the foundation for our performance and vital to long-term growth. We recruit and retain leaders with broad experience in
management and our industry.
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