A frozen yogurt business is a store that mainly prepares and serves frozen yogurt and other frozen yogurt-based items, as well as toppings. A recent report released by Ibis World shows that the market size of the frozen yogurt industry in the US has declined 8.7 percent per year on average between 2017 and 2022.
The number of businesses in the frozen yogurt store sector in the United States was 239 in 2020, down from the previous year’s total of 250 businesses, and the number of establishments in this sector was forecast to decline to 235 in 2022.
Steps on How to Start a Frozen Yogurt Store Business
Table of Content
Conduct Market Research
Conducting market research before starting any business is key to the success of the business hence you must not open a frozen yogurt store without it. Market research provides critical information about your market and your business landscape. It can tell you how your business is perceived by the customers and clients you want to reach.
It can help you determine who and where your customers are, and which customers are most likely to do business with you. Thorough market research will help you understand how your target customers think to turn them into regular customers and brand advocates.
a. Who is the Target Market for Frozen Yogurt Business?
- Event planners
- Facility managers
- Every adult and child in the neighborhood where your frozen yogurt store will be located.
Please note that consumers between the age range of 18 and 35 buy the most frozen yogurt, accounting for 41.8 percent of sales.
b. Is Frozen Yogurt Shop a Profitable Business?
Yes, the frozen yogurt store business is quite profitable but you must be deliberate with your sales and marketing strategies if you intend to keep the business growing. According to IBIS World, the frozen yogurt market is a $1 billion per year industry with 2508 stores in operation. Based on this estimate, the average store generates $398,724 in annual sales.
c. Are There Existing Niches in the Industry?
Yes, there are existing niches when it comes to the frozen yogurt business, and here are some of them;
- Brick and mortar frozen yogurt store (sit-down frozen yogurt store)
- Drive through frozen yogurt store
- Kiosk frozen yogurt store
- Mobile frozen yogurt store (frozen yogurt carts or trucks)
d. Who are the Major Competitors?
- Menchie’s Frozen Yogurt
- Orange Leaf Frozen Yogurt
- Red Mango FC LLC
- Sweet Frog
- Let’s YO
- Tutti Frutti Frozen Yogurt
- Yogen Früz
- Yogurt Mountain
- Golden Spoon
- Spoon Me Frozen Yogurt
- YoLo Frozen Yogurt
- Tasti D-Lite
e. Are There County or State Regulations or Zoning Laws for Frozen Yogurt Business?
Yes, there are county and state regulations and zoning laws for frozen yogurt stores in the United States. Please note that the Food and Drug Administration (FDA) sets the federal Food Code. However, the FDA doesn’t oversee individual frozen yogurt stores. Instead, the various states use the Food Code as the basis for their food codes. They may adopt its rules, interpret them differently or set their own rules.
Please note that in the United States, you are required to follow your state’s food service code. Visit the FDA website for a list of food service codes by state. Use this to find the state authority handling restaurants and bars and view the laws that apply in your state.
f. Is There a Franchise for Frozen Yogurt Business?
Yes, there are franchise opportunities for frozen yogurt stores. They include;
- The Fuzzy Peach
- Yogen Fruz
- Golden Spoon
- Forever Yogurt
- Yogo Factory
- Orange Leaf
- Red Mango
- Yogurt Mountain
- 16 Handles
g. What Do You Need to Start a Frozen Yogurt Business?
- A Feasibility Report
- Business and Marketing Plans
- Business Licenses and Permits
- A Good Shop facility
- EIN (Employer Identification Number) / Federal Tax ID Number.
- A Corporate Bank Account
- Startup Capital
Memorable Frozen Yogurt Business Names
- Tyler Ferguson© Frozen Yogurt Store, Inc.
- Double Mix® Frozen Yogurt Store, LLC
- Cloe Mickey© Frozen Yogurt Store, Inc.
- Yogo Genius® Frozen Yogurt Store, Inc.
- Teddy Ben™ Frozen Yogurt Store, Inc.
- The Horizon™ Frozen Yogurt Store, LLC.
- Brown Yogo© Frozen Yogurt Store, LLC
- Sonia Delight® Frozen Yogurt Store, Inc.
- Green Lake© Frozen Yogurt Store, Inc.
- Red Cup© Frozen Yogurt Store, Inc.
- Reddington® Frozen Yogurt Store, LLC
- Reel Yogo® Frozen Yogurt Store, LLC
- Akin Louisa™ Frozen Yogurt Store, LLC
- Green Cups© Frozen Yogurt Store, Inc.
- Merilyn Phumla® Frozen Yogurt Store, Inc.
- Pamela Signature™ Frozen Yogurt Store, Inc.
- Gab Nelson™ Frozen Yogurt Store, Inc.
- Homeland© Frozen Yogurt Store, Inc.
- Yogo House® Frozen Yogurt Store, LLC
- Pacqueece™ Frozen Yogurt Store, Inc.
Register Your Business
a. What Type of Business Structure is Best for Frozen Yogurt Store?
When it comes to starting a frozen yogurt business, you have several options when it comes to the business structure, but the one most players consider is an LLC. It is common to consider an LLC because providers want to protect themselves from lawsuits. Please note that an LLC will need an EIN if it has employees or if it will be required to file the excise tax forms listed below.
b. Steps to Form an LLC
- Choose a Name for Your LLC.
- File Articles of Organization.
- Choose a registered agent.
- Decide on member vs. manager management.
- Create an LLC operating agreement.
- Comply with other tax and regulatory requirements.
- File annual reports.
c. What Type of License is Needed to Open a Frozen Yogurt Store Business?
- General Business License
- Health and Safety Permit
- Food and Drinks Handlers’ License
- Zonal Permits
- Signage Permit
- Operational State Facility Inspections
- A music license if you want to play live, recorded, or streaming music in your shop
- A dumpster placement permit that specifies where you can put your dumpster outside your shop
- Sidewalk permits if you plan to offer outside seating
d. What Type of Certification is Needed to Open a Frozen Yogurt Store Business?
You don’t need any certifications to open a frozen yogurt store business.
e. What Documents are Needed to Open a Frozen Yogurt Store Business?
- Business and liability insurance
- Federal Tax Payer’s ID
- State Permit and Building Approval
- Certificate of Incorporation
- Business License
- Business Plan
- Employment Agreement (offer letters)
- Operating Agreement for LLCs
- Insurance Policy
- Contract Document
- Company Bylaws
- Memorandum of Understanding (MoU)
f. Do You Need a Trademark, Copyright, or Patent?
If you are considering opening a frozen yogurt store, usually you may not have any need to file for intellectual property protection or trademark. This is because the nature of the business makes it possible for you to successfully run it without having any cause to challenge anybody in court for illegally making use of your company’s intellectual properties.
Cost Analysis and Budgeting
a. How Much Does It Cost to Start a Frozen Yogurt Store Business?
The cost required to open a frozen yogurt store business may vary significantly and it could be high, moderate, or low. A sit-down frozen yogurt store typically costs between $200,000 and $375,000 to set up. A large drive-through shop can cost between $80,000 and $200,000. A small kiosk frozen yogurt store may cost between $5,000 and $50,000. A franchised sit-down frozen yogurt store can cost up to $350,000.
b. What are the Cost Involved in Starting a Frozen Yogurt Store
- The total fee for registering the business in the United States of America – is $750.
- Legal expenses for obtaining licenses and permits as well as the accounting services totaling – $1,200.
- Marketing promotion expenses (2,000 flyers at $0.04 per copy) for the total amount of $80.
- The cost for hiring a business consultant (writing of business plans inclusive) – is $2,500.
- Insurance (general liability, workers’ compensation, and property-casualty) coverage at a total premium – $2,400.
- The cost of accounting software, CRM software, and payroll software – $1,500
- The cost for payment of rent for 12 months at $1.76 per square foot in the total amount of – $35,600.
- The cost for shop/facility remodeling – $25,000.
- Other start-up expenses including stationery – $500
- Phone and utility deposits will cost – ($2,500)
- Operational cost for the first 3 months (salaries of employees, payments of bills et al) – $30,000
- The cost for start-up inventory – $16,027
- Storage hardware (bins, utensil rack, shelves, glasses case) – $3,720
- The cost for counter area equipment (countertop, sink, ice machine, etc.) – $6,000
- The cost for serving area equipment (glasses, flatware) – $3,000
- The cost for store equipment (cash register, security, ventilation, signage) – $3,150
- The cost for the purchase of office furniture and gadgets (Computers, Printers, Telephone, TVs, Sound System, tables and chairs et al) – $8,000.
- The cost of launching an official website – $600
- The cost for our grand opening party – $3,000
- Miscellaneous – $2,500
c. What Factors Determine the Cost of Opening a Frozen Yogurt Store Business?
- The size of the frozen yogurt store
- The choice of location
- The required licenses and permits
- The type of facility
- The cost for branding, promotion, and marketing
- The cost for furnishing and equipping the frozen yogurt store
- The cost of insurance policy covers
- The cost for registering the business
- Source of your supplies and ongoing expenses
- Cost of recruiting and training your staff
- The cost for the purchase and customizing of uniforms
- The cost for the grand opening of the frozen yogurt store business
d. Do You Need to Build a Facility? If YES, How Much Will It Cost?
It is not compulsory to build a new facility for your frozen yogurt store business, but if you have the required finance, it will pay you to build your own facility. The truth is that building or reconstructing a facility will help you come up with a facility that will perfectly fit into your overall business goals and vision.
e. What are the Ongoing Expenses of a Frozen Yogurt Store Business?
- Supplies (inventory expenses)
- Utility bills (internet subscriptions, phone bills, signage and software renewal fees et al)
- Salaries of employees
f. What is the Average Salary of your Staff?
- Shop Manager (Owner) – $45,000 Per Year
- Accountant – $30,630,000 Per Year
- Yogurt Makers and Servers – $27,100 Per Year
- Cleaners – $25,000 Per Year
- Security Guard -$24,000 Per Year
g. How Do You Get Funding to Start a Frozen Yogurt Store Business
- Raising money from personal savings and sale of personal stocks and properties
- Raising money from investors and business partners
- Sell shares to interested investors
- Applying for a loan from your bank/banks
- Source for soft loans from your family members and friends.
Write a Business Plan
a. Executive Summary
Our frozen yogurt store business will be located in a fast-growing community in Fresno, California. We have been able to secure a two-year lease agreement for a vacant shop within the city’s largest shopping mall. We are fortunate to secure a facility with an option of renewal for 5 years at a rate that is favorable to us.
b. Products and Service
- Traditional frozen yogurt
- Tart frozen yogurt
- Smoothies made from frozen yogurt
- Yogurt parfaits
- Toppings and other yogurt-related food items
c. Mission Statement
Our mission is to build a yogurt store business that will meet the needs of all our customers in the regions or cities where we have our outlets and to sell franchises all across the United States of America and Canada.
Our vision is to grow our business all over the world and be the brand for quality yogurt, a great crew, cool culture, and active community involvement. We want to be known as the yogurt store brand with the triple threat- nutritious, aesthetically pleasing, and delicious.
d. Goals and Objectives
The goals and objectives of a frozen yogurt store business are to provide a retail outlet where patrons can go to buy different flavors of yogurt.
e. Organizational Structure
- Shop Manager (Owner)
- Yogurt Maker and Server
- Security Guard
a. SWOT Analysis
- Ideal location for a frozen yogurt store business
- Highly experienced and qualified employees and management
- Access to finance from business partners
- Access to ingredients and supplies.
- A reliable, clean, healthy, and efficient method of preparing yogurt.
- Financial constraints may restrict the publicity and branding of the business
- A new business that will be competing with well-established frozen yogurt stores and franchises in the city.
- Inability to retain our highly experienced and qualified employees longer than we want during the teething stage of the business.
- A rise in the number of yogurt lovers within our market space
- Online market, new services, new technology, and of course the opening of new markets.
- The arrival of a new frozen yogurt store within our market space
- Steady wage expenses and increasing prices of gas amid the low demand during the pandemic will reduce industry profitability.
- Economic uncertainty
- Liability problems
- The U.S. Food and Drug Administration (FDA) could change its regulatory status and decide to enforce strict regulations that can strangulate new businesses like ours.
b. How Do Frozen Yogurt Stores Make Money?
Frozen yogurt stores make money by selling the following products;
- Traditional frozen yogurt
- Tart frozen yogurt
- Smoothies made from frozen yogurt
- Yogurt parfaits
- Toppings and other yogurt-related food items
c. Payment Options
- Payment with cash
- Payment via credit cards
- Payment via online bank transfer
- Payment via mobile money transfer
d. Sales & Advertising Strategies
- Introduce your frozen yogurt store business by sending introductory letters alongside your brochure to corporate organizations, households, and other key stakeholders throughout the city where your frozen yogurt store is located.
- Advertise on the internet, on blogs and forums, and also on social media like Twitter, Facebook, LinkedIn to get your message across
- Create a basic website for your business to give your business an online presence
- Directly market your products.
- Join local frozen yogurt store associations for industry trends and tips
- Provide discount days for your customers
- Advertise our business in community-based newspapers, local TV and radio stations
- List your business on yellow pages ads (local directories)
- Encourage the use of word-of-mouth marketing (referrals)
a. How Much Should You Charge for your Product/Service?
On average, a pint of yogurt in the United States costs around 2.33 U.S. dollars.
b. How Much Profit Do Frozen Yogurt Store Owners Make a Year?
It depends, but available reports show that on average, a small to medium-sized frozen yogurt store can earn anywhere from $60,000 to $350,000 for the shop owner.
c. What Factors Determine the Amount of Profit to Be Made?
- The capacity of the frozen yogurt store
- The types of products retailed in the shop
- The location the frozen yogurt store is covering
- The management style of the frozen yogurt store
- The business approach of the frozen yogurt store
- The advertising and marketing strategies adopted by the store.
- The number of years the frozen yogurt store is in business
d. What is the Profit Margin of a Frozen Yogurt Store?
The profit margin of a frozen yogurt store is not fixed. But on average, most yogurt stores make 10 percent and above.
e. What is the Sales Forecast?
Below is the sales forecast for a frozen yogurt store. It is based on the location of the business and other factors as it relates to such startups in the United States;
- First Fiscal Year: $240,000
- Second Fiscal Year: $400,000
- Third Fiscal Year: $600,000
Set Up your Shop
a. How Do You Choose a Perfect Location for Frozen Yogurt Store?
- The demography of the location especially as it relates to people that take yogurts regularly
- The demand for frozen yogurt in the location
- The purchasing power of residents of the location
- Accessibility of the location
- The number of frozen yogurt stores, and restaurants that sells yogurt in the location
- The local laws and regulations in the community/state
- Traffic, parking and security et al
b. What State and City are Best to Open a Frozen Yogurt Store?
- Phoenix, Arizona
- Las Vegas, Nevada
- Tucson, Arizona
- Riverside, California
- San Antonio, Texas
- Miami, Florida
- Houston, Texas
- Fresno, California
- Orlando, Florida.
c. What Equipment is Needed to Operate a Frozen Yogurt Store?
- A commercial-grade soft-serve machine (please note that soft-serve machines and frozen yogurt machines are the same things)
- Refrigerators/freezers, dispensers, containers
When it comes to hiring employees for a standard frozen yogurt store, you should make plans to hire a competent shop manager (you can occupy this position), account clerk, yogurt makers, servers, cleaners, and security guard.
Launch the Business Proper
No frozen yogurt store opens its door for business without first organizing an opening party to officially launch the business. You can choose to do a soft opening if you are operating on a low budget or you can go for a grand opening party.
The bottom line is that with a proper launching of the frozen yogurt store, you will officially inform people in your city that your frozen yogurt store is open for business.
a. What Makes a Frozen Yogurt Store Business Successful?
- Choose a good location and shop facility to launch the business
- Make sure your shop is well stocked with different flavors of yogurts (give your customers options)
- Throw a party before officially opening the frozen yogurt store
- Be deliberate with your marketing sales approach
- Encourage the use of word of mouth to promote your frozen yogurt store business
- Leverage on all available online and offline platforms to promote your frozen yogurt store business
b. What Happens During a Typical Day at a Frozen Yogurt Store?
- The shop is open for the day’s work
- The serving areas, chairs, and tables are properly arranged
- Walk-in customers are attended to
- Deliveries of orders are made
- Stocks are taken and reports are written and submitted to superior officers
- The business is closed for the day.
c. What Skills and Experience Do You Need to Build a Frozen Yogurt Store Business?
- Excellent customer services skills
- Interpersonal skill
- Accounting and bookkeeping skills
- Business management skills
- Bargaining skill
- Work experience in a store environment
- Experience in managing people
- Experience in business administration
- Experience in handling different types of yogurt-making machines.