Only four years after starting Fuzzy Peach Frozen Yogurt, co-owners Jason Nista, Rocco Quaranto and Wells Struble have sold it to a national frozen yogurt franchisor.

Henderson, Nev.-based U-Swirl International paid $481,000 in cash at the Feb. 19 closing date, according to a news release from U-Swirl. An additional earn-out provision in the sales agreement could yield as much as $349,000 more to the Fuzzy Peach creators, based on royalty income generated by Fuzzy Peach stores over the next twelve months, the release stated.

U-Swirl now owns 286 franchises in 38 states, adding Fuzzy Peach to its existing U-Swirl and CherryBerry brands.

In an interview Monday, Quaranto said that the purchase by U-Swirl involves Fuzzy Peach’s intellectual property and worldwide franchise and license rights, including the rights associated with the 17 currently operating Fuzzy Peach Frozen Yogurt stores. Another 23 franchise locations are in the pipeline, opening as scheduled, Quaranto added.

Within the past year, Fuzzy Peach sold its five corporate stores to local owner-operators, realizing the proceeds of those sales as well as the subsequent sale to U-Swirl, Quaranto said. The new franchisees took over the lease agreements at each location. He did not release the prices for those transactions.

“All our stores are going to have the same locally owned, working-with-local-schools-and-churches model we always have,” Quaranto said. “They are not going to change overnight into a sterile conglomerate franchise, and they are going to retain the same core values that make Fuzzy Peach so great: customer service, fun, inviting atmosphere and high-quality product. We’ve trained our employees to understand those core values and that sets us apart. Those things are not going to change. Customers should see no change at all. It will be the same name, the same store owners.”

Nista confirmed that Fuzzy Peach would remain Fuzzy Peach “for the foreseeable future.”

Quaranto said that U-Swirl had approached the Fuzzy Peach owners a few years ago, but he and his partners weren’t ready to sell.

Asked what attracted U-Swirl to Fuzzy Peach, Quaranto said, “I think, honestly, it was our brand, which is so well recognized in the Southeast. U-Swirl didn’t have a lot of locations in the Southeast, especially in North and South Carolina, mainly because we own [the territory]. They’ve been in California but hadn’t made it here. They recognized our brand and respected it enough to actually go into lengthy discussions with some 20-somethings.”

The U-Swirl news release underscored the importance of Fuzzy Peach's territory.

"This acquisition provides us with increased exposure in the southeastern U.S., where we aim to increase our presence and operating efficiencies,” said Ulderico Conte, chief executive officer of U-Swirl Inc., parent of U-Swirl International.

Nista noted that U-Swirl’s majority owner is Durango, Colo. – based Rocky Mountain Chocolate Factory  Inc.,  an international franchisor of about 600 retail chocolate stores and a manufacturer of premium chocolates and other confectionery products.  

“We definitely see this as a win-win. For our franchisees, it will be like going from the minors to the majors,” Quaranto said. “None of our stores are closing, and they will remain locally owned and operated.”
Those stores will also see immediate benefits, such as economies of scale and significant corporate support, thanks to U-Swirl’s size and larger purchasing power.

“Fuzzy Peach just went from a 17-store chain to being part of a 286-store chain,” Nista said. “There’s a lot of great potential in the future, and an increase in back office support.”

Quaranto emphasized how much he and fellow Fuzzy Peach creators appreciate the support their venture has received from UNCW and the Wilmington business community. The three were classmates and fellow track team members at the university.

“This [purchase] shows how much Wilmington really gives to small businesses like us. Anytime we needed a hand, tons of people in and around UNCW and Wilmington were able and willing to help us around the next corner,” he said.

What’s in the future for the three young entrepreneurs?

Nista said that they are under contract with the purchasing company for a couple of months to ease the transition, and – free from the day-to-day responsibilities of running the business – will will focus on helping Fuzzy Peach franchisees maximize their success in the coming year. After that, the three aren't saying.

“After this year, it will be like watching your kid grow up and leave the house,” Quaranto said. “We grew it from literally nothing – with the machines in our garage because we had no store yet – to a business that a publically traded company wanted to purchase. It’s a win for us and a win for our franchisees.

“The three of us [owners] are still great friends,” he continued. “We respect and love each other. When the time comes, we will start discussing ideas. I can definitely see us still working together on another venture.”