Ever thought about owning a frozen yogurt outlet? You might want to give it a whirl. Make that a "swirl."
Yogen Fruz World-Wide Inc. of Toronto has acquired the Salt Lake-based Golden Swirl frozen yogurt chain in a $5.2 million deal that includes 71 outlets, 65 of them corporate-owned stores, in Utah, Nevada, California, New Mexico and Arizona.According to Golden Swirl founder and former president Mike Glauser, part of Yogen Fruz's acquisition plans include selling the corporate-owned Golden Swirl outlets to private franchisees. Yogen Fruz is the world's largest franchiser of frozen yogurt outlets.
Also included in the acquisition was Northern Lights, a division of Golden Swirl that is a wholesale distributor of frozen yogurt to restaurants, hospitals, convenience stores, hotels and other frozen yogurt chains.
"The Golden Swirl acquisition continues our strategy of enhancing our presence in the United States by purchasing strong regional chains that add to our market share and can be effectively absorbed by present management and infrastructure," said Michael Serruya, Yogen Fruz president and chief executive officer in a prepared statement.
Yogen Fruz will retain the Golden Swirl and Northern Lights names, and most of the companies' 500 to 600 employees will keep their jobs.
Glauser and his wife, Mary, started Golden Swirl in 1986 when they opened two stores, one in the Crossroads Mall and the other in the Valley Fair Mall. The company eventually grew to 65 corporate-owned stores in five states, and six licensed stores.
"The thing we did different was create proprietary recipes," Glauser said. "We had to have complete control of the product so we could control production, distribution and shipping."
Part of the strategy was innovative approaches to developing new products. Golden Swirl was one of the first chains to have a full line of non-fat products. They also developed smoothies under the name Nature's Own Blend, and then developed a series of additions that include protein powder and energy blends, and vitamins, fiber and calcium.
Yogen Fruz is a giant in the frozen foods industry with 3,038 outlets in 79 countries. Among the brands owned by the company are I Can't Believe It's Yogurt, Bresier's Ice Cream and Java Coast Fine Coffees, as well as Yogen Fruz, a dominant brand name in Canada.
From the early 1990s, Yogen Fruz was roughly the same size as Golden Swirl. But in 1994, the company went public on the Toronto stock exchange, raising about $30 million in capital that was used purchase ice cream, yogurt and frozen food companies. The Golden Swirl acquisition is the latest in a long line of purchases by the company.
Glauser said Yogen Fruz was particularly attracted to Golden Swirl because of the tandem relationship between the Northern Lights wholesale operation and the Golden Swirl retail side. And Yogen Fruz wanted a premium wholesale brand of frozen yogurt to market nationally.
"It is a good move for the company (Golden Swirl), and it will allow the brand to grow more quickly," Glauser said. "They have the systems, all the personnel and the experience to take the company to a new level. Our product lines will now be sold nationally with a company that has great vision and great resources, certainly more resources than we had."
Yogen Fruz's strong international growth and aggressive acquisition posture has boosted the value of its stock and, according to national publications, has made that company an attractive takeover target, as well.
The Golden Swirl acquisition "reflects on our continued commitment to gain significant U.S. market share through the consoli-da-tion of the ice cream and frozen yogurt retail industry," Serruya said.
"Golden Swirl is an innovative company that is loading one of the high-growth areas of the industry," he added.
The company intends to retain Golden Swirl's production facilities in Utah, which Glauser said is more cost-effective than producing the frozen products in at existing facilities in Dallas and then shipping the products to Southwestern states.