In the summer of 2008, when Marvin Gurman walked into Yeh! Yogurt and Café on Montreal's Boulevard Saint-Laurent – just across from Schwartz's deli – the colours, concept and feel of the place blew him away.
Not only was the self-serve frozen-yogurt shop right on trend with a movement happening in the United States, he was impressed with the very cool clientele drifting in and out. He called his identical twin brother, Jon, and said, "You've got to come see this."
By October of that year, the Gurman twins – co-CEOs of Montreal-based JCorp Inc., their family's wholesale clothing company – had partnered with Yeh! Yogurt's co-founders to create Goyogo Ltd. While it started as a hobby for them, the Gurmans quickly became passionate about the business, adding new stores and branching into franchising, even painting their cars – Jon's Ferrari and Marvin's Lamborghini – hot pink with logos to match the decor of the stores.
By December, 2012, they had bought out their partners, Grace Yeh and Jean-Daniel Nadeau, and began to expand in earnest, jumping from four stores to 14 and signing up new franchisees. The company now has corporate-owned or franchised locations in Montreal, Toronto, Halifax, Saint John, upstate New York and Burlington, Mass., with plans to build the chain to 35 stores by the end of this year. Goyogo has about 15 employees and annual revenue of $5-million.
But it wasn't love at first bite. When Marvin first tasted frozen yogurt while checking out the trend in California, he didn't like it, but "it grew on him." Once he became involved in the business, he started learning about its different types, tasting all kinds of yogurt in his travels around the globe. A real aficionado now, he swears his company's yogurt is "as good or better than anyone else's yogurt in the world."
With JCorp's annual sales to retailers in Canada and the United States – Target, JCPenney and Wal-Mart are among its clients – estimated at more than $100 million, the pieces for the Yeh! Yogurt chain's rapid expansion were already in place. The 54-year-old twins, who grew up in Côte Saint-Luc, Que., and have worked together in the apparel industry for 35 years, see the business as a long-term investment.
"Almost all the stores are profitable, 99 per cent," Marvin says. "On the corporate side, not yet. This is the growth period. You have to get up to 75 stores or more to really start to make money. The franchisees will make money, the corporate stores will make money – and we own corporate stores – but you need to keep hiring more people. As it grows, we need to reinvest in more people, so it's a struggle before we see the return."
Question: What differentiates Yeh! Yogurt from the competition?
Jon and Marvin Gurman: Yeh! Yogurt is a more sophisticated experience. We call ourselves the Starbucks of the yogurt business. A lot of college kids come, hang out and enjoy the atmosphere, although we get people of all ages. Some locations have fireplaces, leather lounge chairs and wi-fi. Music is very important.
But the success of Yeh! is the taste. It's why we're so popular in Montreal. Our yogurt is made right on the premises, in the back of every store, so it's fresh. That's the difference. Our way is a little more difficult. It doesn't come in frozen like in some of the other yogurt shops.
For some flavours, we use real Greek yogurt and others are regular yogurt with milk. Then we add the flavourings to it. We also have alternative products that set us apart from the other guys – crepes, coffee, s'mores and a cookie concept. It's especially important for the winter months.
Q: Is winter a challenge?
A: Definitely, but we need alternative products, even in summer, to go with the yogurt. It could be a bagel or another healthy treat but it's got to be something that fits into the concept. We wouldn't put pizza in a yogurt shop.
Q: But you'd put in bagels?
A: Maybe, if it was a healthy kind of bagel. Breakfast is one thing we really want to introduce to the shops because we think breakfast is a perfect fit. Our yogurt shops already have crepes and waffles that we make in front of the customer. The crepes are really working for us but 90 per cent of the business is the yogurt, just coming out of those machines – all sold by weight. It's also important to us to have very clean stores. Cleanliness is super high on our priority list.
Q: Why did you decide to buy out your partners to become sole owners?
A: It was time to move forward so we could do what we wanted with the chain. Partnerships can be difficult sometimes. One partner wants to move faster or slower or doesn't want to move fast at all. After we bought out the company in December, 2012, we've moved forward and franchised another 30 stores from January to June.
The difference is the speed. Before, every decision had to go through both partners. You get partners who don't believe in the same way of thinking. We have our way of thinking and have been in business a lot longer. They were younger partners. We just thought it was better for the business that either they take the chain or we take the chain. Together, we wouldn't have been as successful.
Q: As co-CEOs of JCorp, you're used to calling the shots together. Was it hard for you to make decisions with somebody else?
A: Right on. Very difficult. You just said what I didn't say. Very politically correct. They got a nice chunk of change and were able to move on and start their next venture, which I'm sure they will.
Q: How do you make business decisions?
Marvin: Jon says, 'I think I'm going to do this' and then I say 'okay,' or I say, 'I'm going to do that' and Jon says 'okay.' So everything's okay.
Jon: We'll bounce things off each other. If we disagree, we'll just talk it over. It doesn't take much to convince the other.
Marvin: We don't really get mad at each other if we make a bad decision. We laugh it off and keep moving forward. There's no hard approval process.
Jon: We believe in each other and trust each other.
Q: What's been the biggest challenge in expanding so quickly?
A: We have to be careful. Our philosophy is to go into a territory where we could be the leader and be important in that territory. We have to open up five to eight stores consecutively. When you go into a market, you've got to show that you're a chain. We'd get killed if we just opened up one store unless there's no one else there. In Halifax, we were first in so we were able to do that. Toronto will be the most difficult market for us to break into because you've got other yogurt shops. Yeh! is famous in Montreal but not at all yet in Toronto.
Q: What do you look for in franchisees?
A: Do they really like the concept? Are they prepared to work it hands-on? They have to have a work ethic, passion and the money – and the money's not the first thing. They also need some sort of experience in business. We have a lot of young franchisees. They see the trend and want to get involved, then they bring their parents in for the money. But we also have a lot ranging from 30 to 50, so all ages really. Yeh! Yogurt is expanding across Canada so we're looking for great people to take on different territories, say Alberta or Vancouver. We're open for business.
Q: What's challenging about having franchisees?
A: Being new to the business, what we've found out is that a lot of franchisees are very dependent on corporate. We're learning as we go along. We have to tell the franchisees that no matter how much support and marketing we give them, they still have to do a lot of work on their side to promote their stores. They have to get out there in the community and not sit back waiting for the customers to come to them.
It's very important that whenever a store opens in a community, that store becomes part of the local community – with events, charities and everything that goes on there. They have to work to get that business to the next level and some don't realize that. It's full-time work. When we go into a store, we'll show them how to pound the pavement – simple things like taking the chairs and tables and putting them out on the sidewalk, or giving out samples or $1-off coupons on the corner.
Our franchisees are our bread and butter, our most important asset. We have to take care of them and make sure they're being serviced. Communication is key.
Q: What do they need most?
A: Support. Marketing support. Our franchisees are like our customers now. But we also look to them for ideas because they're on the front line. They know what's selling and have suggestions on what they want to see from us, such as new flavours or posters or marketing materials.
Q: What's been the biggest learning curve for you both?
Marvin: We were already in the retail business so it didn't take us long to learn. We usually sell to the retailer in the clothing business, now we've become the retailer. But it's good because as the retailer, we can do what we want. When we're dealing with retailers in our apparel business, we manage the inventory that goes in. It's different today than it was years ago. We have to be very involved in the sell-throughs on the retailer's floor.
We analyze and replenish them – we're doing private label for everyone from Wal-Mart to JCPenney to Target – so we have really good experience from working with these retailers. We have the infrastructure of how to analyze sales, such as how much yogurt is selling in what stores and how much we need to buy for each store. It's all analytical. I always wondered why I was taking math in school. Now at 54, I know why. Math is everything. Numbers are everything.
Jon: We've got a pretty good team from our garment side. Being a small business, we've all come together. Some of the executive people who work on our garment side work on the yogurt side. Our president, CFO and analysts from JCorp also analyze our yogurt business. Everyone pitches in with ideas including our sales and marketing people.
Our garment people also help us merchandise the yogurt stores with new product development and promotions. We're also in the licensing business so we do cross-licensing with movies and character licenses. It could be anything from Pink Panther – because we're all about pink – or a Justin Bieber 'meet and greet' giveaway like we did a while back at the Bell Centre in Montreal. We're building a brand here.
Q: What's your advice to entrepreneurs today about starting a business in Canada?
Jon: We have a saying, 'You go, you get.' It's our culture. When you wake up in the morning, you don't think 'should I or shouldn't I?' You go. When you're in doubt, just say, 'You go, you get.' Jump out of that bed and go.
Q: Where did that come from?
Marvin: It came from me. Everything we went for, we got. Whether we wrote the order or that meeting led to success a month later, every time we took the effort, we got. It's not only in business but in life. If you want to meet people, you go; if you stay home, it's not going to happen.