Profitability and Startup Costs
A frozen yogurt business is generally profitable. To determine profitability, you should earn more than your expenses within months. By maintaining a record of monthly expenses and income, you can see if any changes or adjustments need to be made. Seasonal fluctuations in demand could affect profitability. Business owners should remain aware and take measures to counteract them. Differentiation is key to success against competitors and maximizing profits.
The average startup cost is $13,936, with a minimum of $12 and a maximum of $27,209. The average franchise fee is $35,000, and total investment often exceeds $100,000. The number of years in business also impacts profitability. In your first fiscal year, you might make $120,000, and in your second fiscal year, potentially more.
Case Study and Market Research
Menchie’s, with over 540 locations worldwide, has found success by offering a wide variety of flavors and using marketing to keep customers engaged. Thorough market research before starting any business is crucial. It provides information about your target customers and helps turn them into regulars.
Target Market and Market Potential
Who is the target market for frozen yogurt? This segment includes people who love ice cream as there is often a large overlap between these markets. The global frozen yogurt market is expected to reach a valuation of USD 2.1 billion by the year 2022, accelerating with a CAGR of 3.7% from 2022 to 2032.
Market Projections:
- The North American market is expected to dominate globally.
- The market size was USD 1.63 billion in 2020 and is projected to grow to USD 2.14 billion in 2028 at a CAGR of 3.5%.
- Data Bridge Market Research analyses that the market was valued at USD 7.93 billion in 2021 and is expected to reach the value of USD 10.75 billion by 2029, at a CAGR of 5.8%.
Retail Expansion and Consumer Preferences
Retail market expansion is significantly driving the global frozen yogurt market, with retailers like Costco, Target Corporation, Walmart, and Menchie’s playing a part in the industry. A shift in consumer preferences from dairy-based to non-dairy-based frozen yogurt, especially among high-income consumers, is notable. Manufacturers are attracting consumers through innovative product portfolios. The market for frozen yogurt is expected to grow at a higher rate than set yogurt, primarily because of its emergence as a dessert category and its pro-biotic nature. The United States holds a significant share of the North American market.