Jamba Inc. (JMBA) recently inked a purchase agreement for 13 stores in Florida with experienced multi-unit franchise operators Arturo Zindel, Jordi Zindel, Guillermo Perez Vargas and Angel Herrera, principals of Great Service Restaurants LLC. Jamba is a leading restaurant retailer of food and beverage offerings.
The 13 stores mentioned in this purchase agreement will help accomplish almost 80% of the company’s targeted refranchising initiative. The latest transaction is expected to close by early October.
Jamba sees tremendous growth potential in Florida, which it seeks to capitalize in full. The above mentioned deal affirms management’s intent to make Florida a prime market for Jamba Juice. As per the deal, Great Service Restaurants remains committed to expanding the Jamba Juice brand further by developing nine additional stores in southeastern Florida. Last month, Jamba also announced a development agreement for four stores in New Jersey. These development activities will likely strengthen Jamba’s growing presence in the East Coast area.
Jamba remains on track to accelerate both growth and market share by strategically transforming its company-owned units to franchised units. In the second quarter, Jamba also signed a huge international agreement to develop up to 200 stores in South Korea. The first Jamba store in Korea is slated for a late 2010 launch. Additionally, the company also expects to clinch another international deal by year-end 2010.
Jamba’s transition to a more franchise-centric model will likely reduce its capital employed and increase cash flow generation. Currently, Jamba Juice has 743 locations, out of which 58% of units are company-owned. Jamba expects to launch 30 to 50 new franchise units in fiscal 2010. 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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