7.2 cups per kiosk per day????
OK, so I thought I would wait a week and check back at the reisandirvys.com counter for the number of cups of froyo sold to date. I just checked. It only comes to an average of 7.2 cups of froyo per day per kiosk, at an average price of $4.65/cup.
Not so good. Nothing short of bad, in fact.
Now, I know from what Alvie told me that these numbers may not be actual and that they are based on the company's estimates and occasionally adjusted to reality, but (a) I waited a week to see, and (b) if the company is using an average of 7.2 cups to run its counter, that must be because they know that that is not an unrealistic estimate. The company is telling us that that's the average (and you don't see them crowing about it in a press release). Even if the number is higher than 7.2, it would have to be a lot higher to be acceptable, wouldn't it? Like double or triple that number?
Now, I also know from what FroYoMan told me that some of the kiosks do much better than that, and I know that the numbers for the Houston Space Center and some other locations are darn good. But that just tells me that for the remaining hapless (majority?) of the franchisees, the numbers aren't even as good as a lousy 7.2 cups. So, for the guys like FroYoMan who are lucky enough to have snagged a great location, no problemo. But, for the more typical franchisee with a kiosk in the basement or something, the numbers suck.
I guess that once a franchisee has shelled out his dough for his froyobot, he's unlikely to throw in the towel even if he's just scraping by. Things will rock along for a while, I suppose. But for the prospective franchisee, the numbers just don't add up to a "buy" decision ... Unless, of course, the prospective franchisees aren't seeing these numbers. I don't know how frequently VEND is required to update the disclosures in its franchise offering memos, but I suspect that they are slow slow slow to do so.
Which brings me back to my thesis. Franchise sales are slowing down, and unless VEND pulls a hat trick and (a) solves its manufacturing and delivery issues, (b) finds locations other than the proverbial basement, and (c) manages to get average sales per kiosk up to a number high enough to have most franchisees singing its praises, those franchise sales are just going to keep going down.
It's not so bad if you are replacing $38,000 sales with $58,000 sales, but if your rate of defections rises substantially higher than your rate of new sales, the cash flow situation will get interesting.
AI
