Shake's, Wal-mart Sign Franchise Partnership

BENTONVILLE (Sunday, March 23, 2003) - A new partnership has Shake's Frozen Custard not sweating its locations.

The company signed up in February with Wal-Mart Realty, a division of the Bentonville-based retail giant, as the developer for new Shake's franchise locations.

Wal-Mart Realty's properties mostly are next door to supercenters and make for a great location for Shake's drive-through custard shops, said Corey Osborne, Shake's chief executive and president.

Talk about available traffic.

Osborne said it all started with a Las Vegas development seminar where Shake's and Wal-Mart Realty folks ran into each other. It didn't take long to realize how fruitful a partnership would be.

"Wal-Mart parcels are a good fit for our concept," Osborne said. "It became obvious there was some synergy there potentially."

The Fayetteville-based company is operating on former Wal-Mart parcels in Conway; Joplin, Mo.; San Antonio; and Longview, Texas, he said.

Shake's has 37 stores operating in eight states, with 15 more under construction.

The company expects to have 600 stores operating across the country by 2007.

"Our growth right now indicates we'll hit there," said Jim Buckner, Shake's executive vice president and a former executive with frozen yogurt chain TCBY. "I was with TCBY during the early days up to about 2,500 stores, and I couldn't believe how popular it became and how fast the concept grew.

Almost the same identical thing is happening here."

Last year, Shake's sales were $10.5 million, with a projected increase to $16 million this year, the company reports.

Buckner said the frozen custard has become "almost a cult thing. Not quite a Krispy Kreme, but a little bit like that."

In the meantime, the company expects to unveil its newly styled store on North College Avenue in Fayetteville in mid-May. Construction of the company's new franchisee training facility at the back of the College Avenue store is expected to be completed in November.

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