Fosters Freeze Celebrates Sixth Consecutive Year of Sales Growth, Plans Expansion in 2021

In 2020, after five consecutive years of store-level sales growth, Fosters Freeze, the iconic California-based ice cream and burger franchise, saw a 18% jump in sales. Now, the brand is preparing to leverage its recent success to partner with new franchisees to open stores in new markets throughout 2021.

Brothers Neal and Nimesh Dahya, franchise veterans who have worked with more than 180 restaurant franchises, including industry behemoths like Burger King, IHOP and Pizza Hut, purchased Fosters Freeze from its previous owners in 2015. The brand has been a beloved West Coast institution for more than 70 years, but in recent decades, it had lost some of its shine; previous ownership had done little to encourage growth, and the franchise system was little more than a disconnected chain of ice cream shops sharing a brand name.

Since 2015, the Dahyas have revived the franchise, providing new support for franchisees and reinvesting in growth.

Their efforts paid off almost immediately. Across the system, sales have increased every year since the Dahyas took over. And in 2020, during a pandemic that all but shut down large swaths of the economy, Fosters Freeze still pulled off an impressive 18% leap in sales compared to the previous year.

“2020 was a difficult year for everyone, and our success despite those challenges just goes to show how strong this brand is,” Neal said. “We have an incredible consumer offering and an extremely loyal customer base. By rebuilding our corporate team and reinvesting in our franchisees, we’ve made significant progress in restoring this brand to its former glory.”

At its height, Fosters Freeze had more than 300 stores across its franchise system. Over the years, that number shrunk to 65, but the Dahyas have made strides towards expansion.

In 2020, one of Foster Freeze’s longest-running franchisees, a five-unit owner of more than 50 years, decided to expand their operation for the first time in years, opening a new store in Salinas, California, and Neal says demand for stores in new markets has surged.

“The question we’re constantly hearing is, ‘When are you coming to my state?’” Neal said. “So we know the demand is everywhere, but we’re being very careful to grow out strategically.”

The Dahyas cautious growth strategy is meant to ensure that every franchisee benefits from the brand’s newly heightened resources and franchisee supports, including marketing support, technology, and site selection for new stores and a streamlined new menu that has reduced food costs, just to name a few.

The Dahyas have also reconnected the Fosters Freeze franchise network, reestablishing a community of owners who can engage with each other and share best practices.

“The beauty of a franchise network is that no one is ever left to run the business alone,” Nimesh said. “In addition to all the new support systems we’ve built out on the corporate level, every one of our franchisees has dozens of other franchisees who are facing the same challenges and opportunities, and they all have great ideas to share. We’re making this franchise network a true community again.”

Hafed Alwajih, a Fosters Freeze franchise owner since 2012, said his stores have experienced dramatic growth since the Dahyas joined the brand.

“Since Sanjay Patel and Neal bought Fosters Freeze and took over corporate management, sales have been up 10–15% each year for each of my stores. That’s almost an 80% increase in sales across my stores,” he said.

Fosters Freeze’s unmistakable gains over the past six years can be attributed largely to the Dahyas focus on franchisee success, something Nimesh says they learned from years of working with a range of restaurant franchises.

“We’ve worked with a lot of different brands, so we’ve seen what works and what doesn’t,” Nimesh said. “We know that the more you invest in the franchisee, the better their business is going to perform and the better the entire system is going to do as a result.”

On the heels of a massively successful 2020, the Dahyas are preparing to leverage a reengaged corporate team, a thriving community of franchisees and a host of impactful new operational improvements for more growth throughout 2021.

The Dahyas have plans to introduce Fosters Freeze to new markets across the U.S., starting with Arizona and Nevada, where the strong brand awareness makes Fosters Freeze a lucrative proposition for new franchisees.

“We’re starting with the markets surrounding our existing locations so that we can build on the momentum we’ve found in recent years, but this is an opportunity that will work anywhere,” Nimesh said. “We made amazing progress in 2020, but it’s just the beginning.”

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/.