More US franchisors heading for Australia with big expansion plans

Australia is set to host two further American franchised food businesses, with both Tasti D-Lite and Slush Puppie announcing plans to expand across the country.

Friezer Australia has signed an international master franchise agreement to expand US-based Tasti D-Lite, a frozen yoghurt retailer, into Australia, with plans to open its first location in Melbourne in 2011.

The company says it plans to open an additional 30 stores throughout Australia over the next five years.

The news comes as US doughnut chain Krispy Kreme, which entered the Australian market in 2003, recently announced the closure of 21 Australian stores due to poor sales.

Georgina Crawford, director of marketing and operations at Friezer Australia, is confident about Tasti D-Lite’s entrance into the Australian market.

“We believe Australians are going to embrace Tasti D-Lite and become extremely loyal customers. Australia is an ideal market for this delicious, guilt-free treat,” Crawford says.

“While we have a robust healthy lifestyle industry here, the country also suffers from some of the highest rates of obesity in the world.”

However, Lorelle Frazer, director of the Asia Pacific Centre for Franchising Excellence at Griffith University, says the brand’s pro-health aspect might not be enough.

“They might start off okay because of the novelty factor – like when Krispy Kreme started – but then people get over it,” Frazer says.

“There definitely is a public perception about wanting healthier food. I don’t know if it translates so much into behaviour but people are starting to think that way.”

“So Tasti D-Lite probably has a bit of an edge that way but if it’s just frozen yoghurt, for instance, it’s going to be too narrow anyway.”

Frazer says most successful franchises offer a range of products in order to appeal to a wider market and therefore remain sustainable.

Slush Puppie, another US franchised brand, recently signed up its first Australian franchisee after announcing its intention to establish 90 franchises across the country.

The Slush Puppie product, owned by the Stafford Group, is already distributed via branded freezers at venues including supermarkets, fast food outlets and corner stories.

Co-owner Murray Stafford says the new franchises include a mix of established freezers in prime locations and a minimum of 10 new freezers per region, which can be established in new locations.

“The Slush Puppie business model is very simple and involves the manufacture of a concentrated product and maintaining a fleet of freezers that are placed in high volume retail outlets,” Stafford says.

“Franchisees will own and service those freezers in their franchise territories and outlets where they are located, such as convenience stores, who then sell the product to the end consumer.”

“Those retailers purchase the concentrate product from their local franchisee.”

This article first appeared on StartupSmart, Australia’s top site for starting a business.