Consistent with its strategy of expansion through franchising,
Jamba Juice Company, a subsidiary of
), recently announced the opening of a new franchised store in
California. This new store marked the company's fourth opening with
franchise company, Bright Works Incorporated. John Anderson is the
president of this franchise company and a highly experienced
The new Jamba store is located in Westfield Palm Desert Mall - a
shopping mall in Palm Desert, a city located in the heart of the
Coachella Valley. The mall offers a lot of choices for shoppers and
this new store is located in the food court inside the mall and is
expected to benefit immensely from its strategic positioning. We
also expect great variety in menu offerings at the new unit that
includes a vast variety of blended-to-order, fruit smoothies, fresh
squeezed juices and juice blends as well as snacks, sandwiches, and
beverages to attract guests.
The franchise company opened first two stores in Temecula,
California and in 2011, opened the third Jamba Juice franchise
store in Murrieta, California. It is committed to the
expansion of Jamba Juice stores in California. The franchise plans
to open three additional units in the Palm Desert area and four in
South Orange County over the next several years.
The state of California is located on the West Coast of the United
States. It is one of the most populous and a widespread state in
the U.S. California flourishes on its agricultural industry.
However, there are other important contributors to its economy
namely aerospace, education, and manufacturing. According to
Businessweek.com - 'if California were a country, it would have the
8th largest economy in the world'. The promising restaurant
industry in this state is a major driving force to the U.S.
economy. In 2012, total revenue from the restaurant sector in
California is projected to be around $63.8 billion.
However, the market is not free from competition. Many of Jamba's
peers like Starbucks Corporation (
) and Caribou Coffee Company Inc. (
) enjoy a comfortable position in California. Furthermore, a
sluggish macroeconomic environment acts as another short-term
The company plans to sign more franchise agreements in 2012, which
in turn will help expand its brand in the U.S. market. The new
openings help the company remain in sync with this strategy. In mid
September 2012, the Jamba Juice opened a new store in Indiana with
franchise company, Blended Blessings LLC. The franchise plans to
open four additional units in and around Indianapolis, Indiana by
In July, the company signed eight new franchise development
agreements that will broaden its presence in the central and
eastern regions of the U.S., adding a total of 32 stores over the
next five to seven years. For 2012, Jamba plans to open 40-50 new
stores in the U.S. locations and 15 new stores internationally.
Jamba, currently carries a Zacks #5 Rank, which translates into a
short-term 'Strong Sell' rating. Our long-term recommendation for
the stock remains 'Underperform'.
CARIBOU COFFEE (CBOU): Free Stock Analysis
JAMBA INC (JMBA): Free Stock Analysis Report
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