In 2014, Jamba Juice began a refranchising initiative in which they began selling company owned stores to new Franchise Owners. This dramatically reduced the cost structure and capital requirements of the business, as a whole. Approximately a year after this initiative began, Engaged Capital, an activist investment firm, took a large position in the company and has maintained active status at the board level since.
In 2016, Dave Pace, an industry veteran formerly with Bloomin’ Brands, became CEO of Jamba Juice and since Pace took over, Jamba has continued to take steps in an effort to further streamline the business and improve relationships with Franchise Owners while continuing the strategy of refranchising the company-owned stores.
This transformation from an operator to a franchisor has massively improved marginal profitability and current Franchise Owners are eager to continue adding additional units. “One-time issues mask a business with an attractive medium-term cash flow profile and take-private potential, and give public investors the chance to capitalize on short-term market inefficiency with 45%+ upside.”
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