While it is being sold, Clean Juice is experiencing supply issues

Clean Juice operators fear they won’t have access to branded juice. | Photo by Jonathan Maze.

Operators of the Clean Juice franchise learned last week that the company was being sold to Friendly’s owner Brix Holdings, but they were more concerned about another piece of news: They would soon have trouble getting juice.

According to franchisees and copies of communications shared with Restaurant Business, the company lost its contract with Sysco. The contract covers about 80% of the food and paper supplies operators use for their businesses, including bottled juices, operators say.

“Our name says juice,” said an operator on condition of anonymity. “We can’t get juices, what should we do?”

The company has since entered into an agreement with Sysco on a non-wholesale contract to supply franchisees in the coming weeks, but it is uncertain how long they will have access to the private label juice the chain is known for. And it raises prices for franchisees already struggling with high costs and low sales.

“Our stores will continue to be served by Sysco without any material disruption to their operations due to our closure with Brix Holdings,” Landon Eckles, co-founder of Clean Juice, said in a statement to Restaurant Business. “I cannot speak for them on their plans for Clean Juice’s supply chain going forward, but as an experienced and sophisticated franchisor of many other brands requiring similar services, I trust they will make the right decisions going forward. ”

A Brix representative declined to comment on the end of the contract and referred questions on the subject to Clean Juice.

The end of the Sysco contract exacerbates Clean Juice’s problems in the run-up to the sale. The brand was founded in 2016 and grew rapidly with a business model where operators operated cold-pressed juices on-site.

It sold many franchises, even during the pandemic, and had deals with former NFL players Tim Tebow and David Tyree.

Yet operators were unable to generate profits. The brand then switched to pre-bottled juices at the end of 2022. The juices were sold at lower prices and lower profits, and this move eliminated one of the franchise’s main business models and the reason many franchisees joined the system.

This move exacerbated operators’ financial losses. Clean Juice operated 135 locations at the end of 2022, according to the company’s franchise disclosure documents (FDD). According to the most recent FDD, there were only 113 in October last year. The brand’s sales announcement stated that the chain had 75 locations.

More than 50 operators have taken the company to arbitration to get out of their franchise agreements.

A Brix representative suggested it does not expect other operators to leave the system.

“We believe that a majority of franchisees who wanted to leave the system have already done so and we are engaging with the remaining franchise community to better understand and support their business in the future,” said Sherif Mityas, CEO of Brix , in an email. rack. “We fundamentally believe in the Clean Juice model and look forward to accelerating their growth in the coming years.”

Clean Juice’s remaining franchisees were notified in early April that their contract with Sysco expired on March 31.

In that email, seen by Restaurant Business, the distributor imposed a 5% increase on the margin it receives on supplies deliveries to Clean Juice operators. Clean Juice said the increase “surprised us.”

The increase was partly due to the decrease in the number of cases delivered to Clean Juice operators. Sysco also had a “significant amount of dead stock” due to “poor compliance” or because some products had expired.

The deal with Brix was announced last week. But at the same time, operators were told by Sysco that their locations were no longer covered by the Clean Juice deal. Operators could obtain supplies, but only through a ‘street account’, and this raised questions about patented products that still exist.

For operators who were already struggling to make money, those costs were difficult to bear.

Clean Juice VP Supply Chain Scott Brainard then told operators that the company was aware of the situation and that the brand was “working on multiple solutions.”

“In the very near term,” he wrote, “we encourage you to order as much cold press juice/shots/milk products, frozen fruit, and branded cups and lids as you can store and sell over the next four to six weeks.”

However, many franchisees do not have the storage capacity for that many products.

A subsequent email to franchisees indicated that “nothing will change until May 10 at the earliest,” but that prices will change. This means that the non-wholesale contract between Clean Juice and Sysco would cost more.

The email also indicated that the company was “working on a plan to supply each store with what they need in cold press to last the coming weeks.”

Still, it was uncertain how long Sysco would have the company’s branded juices available. Sysco will continue to sell them until supplies run out. “We are working on a plan to get these products to you,” Brainard said. “It will either still be through Sysco, or we can switch broadline partners.”

Members help make our journalism possible. Join Restaurant Business today and unlock exclusive benefits, including unlimited access to all our content. Register here.