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Yogurt Franchisor Prepares Smooth Transition for Growth Plans

Fresh Healthy Vending International Inc. is renaming itself and splitting its franchises in advance of its release of its latest product, a frozen yogurt robotic kiosk.

Nick Yates

Fresh Healthy Vending International, a franchisor of healthy vending machines in San Diego, is creating a new parent company, Generation NEXT Franchise Brands, to manage its two subsidiaries, Fresh Healthy Vending LLC and Reis & Irvy’s LLC.

The company said it is changing its name to reflect its diversification and expansion into new markets. It intends to release five new franchise concepts in the next five years, one per year.

The company said it plans to bring 100 of its frozen yogurt robotic kiosks to San Diego between July and September, and is looking at grocery chains, convenience stores, hotels and movie theaters as locations. For San Diego, destinations, tourism venues and theme parks top the list.

High Profile Placements

“We want to secure a couple of high-profile San Diego locations so that when franchisees come out to meet us we can give them a look at the people who are very excited, with smiles on their faces, to get their frozen yogurt from a robot, to get our concept proven and out there,” said Nick Yates, chairman and founder of Fresh Healthy Vending International Inc. He works closely with chief executive officer, Art Budman.

The Reis & Irvy’s franchise was launched four months ago after Fresh Healthy Vending International signed a $250,000 exclusive agreement with Robofusion, the South Carolina-based company that created the robotic frozen yogurt kiosk.

The company wants to launch the product by partnering with national chains to expand in the same manner that Redbox did with DVDs through its agreement with Coinstar (now Outerwall Inc.). Redbox has over 35,000 kiosks across the U.S. in local supermarkets and convenience stores.

Yates said the frozen yogurt costs would vary by location, but could range from as low as $3 per serving at a retail store to $6 to $8 at a movie theater.

Fresh Healthy Vending International owns four older model frozen yogurt kiosks, which earned $238,231 in sales last year, and includes one at the Space Center Houston and one at Carnegie Science Center in Pittsburgh.

Fresh Healthy Vending International has one at its San Diego headquarters, and will roll out the new machine later this year.

The company anticipates selling 50 Reis & Irvy’s kiosks per month, or over 600 in the first year. Yates said the company expects to double its revenue over the next 12 months.

Fresh Healthy Vending International, using its existing infrastructure and almost identical business model and concept, is now selling to franchisees.

The Cost of Kiosks

Franchises can buy either four kiosks for $140,000 or eight kiosks for $280,000 with franchise fees included.

The kiosk costs about $32,500. The first franchise has already been sold in Tulsa, Oklahoma. The company’s goal is to place at least 1,000 machines every 12 months, a combination of 500 franchisees and 500 the company owns and sells.

Fresh Healthy Vending International already has four patents to protect its intellectual property, Yates said.

One of the advantages of frozen yogurt, Yates said, is that it is easier to find around the world than the healthy products in the company’s other vending machines.

“This time around, we’ve given ourselves a product that we cannot only market in the U.S. but market in 132 countries around the world, given that yogurt and cups and spoons are accessible around the world, versus healthy food products that made it difficult for us in the past,” Yates, 39, said. “So we’re excited about all those things.”

The company will use its manufacturers, Robofusion, and its current staff to market, produce and sell the kiosks.

Fresh Healthy Vending International has placed more than 3,000 vending machines and kiosks across the country from its healthy product portfolio, generating almost $6.3 million in revenue at the end of fiscal 2015 in June.

In the third quarter, the company made an additional $2.8 million in deferred revenue from the sale of 277 Fresh Healthy Vending units.


CEO: Art Budman

Revenue: $6.2 million (2015 ending in June)

No. of local employees: About 45

Headquarters: Clairemont

Year founded: 2010

What makes the company innovative: Robotic frozen yogurt kiosks and sales of healthy vending machine snacks and beverages


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