A Canadian franchise group with U.S operations is buying most of the franchise assets of Richmond-based frozen yogurt company SweetFrog for a cool $35 million.
MTY Food Group Inc., based in Montreal, announced Tuesday that one of its wholly-owned subsidiaries has signed an agreement to acquire SweetFrog Premium Frozen Yogurt’s franchise system.
SweetFrog “is an exciting brand serving premium quality frozen yogurt and will fit perfectly within our portfolio of brands,” Jeff Smit of MTY’s U.S. operations said in a statement. MTY’s U.S. operations are in Scottsdale, Ariz.
MTY’s U.S. brands operated under its Kahala division include Baja Fresh, Cold Stone Creamery, Great Steak, Blimpie, La Salsa and Samurai Sam’s. MTY owns a license for TCBY Frozen Yogurt in Canada only.
SweetFrog has 254 franchised locations and 78 corporate-owned locations. Of those 332 restaurants, 324 are located in the United States and eight are located internationally. As part of the deal, the current 78 corporate-owned locations will transition to franchised locations under current ownership.
“I am excited to see what Smit and his team of restaurant industry experts can do as we become the largest SweetFrog multi-unit franchisee,” said Patrick Galleher, chairman and CEO of SweetFrog Enterprises and managing partner of Boxwood Capital Partners.
The transaction is expected to close within 30 days.
MTY expects to consolidate operations and run the franchising platform from its U.S. headquarters in Scottsdale, Ariz., under Smit’s leadership.
“We become the largest franchisee, and I will run that operation,” said Galleher, who said he will stay in Richmond and run the 78 corporate franchises that will become franchised locations.
“We are looking for new office space for the new operation. Some staff will potentially transition to MTY/Kahala,” he said.
SweetFrog Enterprises LLC was founded in Chesterfield County in 2009 by Derek Cha. The company was sold in February 2015 to local private equity group Boxwood Capital Partners.