One to Watch: 16 Handles
The Big Apple’s first self-serve frozen-yogurt concept may be a New York City brand, but it has its roots planted on the West Coast. Founder Solomon Choi learned the quick-service ropes while working for a gelato concept in his native California.
“That’s how my exposure to frozen desserts started in 2005,” he says. “But I began to notice an increase in the popularity of frozen yogurt. The idea for a self serve came from a family friend.”
That friend operated America’s Cup in Costa Mesa. “It was a one-unit neighborhood gem started in 1988,” Choi says. “I reached out and said, ‘I don’t want to spy, and I won’t open a store near you if you teach me how to do this.’”
Choi learned the business, but decided the frozen-yogurt market in California was too crowded. “Dessert is a great platform—very social and fun,” he says. “I had the idea to turn it into a lifestyle brand, but I couldn’t do that in Southern California.”
So Choi hit the pavement looking for the right location. “I walked from Chinatown to Times Square so many times,” he says. “I needed to understand traffic patterns and was warned just being on the wrong side of a street can cause a business to fail.”
Founder/CEO: Solomon Choi
HQ: New York City
Year Started: 2008
Annual Sales: $41.9 million
Total Units: 33
Franchise units: 23
Believing he’d strike gold with a younger crowd, he planted his first store near some New York University dorms. It opened in 2008.
“Some called it crazy because I had eight direct competitors in three street blocks selling frozen yogurt, gelato, and ice cream,” Choi says. “I was the only one doing self serve though, and I could see there was clearly a demand for frozen dessert in the area. I just had to be better than everyone else.”
Today, only three of those eight competitors are still in business.
“Word-of-mouth advertising really created a buzz,” Choi says. “People were driving in from other boroughs and New Jersey to come to 16 Handles.”
Over the past five years, 16 Handles has gained a firm hold in New York, both in the city and state. It’s also added locations in New Jersey, Connecticut, Florida, Maryland, and, most recently, Massachusetts. Choi says continued growth is in the works for the East Coast, including in Washington, D.C. His goal is to have 75 stores open by the end of 2013 and a total of around 200 stores in three years.
“But we measure success on how well we perform in the market, not on the number of units,” Choi says. “Our goal is to continue to grow within the Northeast strategically, not sporadically all over the country.”
Wherever customers encounter a 16 Handles, they are greeted with 16 flavors of frozen yogurt and more than 40 toppings. There is always a mix of no-sugar selections, nondairy sorbet selections, premium low-fat selections, and seasonal flavors.
“We used to do a handle of the month,” Choi says. “But now we’re featuring a flavor every six to eight weeks because we were moving too fast. By the time some people found out about a flavor, it was on its way out. Now what we’re doing is more successful, and we’re getting more data and feedback on our featured flavors.”
Staples like vanilla and chocolate are always available, and some of 16 Handles’ signature flavors have become so popular they can’t be removed without public uproar. “We have a proprietary salted caramel that people love, and people go crazy when we run out of our graham-cracker flavor,” Choi says.
Priced at 49–52 cents per ounce, depending on location, an average creation at 16 Handles is $6.
As customers dispense frozen yogurt into their cups, they can also read the nutritional information about the flavor they chose on a screen near the handle. Choi says he likes to incorporate technology wherever possible, from dispensing yogurt to dispensing information.
“Social media really works well as a marketing tool for me,” he says. “It eliminates the guesswork. How do I know what people like? I ask them. And I can talk back to them.”
And Choi says he doesn’t just talk back; he makes sure 16 Handles gives back, too.
“Since day one, we’ve been supporting Trees for the Future,” he says. “Every store that comes on board agrees to support the planting of 16 trees a day.”
16 Handles also uses cornstarch spoons and biodegradable cups and tries to compost or recycle whenever possible.
“That didn’t have the cost efficiency in the beginning that it does now,” Choi says. “Each one of those cups and spoons was expensive, but I wanted to build a brand, and to do that we had to set ourselves apart.”
Then there’s the name. Sure, it’s called 16 Handles for the number of handles customers can pull to dispense frozen yogurt, but it’s also a nod to a favorite movie and treat from Choi’s youth.
“Growing up as a child of the ’80s, ‘16 Candles’ was one of my favorite films,” he says. “Plus, the name was driven by my own experience growing up on the West Coast. We had 31 Flavors, and before I could even read words, I could read numbers and I knew what that 31 meant. The power of being able to own a number is universal; it’s global. And 16, wow, that’s a lot of choices.”
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