Planet Smoothie Franchise Q&A with CEO Peter Holt
Planet Smoothie franchise CEO Peter Holt shares thoughts on smoothies, franchising and the brand’s growth
Planet Smoothie CEO Peter Holt
Planet Smoothie CEO Peter Holt has helped lead multiple iconic brands over nearly three decades. He headed up franchise sales and development for Mail Boxes Etc. (now known as The UPS Store) and served as vice president of the I Can’t Believe It’s Yogurt! frozen yogurt franchise, leading that company’s international expansion. He currently serves on the Board of Directors of the International Franchise Association.
Before joining Planet Smoothie in 2011, Peter worked with Great Hill Partners, a Boston-based private equity fund with more than $1.5 billion of capital under management, to assist them in creating a winning franchise portfolio.
So why is he excited about the future of Planet Smoothie? We asked him to share his thoughts on the smoothie industry, on franchising, and what makes Planet Smoothie special:
Why is the smoothie industry growing?
Smoothies meet a need. There is a growing awareness of the relationship between diet, health and nutrition. We have become more thoughtful about what we eat and about how what we eat affects the way we feel and how we look — and that is having an impact on the choices consumers make. Smoothies have become mainstream; they are seen as healthy. But not all smoothies are created equal. You would be surprised to see the number of smoothies on the market that are made from a powder or a syrup. And for most, the sugar content is off the scale. Consumers, now more than ever, want fresh products made with real ingredients and excellent nutritional value. Planet Smoothie makes real-fruit smoothies, and we use LeanLeaf, our proprietary sweetener made with agave and stevia. We also blend nutritional supplements, fresh greens and other add-ins into smoothies. You can get a “good for you” product. At the same time, when we say we have the best-tasting smoothies on the planet, it’s not just a tagline. If something doesn’t taste good, it doesn’t matter how good it is for you, and most customers won’t want it. Our smoothies have a lot of appeal, because they are healthier and taste great. Frequency data from our customer research tells us that we are getting this right.
Another thing that drives the business is the fact that we are, more and more, a culture of convenience. Our busier lifestyles have moved us away from the table – 40% of U.S. consumers are skipping at least one meal per day – and this has caused explosive demand for healthier snacking. We are looking for food that we can consume on the go. Just think about how much we eat and drink in our cars. Smoothies are a perfect fit for the way people live; they are such a portable product. The fact that smoothies are healthier, delicious and convenient gives them very broad appeal.
Another change in consumer behavior is the desire for customization. Thirty years ago, one of the things franchises promised customers was that every hamburger, everywhere, was going to be exactly the same. Today, people want to be able to order things that are specific to their tastes and preferences. A smoothie is perfect. We have 45 items on our menu, and every single one can be customized — ask for vegetable protein to make it vegan, or add leafy greens or a shot of wheat grass, for example. Smoothies are quick to make and can be precisely tailored to deliver exactly what a customer wants.
How has your career in franchising given you a unique perspective?
Peter Holt: I have been involved in franchising for nearly 30 years and have had the chance to get a very broad view of the industry. I started my career working for the International Franchise Association, where I was part of an organization that had members in 100 industries who were all using the same business model to grow brands. Franchising is a unique model for growth. At the IFA, one of the things I saw was that it is crucial to have a great concept that is differentiated in the marketplace, but that’s not all. It is more about training and communication, technical support, operational support, great marketing tools, and the commitment to innovate and create increasing value. It is about a true spirit of partnership in collaboration with franchise owners. . My job at the IFA was to understand the challenges franchisors face in delivering great systems, and through the association, help them overcome those challenges. It gave me an understanding of the common elements that great organizations all share, and that has influenced my whole career.
What makes franchising a great option for small business owners?
I sometimes tell people that when they buy a franchise business, one of the things they are buying is the accumulated wisdom that comes from past mistakes. Businesses have to make decisions constantly, and they either reap rewards or deal with consequences. The most successful business owners make fewer mistakes, and they learn from the mistakes they have made so they can make better decisions in the future.
One of the advantages of franchising is that franchisees can learn from one another, and those lessons are gathered and shared by the franchisor. There is a lot of shared learning, and as systems grow, the power of the accumulated knowledge grows exponentially, as long as communication is open and effective.
Communication is inherent in franchising, it is also a big advantage. Corporate-owned chains are not always great about listening to their frontline workers, and those frontline workers sometimes are not motivated to provide the best possible service to consumers. Since franchisees own their businesses, they have a huge stake in providing great customer service. When customers ask for something new, they let us know about it. That feedback helps us keep the pulse of our customers and evolve.
What are your plans for Planet Smoothie in 2015 and beyond?
Peter Holt: We plan to grow. We plan to accelerate the growth we are experiencing this year. We expect to grow about 25% in 2015. Our plan involves strengthening our core in the Southeast, where we have history and density, but also accelerating development in newer markets where we have been getting traction. California, Texas and the Midwest are particularly promising growth markets for Planet Smoothie. We are also seeking an area developer in Atlanta, where we already have a good number of stores. Area Developers are important accelerators for our growth. We believe this will help us double our presence there. We also have area developers who are focused on growing the brand in Dallas-Fort Worth and Houston. We expect to have a big year.
A number of those markets are in warm areas. Do you see growth potential in cooler climates?
Today, smoothies are a nationwide phenomenon. Some of our strongest stores are in New York, Pennsylvania and Massachusetts! Smoothies have a strong base of customers on the coasts, and Planet Smoothie will continue to expand there, but there are also great opportunities in the Midwest and other parts of the country. There is a bit of seasonality, but we account for it in our business model and can explain to potential franchisees how the business works in those areas. The fact is that consumption of smoothies is driven by demand for a functional, healthier meal replacement – it is not about cooling off on a hot day.
What makes Planet Smoothie a franchise people should watch?
Peter Holt: I think, without question, one of the most important attributes of Planet Smoothie is the amazing quality of the product. The product has always been incredible, and it really helped the brand get where it is today. Now, with a strong marketing and management team in place, we can leverage the excellence of the product to really expand the brand. We have been rolling out new products that resonate exceptionally well with our active-lifestyle consumers: smoothies that emphasize super-fruits, organic greens, and most recently our Veggie Love lineup.
The quality of the product, the clear trends in the market, and the opportunity to grow the brand are what attracted us to acquire and invest heavily in Planet Smoothie three years ago. The management team that we have here has more than 100 years combined experience supporting franchisees and growing great brands — it’s an extraordinary amount of experience and resources for a franchise system this size. Not that we expect it to stay this size for long.
Who is an ideal Planet Smoothie store owner?
The most important thing for a franchisee is to be passionate about the product — providing healthier options to your community should be something you love. They are working the store, they care about it, they are engaged with their customers, and they are doing local store marketing. They are engaged in building the business, and they take advantage of the vast array of tools, techniques and assistance at their disposal!
Then, if they want to own more than one store, they need to be strong managers. Someone who knows how to manage managers, and who can manage by the numbers, can be a great multi-unit owner. The great thing is that you don’t need a specific background. Planet Smoothie has a minimized set of challenges compared to a full-service restaurant. We offer a streamlined, simple concept and training to help people go from single-store owners to multi-store owners — and even become area developers who help grow an entire region. We can help people grow and move into new roles.
Is financing a new location getting easier?
Peter Holt: I think it is. Everything is relative. Is it as easy to finance a store as it was in 2005? No, but if you compare it with 2008 and 2009, it has absolutely gotten easier. The Wall Street Journal recently ran a story that pointed out that 2013 was the best year for SBA loans in a long time. That’s a traditional source of financing that a lot more people are tapping into again. Home equity loans are becoming more common again, too, now that housing values are rising.
Want to talk to Peter yourself?
To learn more about the Planet Smoothie franchise opportunity, fill out a form to download our free franchise report and start a conversation with our team. As you investigate the brand, you’ll have a chance to chat with Peter and ask him any questions you might have about Planet Smoothie. We look forward to meeting you!