MARKETING RESEARCH CASE EXERCISE
RESEARCHING THE OPPORTUNITY TO OPEN A TCBY FRANCHISE

TCBY Enterprises, Inc. is a Delaware-based corporation that was organized in May 1982. Today, the company operates from the principal address at 11300 Rodney Parham Road, Little Rock, Arkansas. TCBY is a publicly traded company on the NASDAQ over the-counter market. Currently, the franchise operation resides with TCBY Systems, Inc., located at the TCBY Tower, 425 West Capitol Ave., Little Rock, Arkansas.

Company Background

TCBY stores offer soft-serve premium frozen yogurt as a treat, dessert, snack, or light meal item. Yogurt, a cultured milk product, has become increasingly popular both domestically and internationally, due to its low calorie and cholesterol content and its high nutritional value. Traditionally, most forms of frozen yogurt have a somewhat tart taste with an icy texture. TCBY, which uses Americana as its primary supplier, produces a sweet-tasting, smooth-textured yogurt comparable to a premium ice cream, yet containing all the health benefits associated with yogurt.

Americana currently produces TCBY frozen yogurt in over 20 traditional and specialty flavors. Chocolate and vanilla are available daily in all TCBY stores, along with two to four specialty flavors. TCBY yogurt is also served in a variety of methods, including cups, cones, waffle cones, sundaes, and shakes. In addition, yogurt can also be complemented with such items as cookies, crepes, and Belgian waffles. Most of the menu items are also served with a variety of toppings, including M&M's, Oreo cookies, Reese's Pieces, hot fudge, and natural fruits. All TCBY products ate also sold in hand-packed freezer containers for take-home convenience.

TCBY stores are established in a variety of locations, including strip shopping centers, freestanding buildings (with or without drive-up windows), and regional shopping malls. Stores are primarily located in cities and small urban areas, especially communities with colleges or universities. TCBY stores range from 1,200 to 1,600 square feet, seat 24 to 44 customers, and cater to both carryout and eat in business. Most stores are open year-round.

At the end of fiscal year 1996, TCBY had 2,696 locations worldwide. It also had several thousand point-of-sale kiosks, such as in airport locations, worldwide. At the beginning of 1997, 314 new TCBY locations were under agreement. Most of the new store locations under development were expected to operate out of co-branded locations in conjunction with fast food, petroleum, and convenience-store locations.
For additional financial information and a rich history of TCBY Enterprises, Inc., consult the company's Web page at www.tcby.com.

1. Prepare a thorough market feasibility study for opening a TCBY location in your area. Specifically, gather data, such as that listed in Exhibit 4.4, to assess the possibility of opening a TCBY franchise in your city.

2. Once you have collected the necessary market data, provide an assessment of the possible success of the business. Be sure to justify your decision based on the data you have collected.