Kahala Brands recently announced the acquisition of Pinkberry, a company widely credited for kicking off the most recent frozen yogurt trend. Pinkberry opened its first location in West Hollywood, CA, serving super-premium frozen yogurt topped with fruit, granola and other toppings. The location drew numerous famous customers, and the brand became one of the most talked about concepts in the country. The company currently operates 258 locations in North America.
The Santa Monica, CA-based company founded a decade ago attracted millions in investments, but also dozens of competitors and imitators. The competition hurt the chain’s traffic. According to Pinkberry’s most recent franchise disclosure document, average unit volumes fell 16 percent in 2014, on top of a 6 percent decrease the year before. The company said traffic declined due to an increase in competition in the frozen treat market. Kahala plans to consolidate Pinkberry’s California-based corporate operations into its Scottsdale, AZ headquarters.
The acquisition of Pinkberry continues a period of intense activity for the growing company. The purchase gives Kahala Brands its fourth new concept this year, following acquisitions of Planet Smoothie, Tasti D-Lite and Maui Wowi. Kahala already owned numerous brands, including well-known sandwich shop Blimpie and the popular Cold Stone Creamery. Generating nearly $700 Million in system-wide sales annually, the company’s 18 quick-service brands operate 3,400 locations in 34 countries. Run by Chairman and CEO Michael Serruya, Kahala Brands is one of the fastest growing franchising companies in the world.