Case Study

Bus 227: New Business Development

A Canadian Franchisee Success Story

Submitted By-
Prerna Arora
Student ID- 300167829
CRN- 14703
Email ID- Prerna.Arora@student.ufv.ca

Submitted To-
Prof. Sushil Kumar
Certificate of Originality
I hereby declare,

1. I have used own words only,

2. I have not copied,

3. I have not Plagiarized,

4. I have cited all sources from where quoted or adapted.

Signature:
About the Company
Dale  Wishewan and business partner Jonathan Amack opened their first Booster Juice
outlet in suburban Edmonton. By responding to a thirst for healthier fast-food options,
Booster Juice has tapped the market for freshly squeezed refreshment.

In 2000, in order to decrease competition, Booster Juice bought out two smaller smoothie
chains.

In 2002, with nearly 75 stores open, Wishewan decided to drastically slow Booster
Juice's growth.Wishewan and his team spent about a year ironing out various kinks in the
business plan.

Today, Booster Juice has more than twice as many stores as its biggest competitor,
another Alberta-based smoothie company, Jugo Juice.

Encouraged by their success at home, Wishewan and Amack want to expand

internationally. In the United States, triumph will come by convincing regular smoothie
drinkers to switch brands. In both cases, finding reliable franchisees,good real estate, and
high-quality food suppliers is essential.
Capitalizing on the trend toward healthier options, Booster Juice, profitable in its first
year, now has 130 locations across Canada.

Jamba Juice and Smoothie King have already cornered the U.S. market, while, overseas,
potential customers don't even know what smoothies are. What's more, finding the right
person to champion the chain in a foreign country can be difficult. Booster Juice must
determine how to franchise on a global scale.
 Problem Statement
 Challenge of penetrating Canadian market with a cold product offering
Despite the trend for healthier options Dale was opening a new concept going into the
dead of a Canadian winter selling a cold beverage.

 Strategic Slowdown despite rapid growth

 Wishewan and his management team spent about a year ironing out various kinks in the
business plan. 

 Challenge of Franchising on the global level

One of the biggest hurdles is finding suitable overseas partners. “It is challenging to
qualify an individual franchisee in Canada,” says Wishewan, “but it is 10 times as
important to choose the right master franchisor”
Protagonist
Dale Wishewan has always been driven to pursue and achieve success. Possessing a
lifelong passion for sports and fitness. While travelling in the U.S., he noticed the
popularity of juice & smoothie bars, and realized there was an opportunity in the
Canadian fast-food market to provide healthy alternatives to consumers with an active
lifestyle. Making his own protein concoctions for years and his interest in health and
wellness made this an easy decision.

The first Booster Juice location

opened in Sherwood Park, Alberta,
in November 1999.

Dale was taking a big risk. Dale was

opening a new concept going into
the dead of a Canadian winter
selling a cold beverage. Co-workers,
neighbors, and friends thought Dale
was crazy to embark on something
so foreign to Canadians when he had
such a great career at Edmonton
Exchanger. If there is one trait Dale
exemplifies, it is determination.

As it turns out, people were ready

for a healthy fast-food alternative,
and there was nothing else like
Booster Juice in the market. With the decision made to open a juice and smoothie bar
things moved quickly. By the end of year one, 15 locations were open and in year two, 35
more were added. 50 stores in 2 years is considered a Canadian Franchise Record for
store openings from inception. 
Thesis
Early on Dale Wishewan made a decision on the Franchise form of Ownership

 According to the case, Booster Juice benefited from franchise agreements because
they allow companies to expand much more quickly than they could otherwise. A
lack of funds and workers could have cause a company to grow slowly.
 Through franchising, a Booster Juice invested very little capital or labor because
the franchisee supplies both.
 As a result the experienced rapid growth with little financial risk. It is very similar
to Patanjali. Pat Anjali is one of those Indian Brands which had exponential
growth in a small period of time as compared to any other brand.
 The company was also able to ensure it has competent and highly motivated
owners and managers at each outlet through franchising. Since the owners are
largely responsible for the success of their outlets, they will put in a strong and
constant effort to make sure their businesses run smoothly and prosper.
 In addition, booster Juice is able to provide franchising rights to only qualified
people.

Also the people were willing to buy booster juice franchisee because there is a low risk
due to the tried and tested formula. Buying a franchise business provides a higher chance
for success. They knew that the the market potential for healthy food alternatives was
quite big.They get the benefit of owning a proven business formula that has been tested
and shown to work well in other locations.

In addition, they received the support from Booster Juice toward establishing the
business, and the training to operate it successfully.
The Strartegic Slowdown- Boon or a bane

In 2002, with nearly 75 stores open, Wishewan decided to drastically slow Booster
Juice's growth.
Dale Said “but we said to ourselves that this whole thing is going to implode on us if we
don't put the brakes on.”
 Wishewan and his management team spent about a year ironing out various kinks
in the business plan.
 He secured better deals with food distributors and improved quality control by
hiring permanent staff to visit each franchise about four times a year to ensure it is
performing adequately.
 In a business like Juice Booster If the staff aren't very focused on portion control
they could be out of supplies. Or, if an employee's friend comes in, there is
potential for product not to be rung in.
 If these measures are not taken your food costs are 36% or 37%, as opposed to the
average 29% to 31%.”
 Today, Booster Juice has more than twice as many stores as its biggest competitor,
another Alberta-based smoothie company, Jugo Juice.
Antithesis
Of course, no business arrangement is without potential risks and disadvantages. While
there are many advantages for the franchisor in entering a franchising agreement, some of
the potential risks are:

– Difficult to control activities of franchisees: In any franchise agreement (particularly

when there is geographical separation between the franchisor and the franchisee), it can
be difficult to control the activities of the franchisee and ensure that their activities are up
to standard.

– Huge risk in reputation by allowing other businesses to use their names: if a franchisee
does not live up to the quality standards of the franchisor (cleanliness, customer service,
pricing, quality of product, etc.), this can have a negative reputational effect not just on
the franchisee, but on the broader reputation of the franchisor as well. Thus, there is a risk
in allowing others not directly connected to the business to use the business name and
trademark.
Questions
1. Do you think booster juice grew too fast in its early years ? What are the
disadvantages of rapid growth from the franchisor-franchisee perspective?
Yes, I feel that Booster Juice grew too fast in its early years.

Sometimes the popularity of the original brand outshines every other brand and this leads
to the opening of several franchises in one geographical location. No doubt, in the
beginning, the franchise will make large profits but will they be able to sustain the growth
is an important question.

It is difficult to maintain this type of hype and that too within a limited boundary. The
increased level of competition, later on, will prove a disadvantage for all the franchise
located in that area.

So with rapid growth there is always a fear of oversaturation which will not be good for
either franchisor nor the location owners.
2. The company originally started out as fresh fruit, But it has since moved to frozen
produce to control costs. Do you think that is a good idea?

An average smoothie costs about $5, similar to a fancy coffee drink, but is made from
expensive produce and dairy, not cheap coffee beans. “If you're doing everything right,”
warns Wishewan, “it is only a 20% margin. And it is not easy to do everything right.”
So in order reduce costs, I feel that the company made the move. But one one the
company’s unique selling proposition was ‘fresh Fruit never frozen” and I feel like by
compromising on the quality of ingredients its brand loyalty will de affected.
Relationship to concept
There are three different types of franchise:

 Business format franchises

 Product franchises
 Manufacturing franchises

Booster Juice is a type of Business Format Franchise

In business format franchises, Booster Juice expanded by supplying independent business

owners with an established business, including its name and trademark.

Booster Juice assisted the independent owners ie franchisee considerably in launching

and running their businesses. In return, the business owners pay fees and royalties.

Like booster Juice charges Initial Franchise Fees of $30,000 and Royalty fees are 6% of
gross sales and Marketing fees are 3.5%.
Recommendations
Although There are no signs of slowing down for the 20-year-old company with
upcoming plans to offer rewards for loyal customers, new menu offerings, and opening
new locations both in Canada and abroad. But I feel it needs to incorporate some changes
in its operations to further its goals

 Booster Juice has incorporated local fruits like peach and fig to customize the
menu of its franchisees in Saudi Arabia. But it has done anything like that in India
or China. I feel like whichever country it operates in it should localize the menu.

 It has a well-defined marketing campaign in Canada. Baseball Player Jose Bautista

endorses the brand. I feel like it should launch a similar campaign in its other
global locations with a celebrity sportsperson as an endorsement. For eg- Virat
Kohli. This will boosts its presence in the Indian market.

 Right Quality Candidate for Franchise: It should be careful while finding the right
person to franchise. As seen from the recent controversy of use of over counter
disinfectant for washing fruits and vegetables.It was not a company wide issue. It
was just that the location did not adhere to the health and safety standards. But the
incident tarnished the brand reputation.So it must be careful in findiding the
candidate to run its franchisee and train yhem in the company’s policy.
References
1.  "Two Guys with ONE BIG IDEA". Archived from the original on 16 November
2012. Retrieved 1 April 2013.
2. Bogomolny, Laura (12 February 2006). "Boost their juice". Canadian
Business. 79 (3): 56–59.
3. "Contact Booster or Buy a Franchise". Retrieved 1 April 2013.
4. Wishewan, Dale. "Booster Juice Thrives". Edmonton Journal.
5.  Jan 06, Sarah Rieger · CBC News · Posted; January 6, 2019 8:16 AM MT | Last
Updated. "Calgary Booster Juice was using countertop cleaner to wash fruits and
veggies | CBC News". CBC. Retrieved 2019-03-25.
6.  "Sani Stuff Disinfectant and No Rinse Sanitizer". Avmor. Retrieved 2019-03-25.
7. "AHS finds Calgary Booster Juice location used surface sanitizer on fruits,
vegetables - Calgary | Globalnews.ca". globalnews.ca. 2019-01-04.
Retrieved 2019-03-19.