Raving Brands, Inc. - Company Profile, Information, Business Description, History, Background Information on Raving Brands, Inc.

1935 Peachtree Road
Atlanta, Georgia 30309

Company Perspectives:

Atlanta-based Raving Brands features a franchisee-centric portfolio of fun, healthy and fresh restaurant concepts.

History of Raving Brands, Inc.

Raving Brands, Inc., is an Atlanta-based private company with a portfolio of five fun and irreverent franchise restaurant concepts in the fast-casual category. Planet Smoothie, with 136 franchises, is the third largest fresh fruit smoothie company in the United States. The chain offers four categories of smoothies: Booster, Fat Burner, Wellness, and Workout. Vitamin and other supplements, called Blasts, are also available to customize the drinks. In addition, Planet Smoothie offers a range of sandwiches, wraps, paninis, and salads. Raving Brands' fast-growing Moe's Southwest Grill takes a fresh and healthy approach to southwest cuisine while adopting a lighthearted attitude. Menu items include Joey Bag of Donuts, Homewrecker, The Ugly Naked Guy, I Said Posse, Puff the Magic Dragon, and Moo Moo Mr. Cow. Another Raving Brands concept is Mama Fu's Noodle House, which offers healthy wok-cooked Korean, Thai, Vietnamese, Chinese, and Japanese food. As with other Raving Brands restaurants, Mama Fu attempts to create a high energy and fun atmosphere. Doc Green's Gourmet Salads, Raving Brands' latest concept, specializes in healthy and fresh made-to-order salads, casseroles, and sandwiches. PJ's Coffee is Raving Brands' only acquired concept. In addition to franchising Starbucks-like PJ's Coffee outlets, Raving Brands has launched PJ's Coffee and Wine Bars to create a hybrid category to set the franchise apart from Starbucks and other coffee house chains.

1980s Origins

After graduating from the University of North Carolina at Chapel Hill, Raving Brands founder, Martin Sprock, spent five years in commercial real estate with Portman, Barry and Carter during the 1980s. He became involved in the restaurant business when his favorite bar, Clarence Foster's, closed. He team up with the bar's founder and reopened the business at a new location. Sprock went on to build or buy a number of other bars and nightclubs in the Southeast, creating a profitable business. But in the early 1990s he decided to sell off his interests and start over, eschewing the nightlife for healthy family-oriented food and beverage restaurant concepts.

Sprock's first idea was to take advantage of the rising popularity of the smoothie, a concept that had been pioneered by the Orange Julius chain, which had begun selling juice drinks with a smoothie consistency back in the 1920s. The term smoothie did not come into popular usage until the 1980s. The drinks were mostly sold at health clubs and so-called juice bars on the West Coast. Sprock saw an opening to sell nutritional smoothies in the Southeast and in 1995 opened a store in Atlanta he called Planet Smoothie. He quickly began to build a chain of Planet Smoothie stores and within two years had 25 partnered locations in Atlanta and another 20 spread across the Southeast. Reflecting his playful attitude were the names Sprock gave to his smoothie concoctions: Werewolf, Frozen Goat, Two Piece Bikini, and Mr. Mongo. Like other smoothie chains emerging across the country, Planet Smoothie viewed its drinks as meal replacements, but most consumers still required the "chew factor," which led to the introduction of wraps in the Atlanta stores in the fall of 1997.

Planet Smoothie began to franchise in mid-1998 and by the end of 1999 topped the 100-unit mark. Generally the chain targeted strip mall locations but began looking to shopping mall food courts as well as less traditional sites such as airports and office buildings. In Atlanta Planet Smoothie worked a cobranding arrangement with Exxon, establishing outposts in three convenience store gas stations. The chain's menu evolved in the meantime, with a number of new wraps offered. Store design also was upgraded, with menu boards simplified, and a more fun, hip, and lighthearted décor was introduced, more in keeping with the image Sprock wanted to convey. Colors that mirrored the fruits used in the drinks--reds, oranges, yellows, and greens--were now employed.

Although Sprock talked about opening 250 Planet Smoothies operations in 2000 and 1,000 total units by 2002, the smoothie market was quickly becoming saturated. Competition not only included other smoothie chains--such as Jamba Juice, Smoothie King, Freshens Smoothies, and Juice Works--but also ice cream chains Baskin Robbins and Dairy Queen and local restaurants, health food stores, and health clubs. To better compete, Planet Smoothie refined its menu in 2000, adding blended soups. The chain was also very successful in establishing Planet Smoothie as a fun brand. Nevertheless, accelerated growth did not materialize and the chain stalled around the 135-unit level. An attempt to launch a health and nutrition web site called Planet Living was shelved in the aftermath of the dot-com bubble bursting.

Moe's Southwest Grill Debuts in 2000

Sprock now looked for a new restaurant concept to franchise, one that would embody the same values as Planet Smoothie--merging a zany outlook and eclectic environment with healthy fast food. In addition, he wanted any new franchise concepts to have the ability to coexist, so that if joined they could offer customers a choice of healthy food at one location. He settled on Mexican food and launched Moe's Southwest Grill, which Sprock described as "a Mexican Subway." According to the Atlanta Business Chronicle, "Moe's was based in small part on [Atlanta] local favorite Willy's Mexicana Grille. Sprock even offered to go into business with Willy's founders." Moe's was intended to be a cut above the typical Mexican burrito shop, offering a wholesome ambience as well as fresh food. Everything was to be made from scratch and no freezers or microwaves were to be found on the premises. Like Planet Smoothie, Moe's coined colorful names for menu items and created a fun atmosphere. When customers entered they were greeted by an employee calling out "Welcome to Moe's." The first store opened in December 2000 in the Buckhead section of Atlanta in the Peach Shopping Center. Moe's was not the only fresh Mexican food chain that was attempting to crack the market, but the Moe's concept took hold and soon became the fastest growing chain in the category.

Sprock's next franchising concept came by way of acquisition and was again inspired by personal experience. He told the Atlanta Business Chronicle that his wife got tired of drinking $3.50 cups of "trendy" coffee. In 2002 he acquired New Orleans-based PJ's Coffee and Tea Co., a 25-shop chain. PJ stood for the chain's founder, Phyllis Jordan. She moved from Des Moines, Iowa, to New Orleans in 1977, escaping an unsatisfactory job as a social worker to open a store that sold whole coffee beans and loose tea. She soon began to sell prepared drinks as well. It was not until 1984 that she opened her second store, and five years later, in 1989, she began to franchise PJ's. After selling the chain to Sprock she stayed on as an adviser on product development. Included in the sale was a coffee roasting and packaging plant in New Orleans, which was underutilized. According to Jordan the plant could roast three times as many coffee beans, which meant the chain was well positioned to support significant growth. Not only did Sprock and the PJ's management team plan to aggressively franchise the coffee shops, with the goal of becoming the second largest in the category behind only the Starbucks chain, but also to begin selling wine in some of the shops. This idea would ultimately lead to the introduction of PJ's Coffee and Wine Bar. The belief was that wine would complement the chain's quality coffee and increase evening traffic. Because more than half of the income would come from coffee and tea sales, PJ's would still be classified as a restaurant.

Forming Raving Brands in 2003

Sprock was in the vanguard in the emergence of the healthy, made-to-order food fast-casual restaurant sectors, one of the hottest trends in the industry. One reason offered for this shift was that consumers had become more health-conscious and customers appreciated watching their food prepared; fast-food restaurants, on the other hand, failed to keep pace. University of Central Florida restaurant professor Chris Muller further speculated to the Orlando Sentinel in a 2004 article on what accounted for the sudden rise in the category: "9-11 was a catalyst in the industry--a bolt of lightning that really shook things up. ... Because so many people were out of work and returned to the restaurant industry, all of a sudden we had a pop of new ideas. The growth of fast-casual restaurants has energized the business. We're seeing new Mexican, Asian, and other concepts like we never have before." To house his budding empire of fast-casual franchise concepts, in 2003 Sprock formed a holding company named Wow! Brands, which soon was renamed Raving Brands.

In 2003 Raving Brands conducted a four-month trial in an Orlando Planet Smoothie store, which was converted into a Planet Smoothie Café concept. A number of items were added to the menu to help differentiate the smoothie chain. The trial proved successful enough that management elected to move forward on franchising the café idea. The food items, branded as Planet Smoothie Eats, included such breakfast fare as energy bowls, egg beaters, and cereal; lunch items like veggie wraps and lemongrass chicken panini; and a children's menu that offered soy-based peanut butter and jelly sandwiches and fruit rollups.

It was also in 2003 that Raving Brands launched yet another new fast-casual healthy food concept, exploring Pan-Asian cuisine: Mama Fu's Noodle House. The name was coined by Sprock who reportedly thought "Fu" was a fun word and that the addition of "Mama" provided southern connotations. Like Moe's, the new concept relied heavily on a funky atmosphere: bright colors and 1980s music. Employees greeted diners with "Come to Mama." The first Mama Fu Restaurant was opened in Buckhead in June 2003. Due in large part to the success of Moe's, Raving Brands was able to quickly pitch Mama Fu to franchisers. By the end of 2003 the company had commitments for 175 Mama Fu restaurants across the country. Former Wendy's International executive John Casey, for instance, signed a deal to open 44 franchises in Florida. In 2004 Mama Fu planned to open additional restaurants in the Atlanta area and more than 50 altogether. Initially the chain looked to target southeastern markets--Georgia, Florida, North Carolina, and South Carolina--with hopes of moving into such growth markets as Houston, Los Angeles, and Washington, D.C.

Far from content, Sprock launched yet another healthy, fast-casual concept in 2004: Doc Green's Gourmet Salad stores. The source for this idea came from Sprock's own frustration in finding a good salad. He told the Atlanta Business Chronicle in January 2004, "Sometimes you want to eat something a little lighter, but those wimpy fast-food salads or '70s-style salad buffet troughs aren't appetizing at all. ... We know we can do a better job in the salad business." A Doc Green's corporate store was opened in Atlanta in 2004, offering made-to-order salads with a range of salad greens, lettuces, and vegetables, as well as such toppings as chicken, fish, crumbled cheese, nuts, and a number of dressings. In addition, Doc Green's offered soups, panini sandwiches, and other bistro items. Like other Raving Brands restaurants, Doc Green's relied on vibrant colors and popular music on the sound system.

In 2004 Raving Brands planned to open ten Doc Green's, 50 Planet Smoothies, 150 Moe's, 50 Mama Fu's, and 25 PJ's. The goal was to have 1,000 units between the five concepts in the near future. But even the idea of such a mini-empire did not satisfy Sprock and Raving Brands. He continued to look for new fast-casual concepts. Very likely his next move would be into the seafood category. He told the Atlanta Business Chronicle in 2003, "It's something I've thought about, and it hasn't really been done well before. ... And maybe if nobody else (meaning possible franchisers) likes the idea, I might go ahead and do it myself."

Principal Subsidiaries: Moe's Southwestern Grill, LLC; Mama Fu's Noodle House, Inc.; Planet Smoothie Franchises LLC; PJ's USA, Inc.; Doc Green's Gourmet Salads Inc.

Principal Competitors: Jamba Juice Company; Smoothie King Franchises, Inc.; Chipotle Mexican Grill, Inc.; Fresh Enterprises, Inc.; Santa Barbara Restaurant Group.


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