Jamba Juice 2014 Annual Report Download - page 8

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During 2014, we announced a franchise incentive program designed to accelerate our growth and our transition to an asset-light business model by
attracting a large number of interested and capable operators in both new and existing markets. We believe this program will help our efforts to double our
domestic store openings rate to over 10% per year.
We continue to innovate in the design of traditional and non-traditional stores. Our goal is to vary the size and format of our stores to allow us to locate
them in or near a variety of settings. Our flexibility in store construction enables us to develop stores in a wide range of venues, broadening the visibility of
the Jamba brand and giving more customers easier, more convenient access. We believe format flexibility will help us to attract qualified franchisees and
assure them of potentially achieving a higher return on their investment in capital expenditures. In 2014, we expanded on a significant refresh and remodel of
our Company Stores in order to provide a contemporary and fresh experience for our customers. We completed 146 store refreshes, which included upgrading
the stores’ facilities to effectively and efficiently serve our blended whole food and premium juice platforms.
The Jamba Smoothie Station concept was launched in 2012. This concept is an express service utilizing existing technology to make select smoothie
flavors in small, efficient spaces. The Smoothie Station concept is designed to target venues that require a smaller footprint than our historical, non-
traditional store. Smoothie Stations offer a limited menu and use pre-portioned fruit and other ingredients to produce smoothies comparable to our traditional
stores. Targeted venues include colleges and universities, grocery stores, airports, hospitals and business cafeterias. As of December 30, 2014, there were 39
Jamba Smoothie Stations open in 20 states. Jamba Smoothie Stations fall within the non-traditional store category and are included in the total Franchise
Stores count.
The JambaGO® concept, which we developed in 2012, targets venues servicing captive audiences. The JambaGO format is a small footprint, low-capital
and low-labor, self-serve machine format, and has proven to be an innovative and differentiated solution for food service providers seeking healthier
beverage options for their constituents. The typical venue for a JambaGO unit has a significant demand for high volumes, requires high-speed service, where
a full-sized Jamba Juice store or kiosk would not be feasible. Such venues include retail store cafés or restaurants, K-12 schools, colleges and universities,
grocery and convenience stores, stadiums, theaters, event centers and select airport locations. The JambaGO format has been enabling Jamba to rapidly
expand brand presence. During 2013, we launched JambaGO units at over 1,000 café locations in Target Stores in the United States. The number of JambaGO
units in operation at December 30, 2014 was approaching 2,000.
As of December 30, 2014, we had 806 Jamba Juice store locations in the United States, operating in 34 states and Washington, D.C., consisting of 263
Company Stores and 543 Franchise Stores. We lease the real estate for all of our Company Stores. Our market planning has shown that there is potential for a
total of at least 2,700 Jamba Juice stores in the United States which would meet our current store opening criteria. During fiscal 2014, we opened 43 new
Franchise Stores, closed 33 Franchise Stores, reacquired 26 Franchise Stores that are currently operated as Company Stores, and refranchised 18 Company
Stores. In November 2014, we announced an accelerated refranchising initiative that includes the sale of up to 114 company stores in the California market.
Once completed, we will be at greater than 80% franchise stores. We expect this initiative to be completed during the second quarter of 2015.
Franchise Opportunity
Through our franchising program, we offer franchisees choices in store location, format and number of stores they wish to operate including (i) traditional
“stand alone” stores, (ii) non-traditional store venues such as mall, university, supermarket or transit hub locations; and (iii) multi-unit development
agreements which grant the franchisee exclusive rights to develop and operate a specified number of stores within a specified period of time and geographic
area.
As of December 30, 2014, we had 30 development agreements that contain rights to develop additional Franchise Stores. The exclusive territories
covered by these agreements include selected markets in the states of Arizona, California, Colorado, Connecticut, the District of Columbia, Florida, Hawaii,
Kansas, Louisiana, Missouri, Nevada, New York, North Carolina, Oregon, Pennsylvania, Tennessee, Utah, Washington State, and Wisconsin. Seventeen of the
30 development agreements were entered in connection with refranchising transactions, where a purchaser of Company Stores also commits to develop new
Franchise Stores.
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