Red Mango to Grow by up to 100 Stores

Dallas Business Journal August 26, 2011 edition

Story by Steven R. Thompson

With a new CEO, Red Mango Inc. is looking to grow the franchise chain by up to 100 stores and break into the international market in 2012.

“Once the company got to a point were they felt like, ‘OK, we’re ready to grow this,’ there was discussion to bring someone on that had the professional experience and the wherewithal to make it more national than it already is — and international,” said Barry M. Barron Sr., who came out of retirement to run the Dallas-based company on Aug. 1.

Barron was brought in by Dallas-based CIC Partners, an investor in Red Mango. He previously spent eight years working for Dallas-based ACE Cash Express, growing the company from 700 to 1,800 stores. Barron, who also helped with Papa John’s International Inc.’s international expansion in the late ’90s, said he hopes to open between 50 and 100 stores in the United States in 2012.

The nonfat frozen yogurt company, which was started by Dan Kim in 2007, has 133 locations, with five in the Dallas-Fort Worth area. The all-natural yogurt has a trendy tart flavor.

While the tart-yogurt fad began seven or eight years ago in places like California, there is still plenty of room for expansion and competition, said Matthew Mabel, president of Dallas-based Surrender, which specializes in restaurant business management and development.

“I don’t think that’s a crazy expansion rate — that’s almost conservative expansion,” Mabel said.

With the yogurt trend booming in DFW over the past two years, with companies like L.A.-based Pinkberry and Dallas-based Yumilicious, it remains to be seen whether the frozen yogurt trend has a definite future, or at least a future for more than one main player. Pinkberry has four North Texas locations and Yumilicious has nine.

“We have to cut through the competitive clutter that is going on,” Barron said. “It’s a very active category. There is, to some degree, a yogurt war going on.”

Of big players Pinkberry and Red Mango, “neither one of those brands have totally distinguished itself from the other,” Mabel said. Representatives from Pinkberry and Yumilicious were not available for comment.

Barron believes that Red Mango can pull ahead of the pack through quality.

“It will play out eventually, but that’s a long time into the future,” Mabel said. “There’s plenty of time to be successful with that trend.”

Barron is working on finding alternative locations for Red Mango like airports and universities. The company recently signed a deal to supply smoothies to Baylor University Athletics as part of the athletes’ nutrition plan, Barron said. The company would not disclose the terms of the deal.

“It has the ability to get us in a lot of different venues where there are captive audiences,” Barron said of non-traditional locations.

The company is also looking to do more co-branding, or locating stores with other brands, Barron said. It currently co-brands with Original Soupman and Auntie Anne’s Inc.

The initial investment for a Red Mango location is $258,100 to $441,600. The average Red Mango does $522,580 in annual sales. To generate sales, the right location is key, Mabel said.

“Tart yogurt is very much a real estate game,” Mabel said. “A slight deviation in your location can prevent your store in being successful.

Engaging with the customer is also something that Barron believes sets Red Mango apart.

Founder Dan Kim runs the social media operations for the company and continues to be chief operating officer. Barron sees the company’s advertising efforts expanding into print and electronic spaces as the company grows.

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