D-LITE-FUL SUCCESS

Dessert biz is sweet with plans to expand
around the world.

The Tasti D-Lite brand, under new ownership, is enjoying a refreshed look and new vision. The company is positioned to become the global leader in the fast-growing light frozen dessert market which makes up a $20 billion industry.

When a New-York based private equity firm first considered acquiring light frozen dessert brand Tasti D-Lite, one of its operating partners – Jim Amos, the prominent franchising veteran – initially had some reservations.

Amos’s many accomplishments in the industry have been well documented. As CEO of Mail Boxes Etc., he led the company to an unprecedented phase of growth as it expanded from 2,500 to more than 4,000 franchises in more than 80 countries. And as CEO of Brice Foods – franchisor of “I Can’t Believe It’s Yogurt!” – Amos grew that concept to more than 1,300 locations domestically and internationally.

Among the reasons for his initial reluctance, Amos didn’t want to get involved in a start-up and he had promised himself he would never be a line CEO again. Sitting on a number of high profile board at that point in his career, he preferred having a more strategic impact as opposed to line responsibility.

“Through the due diligence process, I changed my mind about most of those things because the opportunity with Tasti D-Lite became very, very compelling,” said the entrepreneur.

Since being acquired by SPG Partners LLC in February 2007, Amos, along with the world-class management team he has assembled, is looking to take the soft-serve frozen dessert that has long been New York’s favorite guilt-free indulgence to the nation and the world by building a 500-store franchise network. Backed by a compelling strategic vision for the future, a brand new image and updated retail design, commitments have already been secured to open more than 200 Tasti D-Lite locations globally in the coming years.
Of course, Tasti D-Lite isn’t a start-up. It grew organically through independent licensee wholesellers in its hometown of New York City and neighboring areas including Long Island and New Jersey since being founded by Celeste Carlesimo and her father, Louis Carlesimo, in 1987.

Tasti D-Lite’s fandom had grown largely by word of mouth and had resulted in a large base of raving fans who lined up day and night to get their Tasti. Thanks to unsolicited national exposure on TV shows such as “Sex and the City” and “The Apprentice” the word spread even further. Despite the acclaim, Tasti D-Lite was run largely as a family business.

With 44 locations at the time of its acquisition, Tasti D-Lite has 50 stores today, including 36 domestic franchise locations, and commitments to build over 200 new stores in the coming years from its franchisees, area developers and master franchisees. The company opened two corporate flagship New York City stores in the Empire State Building and at 60th and Broadway in September 2008 and has another company-owned store in Miami Beach.

Domestically, new stores will open in Tennessee, Texas, Connecticut, California, Arizona and Florida by the end of 2009. Development agreements will bring a minimum of 16 stores to Nashville and middle Tennessee and a minimum of 40 locations to the southern Texas markets of Houston, San Antonio and Austin in the coming years. Projections also call for an additional 35 stores to open in the New York City area within the next 10 years.

Internationally, two stores have already opened and more are planned in South Korea as a result of Tasti D-Lite’s first international master franchise agreement signed in May 2008. Growth is also being targeted in Mexico, the United Arab Emirates and Western Europe.

What exactly is Tasti D-Lite? Tasti D-Lite is a dairy-based frozen dessert made from the finest ingredients with a creamy, delicious taste that is significantly lower in calories, fat, carbohydrates and sugar than full-fat ice cream. Tasti D-Lite is not frozen yogurt because it doesn’t contain yogurt or yogurt cultures and can’t be called ice cream because it does not have the higher butterfat and total food solids content of ice cream.
Depending on the flavor, of which there are more than 100, Tasti D-Lite has between 70 and 100 calories per four fluid-ounce serving, with most flavors having 80 calories or less, 1.5 grams of fat and 14 grams of carbs.

The Tasti D-Lite brand is the perfect guilt-free indulgence as people throughout the world enter an era of healthier eating. Because of its new ownership, refreshed look and new vision, it is also positioned to become the global leader in the fast-growing light frozen dessert market, which now makes up almost a quarter of the growing $20 billion frozen dessert market, according to a Packaged Facts report.

Tasti D-Lite’s growth strategy includes a combination of single- and multi-unit franchises, area developers and international master franchises. Area development is expected to play a key role. While Tasti D-Lite area developers must own and operate at least one location, their main focus is to work with Tasti D-Lite management to sell and support other franchises in their protected territory. In return, they earn commissions on the sales of franchises, plus a portion of the ongoing royalties paid by each unit franchise in the territory.

“The area development program can be very effective,” said Peter Holt, COO of Tasti D-Lite, who has worked with Amos for almost 20 years and saw the program’s success at Mail Boxes Etc. “When you do it well, it can accelerate the growth of your business, especially when we are talking about small retail boxes.”

As the Tasti D-Lite network grows, new stores will be predominantly in-line locations in strip malls, lifestyle centers, urban areas and university settings, with some stand-alone stores and non-traditional locations such as malls.

Amos, who said he’s tried to retire two or three times before, estimates he has supported more than 10,000 franchisees during his career as a franchise executive. The figure will continue to increase.

“Most of them have been successful and are still in business today, which is very rewarding,” Amos said. “Franchising is a compelling operating model that helps people where it makes sense: at the small-business unit. As it has historically during tough economic times, small business growth will be one of the biggest contributors to our country’s economic recovery. Recovery takes place at the line level where small businesses interact with consumers and provide the products and services they need. With our plans to build a 500-store global franchise network centered around delivering guilt-free treats that brighten peoples’ day, I’m proud of the fact that Tasti D-Lite will be part of that economic recovery.”
The company is based in Franklin, Tennessee. •