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Summer 2006 Aloha, Sales!

Years ago, as a food-and-beverage consultant to companies that produced outdoor festivals and special events across the US, Michael Haith routinely heard complaints from festival-goers that the food and beverage options at the events left something to be desired. So Haith took notice in 1997, when he spotted a vendor at the Utah Arts Festival with a seemingly unending line of customers for fruit smoothies. Not only did he watch huge lines form at the Maui Wowi cart during all four days of the event, he also noticed that customers kept coming back for more. Clearly, the smoothies—a tasty concoction of fresh fruits, fruit juice and homemade nonfat yogurt—were just what consumers had been yearning for.

Haith was so convinced that Maui Wowi had hit on the right formula that he bought into the business, signing on as a partner in 1998. Because the company’s founders, husband-and-wife team Jeff and Jill Summerhays, had been operating solely in Utah, Haith saw an untapped potential for growth and expansion. Maui Wowi immediately began offering cart franchises, which “took off right away,” recalls Haith, who now serves as CEO and Big Kahuna.

Less than a decade later, Maui Wowi has about 300 franchisees in 43 states and another 125 company-owned and -operated locations. But that doesn’t mean a Maui Wowi franchise is easy to secure. The company receives 13,000 applications a year and grants just 125 franchises—fewer than one percent.

Despite the fact that everybody “wants in,” the company recently redoubled its efforts to help franchisees run their businesses better. The company introduced the “wingman concept,” where each franchisee receives a mentor within the system—one point-of-contact to help get answers and assistance whenever needed. The turnkey program also provides extensive training, including assistance with location-selection and business-management guidance.

New Products

imageInitially, Maui Wowi used a simple business model: Sell Hawaiian fruit smoothies at carts set up at weekend events. At the outset there were three or four different smoothie flavors, but today that menu has expanded to include flavors such as strawberry banana, passion papaya, mango orange, kiwi lemon-lime, cappuccino, black raspberry, banana banana, and piña colada, among others. As the company grew, Haith saw the opportunity to leverage Maui Wowi’s Hawaiian ties to expand its product line even further.

Rather than limiting the company’s growth by building the brand around its healthy fare, which would have precluded the addition of caffeinated drinks like coffees, Haith instead zeroed in on the Hawaiian connection and added Hawaiian coffees and espressos to the menu, which were a hit. The company’s Hawaiian coffees now include Kona, Maui, Molokai, and Kauai blends. A chilled coffee line, called Maui Wowi Chillin’, features flavors such as Kona, Mocha, Cookies and Cream, Chocolate Chunk, and Chai Chill. Maui Wowi also added a line of hot cocoa, Hot Koko, and will soon introduce a new gourmet lemon drink.

And the company’s Hawaiian focus goes beyond its delicious drinks to include its corporate culture. Employees and franchisees sport Hawaiian shirts, greet customers with an enthusiastic “Aloha!” and take pride in offering their customers a true Hawaiian experience that emphasizes customer service and satisfaction. “We want to provide a break from the work world,” explains Haith. “We want customers to be able to step out and have something different.”

Those customers span the spectrum from high school and college students—a generation that truly appreciates products and services that aren’t “mainstream”— to business people to stay-at-home moms (or dads!) who want to take a break and relax with a Chai Chill. Interestingly, Maui Wowi’s hottest markets are not where the sun shines more often; the Northeast and upper Midwest locations have the highest sales.

Mobile Sales

imageNo matter where they’re located, all of Maui Wowi’s franchisees are willing to go where the customers are—and sell, sell, sell. In Kalamazoo, MI, business partners Scott Suryan and Justin Lieser approached Western Michigan University about placing two of their six Maui Wowi carts on campus during the week, where they would have access to 26,000 students.

Although most Maui Wowi franchisees operate at weekend events, it was obvious to Suryan and Lieser that demand for their products would be highest during the school week. That worked well for them, since the arrangement left them free to sell at area weekend events like the NASCAR races at the nearby Michigan International Speedway, or provide catering at private events like bar mitzvahs and weddings.

Because franchisees are not given protected geographic territories, but instead lay claim to particular events, the duo worked hard to book events in and around Kalamazoo. “We did every event we could, to stake out those events as ours,” explains Suryan. He and Lieser were successful because they were willing to pick up the phone and make call-after-call to event organizers to negotiate space.

Starting from scratch in 2004, Suryan and Leiser made those calls, and soon had a full calendar. “We think of events in terms of dates,” Suryan explains. “From January 1st through September 30th, we had 450 dates using six carts. Each cart did about 75 dates.”

One secret to their success is mixing both indoor and outdoor events, so that despite any inclement weather, at least some of their carts will do well. And the selling season “doesn’t stop when the snow flies,” Suryan says. “We just go indoors—to wrestling tournaments, cheerleading competitions and gymnastics events.”

Suryan and Lieser and a team of six part-time employees—all “college kids”—staff the carts. When they need additional manpower, for things like huge sporting events, Suryan calls on church groups or high school booster organizations. These organizations provide volunteer workers in exchange for a percentage of the revenues generated at the event, paid to the organization they support. Access to these groups gives the company the flexibility to participate in additional events that come up, or to scale back staffing if an event’s attendance ends up lower than anticipated.

Flexibility of scheduling is one of the biggest advantages of becoming a Maui Wowi cart owner, Suryan says. Franchisee Jason Sorrells of Dallas, TX, echoes those sentiments, adding that the ability to move his cart if traffic patterns change is a major advantage of working with Maui Wowi.

imageSorrells started as a Maui Wowi franchisee with one cart in 2002, doing business as We Cater Paradise. He now has seven, staffed by two full-time employees and fifteen to twenty additional workers as needed.

Sorrells participates in 275 to 300 events a year, 90 percent of which occur Thursday through Sunday. “We do a lot of conventions, sports arenas, outdoor festivals, soccer matches and NASCAR events at the Texas Motor Speedway,” says Sorrells. However, he explains that the biggest events aren’t always the best events in terms of sales. “Sometimes the smaller ones are better” because there’s less competition from other vendors, he says.

Most event producers take a percentage of revenues generated, explains Sorrells, ranging from 15 to 20 percent for festivals and 30 to 40 percent for sports arenas. Although that may sound steep, he prefers shared-revenue arrangements to flat fees because the event organizer then has a vested interested in helping Maui Wowi succeed. “They’re essentially partnering with us,” says Sorrells. With year-over-year sales increasing at each venue, the strategy seems to be working.

“The cart is all about taking the mountain to Mohammed,” says Haith. “It’s about going where people gather.” Running a Maui Wowi business is more project-oriented than the typical retail location, he says. Maui Wowi’s focus is on booking events and working hard and fast for short bursts, versus running a traditional retail storefront, where day-to-day customer relationship-building is key. Haith says his best-selling event was the three-day Cherry Creek Arts Festival in Denver, when sales reached $85,000. A more typical day, he says, is $2,000 to $5,000 in sales.

Although Maui Wowi has received a number of notable honors, such as being named Entrepreneur magazine’s #1 “juice bar” franchise in 2005, and landing a spot on the coveted Inc. 500, many involved with Maui Wowi believe the company is just beginning to hit its stride.

In the next five to ten years, Haith envisions the company becoming a global organization with thousands of units in place, many of them company-owned. He also believes the Maui Wowi brand will be well recognized in a variety of countries, with legions of raving fans sipping tasty drinks. And since they’re already lining up, Maui Wowi will be ready with a hearty “Aloha!”

Marcia Layton Turner -- Turner writes frequently for business publications. Her work has appeared in Business Week, Business 2.0, MyBusiness and numerous trade magazines. She is also the author of Emeril! (John Wiley & Sons, 2004).

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