Jamba Inc. (JMBA), the leading restaurant retailer of food and beverage offerings, recently inked an agreement to develop 13 new stores in Boston, Massachusetts, New Orleans, Louisiana and South Bend, Indiana markets with three new franchisees. This recent franchise development activity ensures accelerated growth of the company and complements the 311 franchise stores that are operating currently.
 
Among the 13 stores, seven stores will be developed in the New Orleans/Baton Rouge market.  The first store is likely to open by January 2011. Four stores will be developed in the Boston market, with the first store opening in early 2011. Boston is the largest city in New England and addresses over 100 colleges and universities. Hence, this strategic location is expected to drive considerable traffic once the restaurant opens. The South Bend market store will open in early December 2010.
 
Jamba remains on track to grow its restaurant concept through the development of franchised stores in new markets, which will be primarily in non-traditional venues such as airports and universities.  During the second quarter of 2010, Jamba opened four new non-traditional franchise locations and expects to open up to 30–50 new franchise stores this year.
 
In June 2010, Jamba also signed a huge international agreement to develop up to 200 stores over the next 10 years in South Korea. The first Jamba store in Korea is slated for a late 2010 launch. Additionally, the company expects to clinch another international deal by year-end 2010.
 
Although Jamba’s transition to a more franchise-centric model will decrease company-owned revenues due to the reduction in company-owned units, this will enhance free cash flow generation by reducing capital employed. Currently, Jamba Juice has 743 locations, out of which 58% units are company-owned. Management also plans to refranchise up to 150 stores by the end of the year. Upon accomplishing this target, the company will have approximately 60% franchised and 40% company-owned stores.
 
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