In short: In this edition of Robert Nikic Reviews, I'm looking at franchise fads, using frozen yogurt as the case study. Froyo boomed and busted not once but twice. The lesson isn't that franchising is bad. It's that a franchise built on a trend carries different risks than one built on everyday demand. I'll also cover the federal disclosure rules that help buyers tell a solid franchise from a weak one or an outright scam.
Frozen yogurt was everywhere when I was in high school. Then a lot of those shops went under. It came up on a podcast with Sean Kelly, and it's still one of the clearest examples I know of a trend dressed up as a business.
▶ Watch: Watch: Robert Nikic x Sean Kelly on franchise fads
There are a lot of franchises built around a trending food. When the trend fades, the stores go with it.
How did the first frozen yogurt boom go?
Most people think the froyo boom was a 2000s story. It actually happened before that.
In the mid-1980s, a sweeter version of frozen yogurt took off as a healthier alternative to ice cream. Chains like TCBY, Golden Spoon and Penguin's opened stores around the country. TCBY grew to 1,200 locations in seven years. By the early 1990s, the boom had gone bust, as fast-food restaurants and convenience stores started selling frozen desserts and people no longer needed to make a special trip (Los Angeles Business Journal).
That's the first warning sign of a fad: when the product is easy for everyone else to add to their menu, a specialty store loses its reason to exist.
And the second boom?
The tart-yogurt wave started in Los Angeles. Pinkberry opened its first store in West Hollywood in 2005. Red Mango, which started in South Korea in 2002, set up a US branch in 2007. Self-serve chains like Yogurtland followed, letting customers pour their own flavors and toppings by the ounce (Los Angeles Business Journal).
Then the numbers turned. According to NPD Group data reported by the Atlanta Journal-Constitution, frozen yogurt sales rose 13% in 2008, rose just 3% in 2009 and fell 15% in 2010 (AJC). In the same article, an NPD restaurant analyst called it a "me-too industry": everyone watches what others are doing and jumps on board, so competition keeps rising.
By early 2009, the Los Angeles Business Journal was already reporting closures, more than 250 frozen yogurt shops in Los Angeles County alone and warnings about saturation (Los Angeles Business Journal).
Where does frozen yogurt stand now?
Smaller, but not gone. In Massachusetts, for example, Boston.com reported in 2026 that Pinkberry, Red Mango and iYo no longer have stores in the state, and that Orange Leaf, which was expected to reach 41 locations there in 2013, was down to three (Boston.com). Some independent shops are doing well and say demand is coming back.
That's the realistic ending for many trend businesses. The category shrinks to the operators who are good at it, in the right locations, without the hype.
The froyo timeline
| Period | What happened | Source |
|---|---|---|
| Mid-1980s | Sweet frozen yogurt boom; TCBY reaches 1,200 locations in seven years | LABJ |
| Early 1990s | First boom goes bust | LABJ |
| 2005–2007 | Pinkberry opens; Red Mango enters the US; tart wave begins | LABJ |
| 2008 | Sales up 13% | AJC / NPD |
| 2009 | Sales up 3%; closures and saturation reported in LA | AJC / NPD, LABJ |
| 2010 | Sales down 15% | AJC / NPD |
| 2026 | Several big names gone from Massachusetts; independents report renewed interest | Boston.com |
How do you tell a fad from a lasting franchise?
Here's my scorecard. I've used versions of it on every opportunity I've looked at.
| Question | Staple | Fad |
|---|---|---|
| Do people need it, or just want to try it? | Need it regularly | Try it once or twice |
| Can competitors add it easily? | Hard to copy well | Anyone can add it to their menu |
| Is demand tied to a season or a moment? | Steady year-round | Peaks with a trend or social buzz |
| How many locations opened nearby in the last year? | A few | Many, very close together |
| Would it survive a recession? | People still buy it | First thing people cut |
| Is the brand selling the product or the hype? | The product | The hype |
Frozen yogurt in 2009 scored badly on almost every row. Shops opened close together, competitors could easily copy it, it was an indulgence people cut during the recession, and demand followed the trend.
The same scorecard works outside of food. Any business, franchised or not, is safer when it's built on demand that repeats.
What does this say about franchising in general?
Not much, honestly, and that's an important point. Franchising itself isn't a fad. It's a business model, and many franchises are built on staple demand. Lots of franchise formats exist, from traditional storefronts to service-based and online models, with very different fee structures. None of them is a fad by definition.
What the froyo story shows is that the brand on the sign matters less than the demand behind it.
What makes a franchise a scam rather than just a bad bet?
A fad franchise is a bad bet. A scam is different: it involves deception about what you're buying. The protection against both is the same: disclosure and due diligence.
In the US, the FTC's Franchise Rule governs how franchises are sold (eCFR). Here's a factual summary of what the FTC tells buyers to expect, based on its consumer guide.
The Franchise Disclosure Document (FDD)
According to the FTC, you must receive the franchisor's Franchise Disclosure Document at least 14 days before you sign a contract or pay any money to the franchisor or its affiliate (FTC). The FDD has 23 numbered Items. The FTC suggests reading all of them and asking questions about anything you don't understand.
The Items the FTC highlights
| FDD Item | What it covers, per the FTC |
|---|---|
| Items 1–2 | The franchisor's background and its executives' experience |
| Item 3 | Litigation history |
| Item 4 | Bankruptcy history |
| Items 5–7 | Initial and ongoing costs |
| Items 8 & 12 | Supplier, territory and customer restrictions |
| Item 11 | Advertising and training |
| Item 17 | Renewal, termination, transfer and dispute resolution |
| Item 19 | Financial performance representations, if the franchisor makes any |
| Item 20 | Franchisee lists, including contacts for current and some former franchisees |
| Item 21 | Financial statements |
Source: FTC.
Earnings claims
The FTC explains that franchisors aren't required to provide earnings information. If they do, it must have a reasonable basis and appear in Item 19, and you can ask for written substantiation (FTC). The FTC also points out that averages and gross sales figures can hide what a typical owner actually earns after expenses.
Talking to owners
The FTC calls conversations with current and former franchisees potentially the most reliable way to check a franchisor's claims, and suggests asking about total investment, time to break even and the support they received (FTC).
Professional help
The FTC recommends having an accountant and an attorney experienced in franchise matters review the documents before you buy. The SBA's guide on buying a franchise covers similar ground on evaluating costs and agreements (SBA).
My franchise checklist, in plain English
Before buying any franchise:
- Run the fad scorecard. Is the demand repeat, or is it a moment?
- Count nearby locations. Too many, too close, too fast is a warning sign.
- Get the FDD and take the time. Use the full review period.
- Read the costs and the contract terms. Know exactly what you're paying and what you're getting.
- Ask how any earnings figures were calculated. And remember estimates aren't guarantees.
- Call owners. Not only the ones the seller suggests.
- Get professional advice. An hour with a franchise attorney is cheap insurance.
- Walk away from pressure. Good opportunities allow time to think.
▸ Why this matters for new owners
In my advisory work on SDG 8 & 9, I push for more people to own businesses and for lower barriers to getting started, in line with SDG target 8.3 (UN). Franchising is one of the most common paths into ownership. Clear disclosure helps buyers choose well, and it protects the honest franchisors who are competing against hype.
FAQ: franchise fads and franchise scams
Is frozen yogurt a good franchise?
It depends on the location, brand and competition. Frozen yogurt has gone through two boom-and-bust cycles, so buyers should check local demand and saturation carefully.
What is a franchise fad?
A franchise built on a short-term trend, where demand is likely to fade or competitors can easily copy the product.
What is a Franchise Disclosure Document?
A document franchisors must give buyers under the FTC's Franchise Rule, at least 14 days before signing or paying, with 23 Items covering costs, litigation, contracts, franchisee contacts and financials.
How do I avoid franchise scams?
Get and read the FDD, verify any earnings claims, talk to current and former owners, get professional advice and walk away from pressure.
Buy the demand, not the trend.
What does Robert Nikic think of franchise fads?
Robert Nikic thinks franchising itself is a valid path to ownership, but franchises built on trends, like frozen yogurt during its booms, carry high risk. He recommends judging demand first and using the FTC's disclosure process to check everything else.
This article is general information, not legal or financial advice.
Related reading: Robert Nikic Reviews the MrBeast Amazon Deal · Robert Nikic Reviews Amazon Dash Buttons · Robert Nikic on Business Scams: 7 Questions to Ask First · Is a Franchise Legit? A Franchise Buyer's Checklist
