Business Talks with Thomas Nieto of Main Squeeze Juice Co. | business news
Thomas Nieto started out as a technician at AT&T in the early 2000s and eventually bought into a handful of cell phone repair shops which he eventually grew into a franchise – In and Out Smart Repair. As of 2015, the company had 78 locations and was the third largest chain of cell phone repair shops in the United States
Today, 37-year-old Nieto is taking the lessons he learned about franchising repair shops and applying them to his newest venture — Main Squeeze Juice Co., which sells cold-pressed juices and smoothies at 27 locations in the South, and 100 others are in planning and development.
Nieto, a native of Metairie, runs the company from its headquarters on Tchoupitoulas Street, where he employs 15 people. The company has nearly $20 million in system-wide revenue. He sat down to discuss his company’s origin story and the keys to successful franchising in a post-COVID business climate.
The interview has been edited for clarity and length.
How did a cell phone repairman start selling smoothies?
We sold In and Out Repair in 2017 and I was looking for my next business. I was in Lake Charles with a prospective salesman and he asked me to stop by his sister’s new smoothie and juice bar. I had to be polite and was immediately blown away. I couldn’t believe I was drinking something so healthy that tasted so good.
I left Lake Charles that day and called one of my brothers-in-law, who is now my business partner and general counsel, and said, “Dude, we’re getting into the juice business.”
So you bought this smoothie startup in Lake Charles that wasn’t even open yet?
Basically yes. We started the franchise company first. The people we bought from, Matt and Miranda Duplechain, didn’t yet own the intellectual property for Main Squeeze, so I found the person who had the rights to the name, bought it, then franchised it and made one License agreement with Matt and Miranda.
Within four months we had an operating agreement and started licensing. A lot happened quickly, but it was an incredible journey.
What is Geographic Footprint?
We’re mainly in the south, with plans for growth. We have sold the entire state of Arizona and will have 30 locations there. We have several more in development in Texas where we already have 15 locations. We’re in Florida, Mississippi, working on a multi-unit store in Missouri, and we’re all over Louisiana.
How do you manage to have a thriving franchise operation that is one type of business while focusing on a specialty beverage business that is an entirely different type of business?
You start with a focus on what you franchise because you can’t franchise what you don’t have. So priority one was to master the Lake Charles operation and really get into the business and learn the ins and outs of it, streamline it and structure it so it’s scalable.
Also crucial was the fact that Matt and Miranda had created about 90% of all the recipes and worked with some of the best chefs in the business. That made a big difference.
What is the competition like in your industry?
It’s an industry that is absolutely nascent and growing, and you’ll see the players who are doing it right continue to grow. Between 1990 and 2000 people became more aware of what they consume and this trend has continued. There is an ever-growing demand for healthier, cleaner eating.
What category are you in? Who is your competition?
I would call us the healthy category under QSR or quick service restaurants and specifically we are in the cold pressed juice/smoothie market. This is different than Smoothie King or Planet Smoothie. We really don’t compete with them. Our customer doesn’t go to Smoothie King.
It must be a tough business, with the cost of fresh produce and your margins can’t be that high.
I don’t care what area you’re in – this is a difficult time for all restaurants, for all brick-and-mortar businesses. Commodity prices have risen. The aftermath of COVID and the supply chain are still affecting logistics. We see a little relief, but it’s tough.
Franchised restaurants don’t have huge margins — maybe 10% to 20%. So if the cost of groceries increases by 10%, your profit is lost. Finally, last April we raised our prices by 10% and that helped, but it impacted frequency and traffic.
I’ll say this: we did a really good job weathering the storm. Some networks lost 50%. We haven’t had to close a store yet. We had to pivot and adapt.
A decade ago it was fro-yo bars, then cupcake bars. Are smoothies and cold-pressed juice bars a fad?
I think it’s a trend, not a fad. It will not go away. People are becoming more conscious of what they are putting into their bodies. Parents pay attention. We sell fruit and vegetables and make them taste good. I really feel like we’re in a great place, in a great place and at the right time.
What lessons have you learned from franchising your cell phone business that you applied to Main Squeeze?
So many, but if I’m completely honest, I’ve learned what not to do. First, you need to work with the right people (franchisees) who share your passion and fundamentally align with your values, because when the going gets tough – and it gets tough – they will leave.
We made mistakes with people in cell phone stores who were financially qualified but weren’t the right people. In addition, we probably grew too quickly with some of these shops. We have sometimes given the green light to a franchisee’s location too quickly and have not been strategic enough in evaluating whether this would give us a good presence or sufficient access.
I now spend over $100,000 a year to get big data and analytics for our sites because you don’t want to put those things in the wrong place. These aren’t ice cream parlors. You can’t unroll them.