Generation Next Franchise Brands Inc. (fka VEND)

[gdogg1000]

Here’s some more due diligence…

Prior to investing, I asked myself. What is the CMA (competitive, market, advantage). This is one of the five points of business analysis and in my opinion, the most important. You need to compete with other similar concepts, so as to get repeat customers. Any business that starts will pop in the first several months because there is excitement around the concept. As enthusiasm fades, the reality for the business owner sets in. This is the normal progression of small business. In this case, we will take a look at the competition in the yogurt market. The oversaturated nature of this industry is such that ANYONE who is thinking of attempting to enter it needs to look at the yogurt market as a whole. Many are closing (including Dannon’s shop) who Vend has partnered with. Simply put, there are shops everywhere. Like I stated in my previous posts, they offer better selection, variety, quality, freshness. These drives repeat customers. Most of them carry Danon, so Vend isn’t doing anything special. So where does this leave VEND? Basically picking up the scraps. The Reiys and Irvy’s machine are 99.9% impulsive vending machines. No different than any other machine in the sense that I can go out of my way to buy a Snickers bar at 7-11 OR I can buy it in front of the vending machine that is standing right in front of me.

Since it is impulsive and a TREAT! I ask myself; Would I be better spending $5000-$8000 on a Dippin Dots Vending Machine OR $50,000 on a Triple ended Yogurt Machine were the franchisor squeezes me on the price of the machine, the royalty, AND back ended vendor rebates to the franchisor. Remember the Dipping Dots craze!!! https://www.flickr.com/photos/milst1/6136514170

In researching various locations I see massive saturation. In some places, there are almost as many yogurt shops as coffee or pizza shops. That’s also why the market is contracting. No excitement.

Los Angelas?https://www.google.com/maps/search/yogurt+shops+los+angelas/@34.0579909,-118.4130799,12z

Sacramento
https://www.google.com/maps/search/yogurt+shops+sacramento/@38.5663877,-121.6221888,11.08z

Orlando
https://www.google.com/maps/search/yogurt+shops+orlando/@28.4946442,-81.4622988,11z/data=!3m1!4b1

Florida
https://www.google.com/maps/search/yogurt+shops+portland/@45.515267,-122.8160197,11z/data=!3m1!4b1

Summary:
Location is CRITICAL. Where do you put the machines? I would like someone to prove me wrong on this. I have seen these machines in private trampoline parks, etc. Those seem to be independently owned businesses whose owners are simply capitalizing on dollars per sq foot. They are adding the machines as an ancillary income stream to their already existing business. Nothing huge there.