Famous Brands Franchising, the parent company of TCBY and Mrs. Fields, has been acquired by Pearl Street Equity for an undisclosed sum.
The two dessert concepts have shed a great number of units in recent years, with TCBY down from a reported 1,800 locations in the 2000s to just 168 at the end of fiscal year 2022, according the chain’s franchise disclosure document. Mrs. Fields has likewise shrunk, and now has just 125 units, according to the FDD for TCBY.
According to the press release announcing the sale, the transaction follows “the recent appointment of Joe Lewis as President and Chief Operating Officer of Famous Brands Franchising.” Lewis, according to the press release, has extensive restaurant experience and the brands plan to pursue a global growth strategy. Famous Brands has 350 total units across several countries.
Lewis said he was “confident Pearl Street is the ideal strategic partner for the future. This transaction will take our franchisee support to the next level.”
This expansion could be limited by the low unit volumes at Famous Brands Franchising’s flagship brand, TCBY. The yogurt chain has 88 traditional stores, with two recently opened stores excluded from its AUV calculations, and 78 non-traditional stores, including kiosks, which are generally located in malls. Those traditional stores had an AUV of $331,554 in FY 2022 and only 35 of the 88 attained or exceeded that number. The lowest-performing store in TCBY’s system that year had a gross revenue of just $51,947, and the strongest performing store had a unit volume of $1,299,448.
Famous Brands Franchising “had an accumulated deficit of $134.9 million, a pretax net loss of $0.9 million and positive cash flows from operations of $1.2 million for the 12-month period ended July 2, 2022,” according to the FDD.
Pearl Street Equity declined to specify what plans it had to facilitate the expansion strategy, strengthen operations or improve sales, and said it had no comment beyond the content of its press release. Z Capital became the sole shareholder of the brands in 2013, according to the 2022 FDD.
