Frozen Yogurt Business Overview

The frozen yogurt industry consists of shops, kiosks, and other outlets that primarily sell frozen yogurt and frozen yogurt-based treats like smoothies, parfaits, and frozen yogurt pies and cakes. These establishments attract health-conscious consumers by offering a lower-calorie alternative to ice cream while maintaining a dessert-like taste and texture. Frozen yogurt shops typically stock multiple flavors ranging from traditional options like chocolate and vanilla to unique varieties such as green tea or pomegranate.

The most common business models in frozen yogurt shops include:

• Full-Service Shop: Traditional counter service where employees prepare and serve the frozen yogurt with selected toppings for customers
• Self-Serve Shop: Customers dispense their own frozen yogurt and add toppings, paying by weight at checkout
• Mobile Unit: Trucks or carts that serve frozen yogurt at events, festivals, and various locations

Most frozen yogurt stores utilize a self-serve model, where customers can customize their order by choosing flavors and toppings. The self-serve format has become predominant in recent years, requiring less staffing and enabling consumers to control portions. Full-service shops with employees serving customers over the counter still persist but are less common today.

Related: Checklist To Start A Business

How Do Frozen Yogurt Shops Make Money?

Frozen yogurt shops generate their primary revenue through direct product sales, with profit margins ranging from 65% to 85% on frozen yogurt products. Self-serve establishments typically charge between $0.45 and $0.65 per ounce, while full-service locations often price by cup size. The profit margin includes the base cost of the yogurt mix, toppings, cups, utilities for operating and maintaining freezer equipment, and waste. Labor costs in self-serve models are generally lower since customers portion and serve themselves.

Additional revenue sources for frozen yogurt businesses include:

• Additional food items such as smoothies, coffee drinks, or light snacks to complement the frozen yogurt offerings
• Party and event catering services for birthdays, corporate functions, and special occasions where the shop provides frozen yogurt and toppings bars
• Branded merchandise sales including t-shirts, cups, and gift cards
• Wholesale distribution to local restaurants, cafeterias, or grocery stores

Industry Statistics

Frozen yogurt shops are part of the NAICS code 311520, Ice Cream and Frozen Desserts Manufacturing. The frozen yogurt retail market has grown significantly with rising demand for healthier dessert alternatives. Here are some numbers that tell the story of this industry.

Frozen Yogurt Industry Size & Growth: The frozen yogurt industry generated $1.80 billion in sales, with projections showing an increase to $2.46 billion by 2032. The industry maintains steady growth with a projected annual increase of 3.53% through 2032. This growth stems from increased consumer interest in healthier dessert options and the popularity of self-serve business formats. (Fortune Business Insights)

Frozen Yogurt Profit Margin: Gross profit margins for frozen yogurt businesses typically range from 65% to 85%. Net profit margins after accounting for operating expenses, labor, and overhead costs average between 20% to 30%. (Priority Commerce)

States with Most Frozen Yogurt Shops: California, Texas, Florida, and New York have the highest concentration of frozen yogurt shops, with particular density in urban areas and college towns. The warm climate in these regions contributes to the year-round demand for frozen desserts. (U.S. Census Bureau)

Costs To Start a Frozen Yogurt Shop

Starting a frozen yogurt shop typically costs between $100,000 and $400,000. The lower end represents a small self-serve location with minimal equipment, while the higher end reflects a larger shop with multiple serving stations and extensive renovations.

There are several expensive items to consider when opening a frozen yogurt shop. Here are some of the major expenses:

Equipment and Machinery: Frozen yogurt machines cost $12,000 to $25,000 each, and most shops need 4-8 machines. Additional equipment includes freezers, refrigerators, topping stations, and display cases. The total equipment package often ranges from $50,000 to $150,000.

Location and Build-Out: Leasehold improvements for a typical 1,000-2,000 square foot space can range from $75,000 to $150,000. This includes plumbing installation, electrical work, flooring, and counter installation. Many landlords require the first and last month’s rent plus a security deposit upfront.

Initial Inventory: Starting inventory includes yogurt mix, toppings, cups, spoons, and other supplies. Depending on the shop’s size and variety of offerings, the initial stock typically costs between $8,000 and $15,000.

Furniture and Fixtures: Tables, chairs, display cases, signage, and point-of-sale systems generally cost between $15,000 and $30,000. Self-serve locations need additional fixtures for topping stations and weighing stations.

These estimates provide a general idea of startup costs, but actual expenses will vary.

Resources:
International Frozen Yogurt Association