Fosters Freeze is a beloved California ice cream franchise with more than 70 years of history, 65 locations – and no store growth in 15 years. But that’s about to change.
March 16, 2021 3 min read
This story appears in the March 2021 issue of Entrepreneur. Subscribe »
As franchisees, Neal and Nimesh Dahya were all about rapid growth. After first taking over corporate-owned Applebee’s locations in 2009, the brothers discovered their knack for restaurant management and, in the years ahead, grew a business that owned, consulted for, or invested in more than 180 restaurants across such brands as Burger King, IHOP, Pizza Hut, and TGI Friday’s. In 2015, they found a different kind of opportunity — buying not just some franchise locations but an entire franchise. They acquired Fosters Freeze, a California-based ice cream and burger franchise that first launched in 1946 and was ripe for revitalization. “Slow and steady” became their mantra. Now, after nearly six years of developing relationships with the brand’s 64 franchisees and updating operations, the Dahyas are finally ready to expand the storied brand.
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What was it like to step in as new owners and inherit 64 franchisees?
Neal: We were the sixth ownership group in a short amount of time, so a lot of franchisees were nervous. They knew we had experience with big brands and were worried we’d come on board and make the brand more like a Burger King. But we quickly saw that the biggest challenge at the company was lack of communication — there was virtually none between franchisee and franchisor. So Nimesh and I went and personally visited every location to get to know people, let them ask questions, and find out how we could help. They have our cellphone numbers, and now they’re comfortable reaching out. That wasn’t happening before.
What else needed attention at Fosters?
Neal: We did a whole brand exercise and have updated the logos and the packaging, released a new uniform, built an intranet system, updated the website, and created digital menu boards. We’re currently working on ordering kiosks, and we’re working with third-party delivery services. But we are preserving the core of the brand. Fosters has a very nostalgic feel, so the menu, the ice cream recipe — that’s the same. That brings back people’s memories.
Do you feel set up for growth now?
Nimesh: For the past five years, we’ve been seeing growth. Sales were up nearly 20 percent in 2019, and 2020 outperformed 2019. The first few years were about modernizing the look and branding. Now we’re ready for the next step. It’s taken time, but one of our franchisees is now looking to open up a new store — and a new store has not been opened for the past 15 years.
Neal: This franchisee had tried with past ownership but really didn’t get the support. So now we’re there to support our franchisees, and he was able to land this development.
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In addition to helping current owners grow, are you also recruiting new franchisees?
Nimesh: We’ve spent years building our foundation, and now in the past few months, finally, we’re seeking future prospects. We’re targeting neighboring states like Nevada and Arizona, places that may be familiar with the brand already just because of proximity to California. But we wouldn’t turn down someone who’s interested in opening a location as far away as New York. We’re trying to be strategic and hoping to open around 10 to 15 new locations this year. Growing at that pace will make sure we can still support our franchisees.