Summertime is peak smoothie-sipping season, and Jamba (NASDAQ:JMBA) is making it easier for smartphone owners to get in their frosty fruit fixes. The parent company of the 875-store Jamba Juice chain updated its mobile app earlier this month, and a key component is call-ahead mobile ordering.
Jamba Juice has encouraged customers to call in their orders for years, something that comes in handy in the morning, when lines can get long as folks load up on wheatgrass shots, fruit-topped oatmeal, Energy Bowls, and signature smoothies. The updated Jamba Juice app makes it easier, even if mobile ordering is initially an option at just a quarter of its stores.
Jamba is promoting the new mobile ordering app by tapping San Francisco 49ers tight end and Jamba franchisee Vernon Davis for an amusing promotional video. The spot also pitches a discount for first-time users, something that the mobile app will be able to deliver to all users from time to time as promos come out.
Jamba Juice will never be the poster child for convenience. Its stores are mostly tucked away in strip malls where drive-thru service isn't in the cards. If someone is in a hurry, a basic smoothie can be had at a growing number of burger joints and coffee shops without leaving the car. However, Jamba's ability to offer a deep menu of flavor combinations, and efforts to establish Jamba as a wellness brand, will make it stand out from the plain Jane strawberry banana smoothie at Mickey D's.
This doesn't mean that Jamba can't use the boost. Its last quarter was a bust, with systemwide comps falling 3.9% since the prior year. The good news is that Jamba is still targeting positive comps -- up between 2% and 4% -- for all of 2015, and beyond. How well it fares during the current quarter will go a long way to dictating if it meets those goals.
Jamba is in the process of transforming itself into an asset-light company. It continues to handover company-owned stores to proven franchisees, and now, less than a quarter of Jamba Juice stores are company owned. Earlier this year, it stated that its goal is to have 90% of its stores run by franchisees by the end of next year.
The shift to more of a franchisee model will sting top-line growth, but ideally, it will be offset by improving margins and headier expansion. Jamba's goal is to have franchisees open at least 100 stores a year, lowering its capital expenditures and G&A costs as a percentage of sales along the way.
It will be a rewarding plan for shareholders if it pans out. We know that any hiccups in concept popularity will stall franchisee investments. There's a lot of space in the middle, but that's why you have to blend things to see how all the ingredients come together.
Rick Munarriz owns shares of Jamba,. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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