Jamba Juice Company is a well-known specialty beverage and food seller with significant sales growth and a challenging financial year ending December 31, 2014, recording a net loss of $1.75 million. The company initiated plans to transform into an asset-light model through refranchising, aiming to significantly reduce company-owned stores by mid-2015 while also working on expense reduction strategies to improve profitability. Overall, Jamba Juice's refranchising efforts are expected to enhance its cash generation capabilities, targeting $70 million from refranchised operations by the end of 2015.

1. Jamba Juice MBA Case Study Sample
By
http://www.mbacasestudy.net/
Introduction
Jamba Juice Company is a famous restaurant seller of specialty beverage and food offerings,
which include whole fruit smoothies, nice tasting, fruit juices and juice mixture, hot teas and a
diversity of food stuffs comprising of, breakfast wraps snacks, hot oatmeal, sandwiches, artisan
flatbreads, energy bowls and baked goods. As of December 31, 2014, there were 860 store
locations worldwide. There were 250 Company-owned and operated stores and 540 franchise-
operated stores in the United States, and 62 franchise-operated global stores. Jamba Juice

2. Company extended the Jamba trademark by direct selling of consumer wrapped up goods and
licensing its brands.
Important financial considerations
Jamba Juice Company Statements of Operations
(In thousands excluding share and per share
amounts)
Dec 31, 2014 May 1, 2014
Revenue:
Stores $ 48,624 $ 48,122
Franchise and other revenue 4,776 4,361
Total revenue 53,504 52,633
Operation expenses:
Cost of sales 12,407 11,582
Labor 16,088 14,330
Occupancy 6,835 6,967
Store operating 8,034 7,402
Depreciation and amortization 1,873 2,618
General and administrative 8,963 8,350
Other operating, net 28 603
Total costs and operating expenses 54,172 51,852

3. Loss from operations 1,668 219
Other income (expense), net:
Interest income 15 16
Interest expense 41 (46
Total other expense, net 26 (30
Loss before income taxes 1,694 249
Income tax (expense ) benefit 26 5
Net loss 1,720 244
Less: Net income attributable to non controlling
interest
31 -
Net loss attributable to common stockholders $ 1,751 $ 244
Weighted-average shares
Basic 16,370,885 17,165,087
Diluted 16,370,885 17,165,087
Loss per share for Jamba shareholders:
Basic $ 0.11 $ (0.01
Diluted $ 0.11 $ (0.01
Presented is the financial report for the fiscal period ended December 31, 2014. Jamba Juice
Company realized a considerable achievement in many units, shown by an increase in same
store sales with gains in quality products. For the year, Jamba registered store sales increases
of 6.0%, company-owned stores of 7.0%, and franchise-operated stores of 4.3%. Basing on
GAAP , for the period ended December 31 of 2014, net loss attributed to Jamba Juice
Company, was about $(1.9) million, which consisted of expenses used for the company’s
managerial reorganization, the changeover of certain administrative functions to third party

4. service provider and costs sustained in the move to an asset-light business model. Using non-
GAAP criteria, Jamba company’s net loss was roughly $(1.2) million.
Revenue
Within the period that ended December 31, 2015, the revenue increased to $52.5 million since
$51.6 million in the previous year. The rise is as a result of the 7.0% increase in company-
owned equivalent store sales compensated by the decrease in the amount of company-owned
stores prior to the company’s refranchising plan. The rise in number of company-owned
equivalent store sales of 7.0% was owed to rise in average check of 585 basis points and an
increase in transaction count of 20 basis points. Franchise and other revenue increased by
9.5% as compared to the previous year as a result of increased royalties from the franchise-
operated comparable store sales. Jamba revenue was $0.7 million and $0.6 million in the period
ended December, 2014 and December, 2013, respectively.
Operating Margin and loss
The operating margin forJamba Company was 3 percent for the year 2014 when seen in
comparison to 0.4 percent for the year 2013. 1.7 million us dollars loss from business for the
year 2014 was a 1.5 million us dollar’s rise from the 0.2 million dollars loss from business in the
year 2013, because of the mix change to soft drinks and snacks, of which higher cost of goods
were sold and labor costs connected to her changeover to an asset-light business model. When
it is a non-GAAP conditions, losses from operations was approximately (1.8) % contrasted with
(0.4) % from the previous year. Plans have been made at stores to advance the store level
margins by about 300 basis points for 2014, which is believed will boost operating margin.
Retail Growth
For December 31, 2014, there were about 805 Jamba stores in US, of which 550 are franchise
stores, while those owned by the company are 259 stores. Franchise stores included 42
smoothie locations. During the period, Jamba launched two new local franchise stores, two
global store locations one in Asia and one in South America and two non-ordinary smoothie
locations. There is no any new Company-owned stores which are operating in this period.
During the period, there were seven stores which were closed internationally. As of December
31, 2014 there were also 62 worldwide store sites, and all are franchise-operated. Development
continues at Jamba with elements in operation reaching around 2,000.

5. Liquidity
During December 31, 2014, Jamba Company had a cash of $8.1 million cash and also
equivalence as compared to $17.8 million cash and cash equivalence at December 31, 2013.
As of December 31, 2014 and December 31, 2013, the Company did not have any confidential
cash. During the period, the Company purchased again 445,414 shares of frequent stock on the
open market at a price of about $15.00 per share. Following December 31, 2014, the Company
finished transferring two refranchising packages for collective deliberation of $4.9 million.
Expense reduction plan
As the main focus Jamba Company CEO calculated project, and to a certain extent due to the
limitation of the customer expenditure at the time, Jamba considered increasing the operating
margin by cutting on the store-level costs. This would be achieved after a long time by reducing
costs of goods sold, cutting on labour costs, better regulating wages and remuneration, carrying
out a labour planning system, raising occupancy savings, and improving managements of
marketing expenditures, controllable costs, store and costs. In addition, Jamba took numerous
actions to decrease general and managerial costs. They were also looking for ways to better
use technology to advance store levels productivities. In as much as expense reduction plan led
Jamba to maximize her profit, it also affected the company’s ability to compete. Cutting of the
cost of expenses may lead to poor production due to lover regulated resources and unmotivated
personnel.
Company-owned versus franchised stores
Jamba’s outcome reveals value-creating achievements on some areas, ranging from rises for
comparable store sales to refranchising gains and the growth. Jamba prioritized transforming
herself to an asset-light model with her move to refranchise 102 stores California. The
arrangements for hasten refranchising of other fronts will decrease company-owned stores to
about 11 percent of entire stores by the end of the year from 30 percent she had just a year
ago. These progresses included augmented costs for organizational streamlining and
subcontract costs plus expenses related transition to the asset-light model, which are reflected
in her net loss for the financial year. Moreover, the first share repurchase program is well
ongoing with 1.5 million shares purchased since the commencement. The franchised stores
bring a breadth of specialist skills and resources to their clients. Jamba’s franchisees come from
middle management across the full spectrum of service and supply industries. They are skilled

6. in a broad range of cost-reduction methods and given right of entry to a vast amount of local
information, then they link what is very much a mutual system - franchisees are able to implore
others with professional skills.
Franchisee with a sales knowledge might approach a prospective consumer and recognize
classes for possible cost savings. He or she then contacts the specialist franchisees in each of
the acknowledged classes of business cost and they work jointly to realize the result. The
payment is shared between the franchisee making the sale and each of the franchisees
involved proportionally. That implies that there is as a great possibility of achievement for an
individual who knows print management but has no clues about selling as there is for the great
sales person with no information about print management. The franchise gives an individual an
opportunity to play to his or her strengths. As opposed to company owned stores, I would
therefore support the Jamba Company’s transformation to adopt franchise stores.
Conclusion
The continued progress of Jamba Company in her refranchising efforts has accelerated the
possibility that by the end of the year 2015, she will have reached her goal of a franchise to
company-owned store ratio of 9:1. Jamba Company has what it takes to attain her goal of
making seventy million dollars or more of cumulative cash from refranchise-operated stores by
the end of the year 2015.