Smoothie budgets were drying up everywhere, and Frank Easterbrook was one of the first to realize it.
The owner and CEO of Juice It Up! — a chain of juice and smoothie bars, franchised by LLJ Franchise LLC — watched throughout the recession as the discretionary spending of consumers slowed to a trickle. With less money to cover bills and groceries, many households could no longer afford trips to the ice cream parlor or smoothie shop. It didn’t take long before Juice It Up! felt the pinch.
“As people lost their jobs, they stopped purchasing discretionary products, like things that were considered treats,” Easterbrook says. “Items like smoothies were just not being purchased at the level they were prior to the recession.”
The downward spiral only picked up steam throughout 2009 and into 2010. Cash dried up, forcing about half of Juice It Up’s locations to close. What was once a chain of 180 stores had dwindled to 90 by last year.
“My company was on many of those store leases as a guarantor,” Easterbrook says. “So in many cases, I became the last resort for the landlord, and I had to negotiate millions of dollars’ worth of lease settlements to get through the recession. It was something we never could have anticipated.”
The company has emerged from the recession intact and is attempting to re-enter growth mode, but the effects of the recession remain. Easterbrook’s skills as a leader were put through a severe test over the past four years. He and his staff had to find new and creative ways to market their products, boost morale for all 1,200 corporate and franchise employees, and protect the corporate culture that he and his leadership team had worked so hard to build and maintain.
Take initial steps
As revenue started to dry up, Easterbrook took some steps to try to solidify the company’s financial outlook — most significantly, he suspended some franchisee royalty payments to the company, and he negotiated rent reductions with commercial landlords, saving money for about 85 percent of the remaining Juice It Up! franchise locations.
But perhaps the most critical action taken by Easterbrook and his team involved advertising. Saving money in the form of reduced expenses gave franchisees some relief, but no retail entity survives without a steady supply of consumer dollars. Despite the steep uphill battle in front of them, Easterbrook and his franchisees had to lure customers in the door and get them to buy the product.
“Though we reduced royalty payments, we kept the advertising payments and fees coming in, because we felt we had to advertise heavily if we were going to get through this tough time,” Easterbrook says.
“Simply put, we had to have the means to let people know that we are still here. So we added to the advertising cash pool, and advertised using methods such as billboards and local television ads. We wanted to maximize the reach into our communities, to maintain our presence with consumers.”
Easterbrook gives his franchisees some degree of control over their advertising approach via a local store marketing, or LSM, program. The program allows franchise owners to tailor local advertising to their market.
“We have a lot of templates there for franchisees to use, where they can incorporate their own name and local information into the advertising template, then take that to the printer,” Easterbrook says. “It includes items such as coupons that they can distribute, posters to hang in the store and some other materials. We do try to give them a great deal of freedom with what they can use and materials they can create.
“But the freedom only comes after we’ve looked at the material and reviewed it, and decided that it fits the look and feel we want to see in our stores. The control we exercise is strategic-level control, but the specific implementation is up to the franchisee.”
Giving your field associates a reasonable amount of control over the marketing of your brand is important, because they know the customers the best. You do want the message to remain consistent with your brand and values, but you need to allow some flexibility regarding how your brand is related to potential consumers in a given geography.
“You need to understand who your core customer is, and focus your advertising on reaching that customer,” Easterbrook says. “But it is an awfully broad question, because each product can have its own demographic. Previously, I had worked in the food industry for Mars and Nestlé, two big companies that do a lot of advertising and spend a lot of money. We worked hard to understand who our customers are and to identify the most effective ways of reaching those customers.”
Throughout his career, Easterbrook has focused on an advertising strategy that creates multiple touch points with consumers. It’s something he brought with him when he came to Juice It Up!, and he continued to develop that strategy as the recession created an even more pronounced need for the company to appeal to consumers.
“In some cases, your strategy might consist of media coverage like radio and television, and other times, you might find it more useful to go the print route with coupons and Valpak mailers,” Easterbrook says.
“One area where we found some traction was bus stops, which kind of goes hand-in-hand with advertising on billboards. In most areas, the public bus stops have small shelters, so people can wait under a roof if it’s raining. Inside those shelters, there are places for paper advertisements, and we started advertising in there. It’s about finding a lot of methods to connect your brand to consumers.”
Illustrate your vision
During a crisis as severe as the recent recession, you’d be excused by most for going into survival mode, eschewing any large-scale plans in favor of merely reacting to whatever the economic climate throws at you.
That might help your company weather the storm from a financial perspective, but it won’t do anything to salvage team morale or reinforce your culture. In those areas, you still need to show your people that you have a vision — not just for getting out of the crisis but for prospering once you’re on the road to recovery.
At Juice It Up!, Easterbrook wanted to reinforce a message of stability throughout his franchise network. He wanted his franchisees to know that the tools and infrastructure for future growth were still in place and that the company planned to expand when the climate was right.
But for the duration of the recession, and despite the fact that Juice It Up! was losing franchises, he wanted his remaining franchisees to know that the corporate entity was stable and still capable of supporting its franchise network with whatever resources deemed necessary.
“As this recession started to cover us like a blanket, they just needed to know that we were going to be there,” Easterbrook says. “So we had a series of meetings, some in a face-to-face setting, and I found those to be very important.
“As the leader of the company, you need to be visible. You need to demonstrate your interest and concern for them and their businesses. Some of our franchisees have effectively invested their life savings in the company, in their stores, so I needed to assure them that we were going to be there, and we’re going to get through the recession together.”
Easterbrook used the meetings, and other communication opportunities, not only to reinforce his vision and promote a feeling of stability but to also maintain a dialogue aimed at developing a constructive relationship between the leaders at the corporate level and franchise operators. Strong interpersonal bonds form the basis for the working relationships that can help your company endure a crisis with its culture intact.
“Relationships are really critical to withstanding the kind of thing that we went through,” he says. “It becomes a function of establishing your core values and communicating those core values and maintaining a very high level of professional and personal integrity. If you are a person of high values and you practice and communicate those values and you live those values and you combine that all with honesty and integrity, people know you’re genuine.”
External marketing and internal communication produce the combined effect of reaching all three of the constituencies that Easterbrook needed to reach: consumers, franchisees and corporate associates. With all three constituencies engaged and aware of Easterbrook’s plans to bring Juice It Up! through the recession, the company was able to endure the crisis and is now emerging with a focus on the future.
“Our core values that we follow are quality, responsibility, mutuality, efficiency and freedom,” Easterbrook says. “We feel that each one of those impacts one of the three stakeholders that we have, which really leads to us establishing the way we operate. We strive to provide value for the money that our consumers spend with us and to assist franchisees in maximizing their investment. All of the programs we have and the communication we do is aimed at achieving both of those objectives.”
How to reach: Juice It Up!, (949) 475-0146 or www.juiceitup.com
The Easterbrook file
Frank Easterbrook, owner and CEO, Juice It Up!
History: I started as a small investor in Juice It Up! when the company was founded in 1995. The company had 25 stores by 1999, and in 2001, I bought out all the shareholders and focused on becoming a franchisor. We had grown the company to 180 stores in 2008, just before the recession hit.
What is the best business lesson you have learned?
Accept failure. Treat it as a lesson. When you open a store that doesn’t survive, you don’t look for someone to blame. You look to discover the lessons that you need to learn, and you debrief everybody on those lessons. You learn the things you did right and the things you did wrong. When you have a problem, don’t avoid it. Face the problem, make a decision and learn from the consequences.
What traits or skills are essential for a leader?
You have to be a person of values and integrity. If you have that, you will be someone that people will respect and listen to, so those are very important traits to have.
What is your definition of success?
Everybody has a different definition. Mine would be continual improvement. If you are better tomorrow that you were today, you will naturally become more successful. Things can’t stay the same. They’re either improving or declining, so if you want to survive as a business, they have to improve. As the head, you have to identify those areas for improvement.
Diversify your marketing strategy.
Understand your customers.
Refine your messages.