5. Scoop Shops
Bringing Ice Cream to the People
Ben & Jerry’s began as a single ice cream Scoop Shop in 1978, and though our business has taken plenty of twists, turns, and swirls along the way, we’re 
in the Scoop Shop business more than ever before. In fact, we had over 436 shops scattered across the U.S. and Canada by the end of 2006. Most are owned and operated by independent franchisees, although Ben & Jerry’s also manages 10 company-owned stores in Vermont, New York City, and Las Vegas; and 18 of our stores (including Northern Ireland and Israel) are PartnerShops, owned and operated by nonprofit organizations. Visit Ben & Jerry’s Scoop Shops page on our company website for more information.
Serving Ice Cream to Serve Humanity
In addition to being gathering places for great ice cream, Scoop Shops are most often centers for Social Mission and activism. So when we take stock every year of how well we in Vermont delivered on our Company values, we also extend our thanks to the dedicated Scoop Shop owners across the country who’ve brought a commitment to social and environmental change into the way they manage business in their communities.
As a Company, we continue to look for ways to activate the company’s Social Mission priorities in our Scoop Shop network. Namely:
Encourage business to give back to the community
Our franchisees, their scoopers, and folks in our company-owned stores around the country made a difference by fostering positive social change through their local community action efforts in 2006.- Scoopers Making Change, a youth leadership program for Ben & Jerry’s Scoop Shop employees, is one way we greater activism through our business. In the 2006 pilot program, we brought nine scoopers from across the country to Vermont
and gave them a running start on implementing a social change project of their own design in their hometown. - As ever, we celebrated the anniversary of Ben & Jerry’s 1978 debut with Free Cone Day. This year’s worldwide event was our biggest yet, and we helped raise money for hundreds of partner nonprofits around the globe at the same time.
Help youth build better futures
- Our Scoop Shops are great venues to provide youth who may face
barriers to employment a place and a chance to gain critical job and life skills. That’s why we invented the PartnerShop model years ago, in which a Ben & Jerry’s Scoop Shop is owned and operated by a youth-focused nonprofit organization. We remain committed to seeing these mission-focused Scoop Shops succeed. - We also continued
our Cones to Careers program in 2006, a program that provides youth who face barriers to employment with job skills and hands-on work experience through internships in our company operated stores.
Build sustainable business practices
- Activating the Company’s core values throughout the franchise community is a key to our success. We know we’ve got to get better at setting targets and measuring our progress in this area. One statistic that we track annually is franchise ownership diversity.
- When franchisees build new Ben & Jerry’s Scoop Shops, we continue to
look for opportunities to source and specify materials and items that meet national standards for building green — while also meeting our build-out cost targets and the demands of the food service industry. Current materials successfully accomplishing this goal include “green” flooring, solid-surface counters, lighting, refrigerants, and paint.
Not the Only Cone in Town
In 2006, competition in the marketplace was unprecedented, with the total number of ice cream stores of all brands growing rapidly over the last two years. Clearly some markets where we operate have reached saturation. And while our customers did spend more money per transaction at our Scoop Shops in 2006 (average transaction increased 12%), we lost customers to the “new kids on the block.” With transaction counts down and sales per transactions up, we ended the year virtually flat.
Faced with this intense competition and still sporting tender wounds from the growing pains of 2005, we took a measured and conservative position in order to come out on top in 2006. The good news is that we accomplished most of what we set out to do.
The supply chain difficulties that led to under-fills, shortages and compromised product quality were rectified and franchisees were compensated with more than $120,000 for their losses. With new quality assurance processes in place we were able to deliver quality product, on time, in 2006.
In order to help us weather the storm in the over-crowded ice cream marketplace, we scaled back our new store development goals and got even more rigorous when approving new locations for Scoop Shops.
With a new Design and Build Manager on board in 2006, we were able to reduce the costs of building a new Scoop Shop by 30%, on average, while still incorporating a variety of “green” building materials (such as eco-friendly flooring products, non-toxic paints, and energy-efficient lighting). We will continue to evaluate our suppliers and materials to bring even greater cost savings to franchisees.
We dug our heels in and made some much needed improvements to our Scoop Shops’ computerized cash register system, reducing costs and improving performance for our franchisees. We’ve still got kinks to work out, but we’re moving in the right direction after two difficult years.
While we were hard at work to make good on our promises and make up for some of our shortcomings in 2005, a US-based columnist wrote an article in the United Kingdom-based Ethical Corporation magazine critical of several aspects of our franchise program over recent years, but perhaps most critical of the context in which we report our earnings information in our franchise legal circular. The writer suggests more earnings detail should be provided within the document. We maintain that by providing numbers that include the lowest sales, highest sales, average sales and median sales of the Scoop Shop system, it illustrates the complete sales range of the system. We also pointed out that the document notes that Scoop Shop sales vary widely and that potential franchisees will gain a better understanding of sales variability by interviewing an existing franchisee operating a Scoop Shop in a comparable location type.
While in our opinion the article does not fairly represent our practices or reflect our commitment to our franchisees, this experience moved us to reexamine what and how we communicate with our franchisees and the public in general. Going forward, we’ve challenged ourselves to be as precise and transparent as we can possibly be in all of our communications with prospective franchisees, the public, and our franchise community.
One of our first steps in that direction was to begin the process of “cleaning up” the Extranet, our franchise community’s online communication network. Franchisees have let us know that the Extranet has not been an effective way for them to communicate with each other or with folks in company headquarters, so revamping this is a top priority for 2007. Recognizing the limitations of the Extranet as a tool to build community and share clear messages, we also hosted eight system-wide conference calls to discuss issues on the minds of franchisees and published 11 monthly issues of “The Scream,” our franchisee newsletter.
We look forward to working closely with our Franchise Advisory Council to improve economic performance and the overall health of our franchise community. And while we still have work to do, we made some progress and feel we are well positioned for the future.