Jamba Juice 2009 Annual Report Download - page 7

Table of Contents
Our research and development team continually seeks to enhance the product offerings available to customers, and where possible, reduce product and
labor costs. Our research and development process includes both the development of new products and the optimization of the menu to ensure only the most
appealing products are offered to customers. As new products are introduced to the menu, usage occasions increase and positive word-of-mouth is spread. We
are passionate about creating fresh new products that meet an even greater variety of customer needs. We pride ourselves on listening carefully to customer
feedback. We continue to devote significant resources to our research and development team in an effort to build upon recent new product successes and take
our product innovation abilities to the next level. This combination of optimizing existing products and expanding our menu with offerings that are relevant to
our customers’ needs provides increased opportunities for both increased frequency and increased average check. While there is no certainty that product
development efforts will lead to the introduction and success of new product offerings as well as a potential increase in operating margins, we will continue to
use these resources to try to develop fresh concepts that appeal to customers at any time of day and in any weather or season.
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A primary goal of the Company is to build accessibility, meaning making it easier for customers to experience Jamba. One way to increase accessibility
is to expand the number of Jamba Juice stores. The goal of building accessibility is increasing frequency and, as a result, comparable store sales and average
unit volumes. At the same time, we understand that the foundation for growth lies in strong store-level economics. Accordingly, part of our growth strategy is to
ensure that we, and our franchisees, achieve target metrics in terms of average unit volume, store level cash flow, store level cash flow margin, net cost per unit
and cash-on-cash returns.
We believe we have significant market expansion opportunities both nationally and internationally. Our research and planning have shown that there is
potential for at least 2,000 additional Jamba Juice stores in the United States which we believe could be profitable and would meet our new store opening
criteria.
We have grown our concept and brand through company owned and operated stores (“Company Stores”) and franchise store locations (“Franchise
Stores”). As of December 30, 2008, there were 729 Jamba Juice locations consisting of 511 Company Stores and 218 Franchise Stores operating in 21 states
and the Bahamas. Except for the single Bahamas franchise location we have no other international locations. Of the 729 locations, 388 stores are located in
California, of which 338 are Company Stores. We lease the real estate for all of our Company Stores.
We generally characterize our stores as either “traditional” or “non-traditional” locations. Traditional locations are characterized as a business premise
that exists primarily as a Jamba Juice store. Traditional stores currently average approximately 1,400 square feet in size and are designed to be fun, friendly,
energetic and colorful to represent the active, healthy lifestyle that we promote. These stores are located either in major urban centers or in suburban strip mall
centers. As of December 30, 2008, there were 610 traditional Jamba Juice store locations.
Non-traditional locations are characterized as a Jamba Juice store located within another primary business in conjunction with other businesses or at
institutional settings such as colleges and universities, schools, shopping malls, supermarkets and airports. A “captive” audience is a common characteristic
of non-traditional locations. We believe one benefit of the development of non-traditional stores is to generate awareness to complement the traditional stores in
the area. As of December 30, 2008, there were 119 non-traditional Jamba Juice store locations.
All Jamba Juice stores are designed to provide a highly interactive Jamba experience to build our customer relationship, including the enticing aroma of
fresh fruit, vegetables and wheatgrass, the high-energy sounds of
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