Ross Franklin is the founder and CEO of Pure Green Franchise.
Cold-pressed juice and healthy smoothies company Pure Green is gearing up for its national franchise expansion after raising more than $1 million in an equity crowdfunding round through republic.co — a strategy that founder and CEO Ross Franklin believes can help build a wellness-focused community more efficiently, and even turn many community members into franchisees.
The fitness industry veteran launched Pure Green in New York back in 2014 after realizing how nutrition outweighs active lifestyle when it comes to reaching optimal health, and has developed a line of superfoods-enriched juices, smoothies, and shots that are currently available across major U.S. retailers.
The competition within juice and the broader functional beverages sector, however, has intensified over the years especially in retail, as evidenced by high multiples private equity and large strategics would pay for this type of transactions:
Suja, 30% of whose stakes were previously purchased by Coca-Cola in 2015, was recently acquired by PE firm Paine Schwartz Partners at a reported 8x multiple. PitchBook showed Suja has raised $11.5 million to-date, and its full-year 2021 revenue is expected to reach $185 million, a 7.5% decline from 2020. Cold-pressed hydration brand Lemon Perfect has also seen a valuation step-up by 1.19x, reaching $83.67 million after closing a total of $29.56 million in funding.
Smaller Footprint & Leaner Model
Branching out into the franchise model has enabled Pure Green to operate on a smaller footprint and leaner infrastructure, since stores can source bottled juices directly from established manufacturing facilities rather than building productions at each location.
Pure Green is on track to open 50 new locations by the end of 2021.
That also helps the company save significant labor costs, which could in turn be reinvested in fueling the growth of Pure Green’s wholesale unit, according to Franklin, who adds 75% of its franchisees are also committed to more than one location.
“We manufacture our cold-pressed juice in SQF-2 regulated facilities and distribute through dozens of the largest distributors in the U.S.,” said Franklin. “We have scalable manufacturing capabilities that allow us to stay ahead of our growth. Our distributor network allows us to service our cold-pressed juice in every state, which is the key to expanding our franchise division across the country and beyond.”
In addition to offering its core retail products made without fillers or added sugar, Pure Green Franchise also offers acai bowls, oatmeal in-store, and some of the emerging CPG snack brands, including The Yes Bar — all are designed to serve “a high-end demographic who places a premium on their health,” Franklin explained.
“The target footprint for a Pure Green franchise location is between 500 and 1,500 square feet,” he added. “We currently have 25 locations either open or in construction, and we are on pace to open 50 new locations by the end of 2021. We have development schedules with over 400 Pure Green franchise units that have been committed to in the coming years.”
Pure Green Franchise saves significant labor costs by sourcing bottled juices directly from its ... [+]
These new locations, coupled with a series of new products including a blue banana smoothie recently launched through a partnership with TV personality Jonathan Cheban, also known as “Foodgod,” anticipate to help Pure Green Franchise generate a total of $35 million in run rate by 2022.
Embracing Innovative Technologies
Commenting on overcoming challenges from the pandemic, Franklin noted, while Pure Green has experienced strong demand over the past year, in line with the overall healthy consumer products trend, the business had to rely more on third-party deliveries to balance off decreased foot traffic in stores.
He noted how Pure Green became one of the 40 U.S. companies to adopt a courier powder system in its POS square app that enables it to maintain the same pricing as in-store for delivery.
“With the high percentage of revenue coming from third party delivery, having to avoid the delivery commission fees as high as 30% has also allowed us to maintain our profit margins,” Franklin said. “Prior to the pandemic, third-party delivery accounted for 15% of revenue. At the height of the pandemic, delivery sales rose to 35%, and has since tapered off at 20% of revenue.
“We believe that the pandemic has accelerated the use of third-party delivery platforms and continuing to embrace technological innovations will be critical for QSR brands,” he added.
