Executive Q&A | Fosters Freeze

1851 Franchise: Can you tell us about your experience with franchising prior to becoming franchisors with Fosters Freeze?

Neal Dahya: With previous experience either owning, consulting for or investing in more than 180 restaurant franchise locations for brands like Burger King, Applebees, IHOP and Pizza Hut, we were prepared to take over and drive Fosters Freeze to success.

1851: How have those experiences helped to shape the way you run your business with Fosters Freeze?

Neal: Over the last five years, we built out an operational management system that isn’t only focused on how to grow units — we’re also focused on how to increase sales for our franchisees and make sure that they’re supported. At Fosters Freeze, our goal is to ensure that our legacy franchisees know we’re here to help them remain successful business owners while also driving new growth for the brand. We’ve seen this model work in the past. When we remodeled our Burger King locations, systems sales went up 16%. With one remodel that a franchise owner has done at Fosters Freeze, sales have jumped nearly 30% as well. 

1851: What makes Fosters Freeze unique in its segment?

Neal: Because Fosters Freeze has been around since the 40s, brand recognition is something that’s really strong for us throughout the country. We often talk to folks who love our products and want to build with us and see the brand grow. The brand is strong and has profit margins that are good, plus franchisees love the brand. We aren’t a McDonald’s or Burger King, and there are few corporate teams dictating everything to you. We have standards and a structure, certainly, but we want to level the field and work with you on your business. Fosters Freeze is more flexible than in that sense.

1851: How does Fosters Freeze support franchisees?

Neal: When we bought the company, cash flow was strong. We made plans to build a solid structure and foundation to help make our franchisees successful. We eventually learned that Fosters Freeze's previous owners neglected franchisees, and consequently, they weren’t too happy with corporate. Building out a support structure for them became the most important thing, and for the first year to year-and-a-half, we had to work to build and regain their trust. So far, we’ve had positive conversations and we’ve made a lot of progress. We’re now able to work together on solutions to any problems our franchisees might be having.

1851: What have been some of Fosters Freeze’s most important milestones over the past five years?

Nimesh Dahya: Our year-over-year numbers have increased, which is great. Our franchisees are seeing more success as well, which is our top priority. Knowing that franchisees are doing a lot better than before is the biggest milestone. Since we’ve taken over, they’ve let us know they’re much happier and their sales are up 80% — some are even looking to open more locations. They like the direction we’re going in. It’s been rewarding to spend more of our time, money and resources on the brand and really dedicate our focus to its success. 

1851: What are Foster Freeze’s growth plans for the next five years?

Nimesh: We’re open to expanding throughout all 50 states. Ideally, we’d like to slowly work our way east, starting in Arizona or even Nevada and eventually making our way to New York; however, if there’s a franchisee who is committed to building 10 stores, then we’re open to exploring that opportunity with them. As part of our route to continued growth, we’re currently running an incentive program that offers 50% off all franchise fees until December 31, 2020. Anyone who starts the process this year and closes by the end of 2021 will qualify for the promotion. We’re excited to see where that will launch our footprint.

The initial investment to begin operation of a single, stand-alone Fosters Freeze restaurant ranges from $611,500 and $1,009,000. The total investment necessary to begin operation of a single confections restaurant is $178,000 to $331,500. The initial investment needed to open a single co-located restaurant is $329,500 to $658,500. For more information on franchising with Fosters Freeze, please visit https://www.fostersfreeze.com/franchise/.