In the early 2000s, Thomas Nieto began his career as an AT&T technician and subsequently invested in a few smartphone repair businesses, which he turned into a franchise called In and Out Smart Repair. The firm was the third-largest U.S. network of cellphone repair shops in 2015, with 78 sites.
Now, Nieto, 37, is using the principles he gained franchising repair businesses in his most recent business endeavor — Main Squeeze Juice Co., which sells cold-pressed juice and smoothies at 27 locations across the South, with 100 additional locations in the planning and development stages.
Nieto, a native of Metairie, oversees fifteen staff at the company’s headquarters on Tchoupitoulas Street. The company’s total systemwide revenue is close to $20 million. He got down to discuss the origins of his company and the keys to franchising success in the post-COVID economic climate.
The interview was modified for length and clarity.
How did a cell phone repairman get into the smoothie business?
In 2017, we sold In and Out Repair, and I began searching for my next enterprise. When I was in Lake Charles with a prospective vendor, he requested that I visit his sister’s new smoothie and juice cafe. I complied with the request and was instantly astonished. I could not believe I was drinking something so nutritious and delicious.
That day, I left Lake Charles and contacted my brother-in-law, who is now my business partner and main legal counsel, and said, “Bro, we’re getting into the juice business.”
So you wound up purchasing a pre-launch smoothie business in Lake Charles?
Mostly, yes. We established the franchise business initially. The folks we purchased from, Matt and Miranda Duplechain, did not yet own the intellectual property for Main Squeeze, so I discovered the person who owned the name’s rights, purchased them, and then created the franchise business and entered into a license agreement with Matt and Miranda.
We established an operational agreement and began licensing within four months. It has been a fantastic adventure, despite the rapid pace of events.
What is the physical footprint?
We mostly operate in the South and intend to expand. We’ve sold the full state of Arizona, therefore it will have 30 places. We are developing numerous additional sites in Texas, where we currently have fifteen. We are in Florida, Mississippi, Missouri, working on a multi-unit deal, and Louisiana.
How can you maintain a successful franchise operation, which is one form of company, while focusing on a specialty drink business, which is entirely another type of business?
You begin by focusing on what you’re franchising, as you cannot franchise something you don’t have. First and foremost, we focused on understanding the operation in Lake Charles and learning the ins and outs of the business, as well as simplifying and scaling it.
Equally crucial was the fact that Matt and Miranda had produced around 90% of the recipes and partnered with the industry’s top chefs. This made an enormous impact.
How fierce is the competition in your industry?
It is a rapidly developing and expanding sector, and the players that are doing things the correct way will continue to thrive. People were more attentive to what they consumed between 1990 and 2000, and this tendency has been maintained. There is an increasing need for better, more wholesome foods
In what category do you fall? Who is your primary rival?
We are in the cold press juice/smoothie sector, which I would classify as the healthy subcategory of QSR, or quick-service restaurants. This is not comparable to Smoothie King or Planet Smoothie. We are truly not in competition with them. Our clientele does not frequent Smoothie King.
The price of fresh vegetables must make it a difficult business, and your profit margins cannot be that high.
Irrespective of your location, this is a difficult moment for all eateries and brick-and-mortar enterprises. The cost of items has increased. The aftereffects of COVID and the supply chain continue to have an influence on logistics. There is a small amount of respite, but the situation remains difficult.
10% to 20% profit margins are typical for franchised restaurants. Hence, when food expenses increase by 10%, profits decrease. In April of last year, we ultimately increased our pricing by 10 percent, which helped, but has had an effect on our frequency and traffic.
I will remark that we have done an excellent job withstanding the storm. Some networks lost fifty percent. We have not had to close a store. We were required to pivot and adapt.
A decade ago, fro-yo bars were popular, followed by cupcake bars. Are smoothies and juice bars with cold-pressed juice a fad?
I believe it is a trend as opposed to a fad. It is not going away. People are becoming increasingly aware of what they consume. The parents are attentive. We sell fruits and vegetables that have been made to taste delicious. I feel as though we are in a fantastic environment, in a great location, and at the appropriate moment.
What lessons have you applied to Main Squeeze that you learned while franchising your cellular business?
So many, but if I’m being absolutely frank, the most important thing I’ve learned is what not to do. Secondly, you must associate with the appropriate individuals (franchisees) who share your enthusiasm and are genuinely aligned with your beliefs, or they will abandon you when the going gets bad – and it will get rough.
We made mistakes with individuals who were financially eligible but were not a good match in the cellular stores. Additionally, we may have grown too quickly with some of those stores. We were occasionally too hasty to approve a franchisee’s site and insufficiently strategic in determining whether it would provide sufficient exposure or access.
I now spend over $100,000 a year on big data and analytics for our locations because you cannot place these items in the incorrect location. These are not ice cream parlors. They cannot be rolled off.