David Rutkauskas’ FRESHBERRY Franchise Closures [UPDATED]
Originally published March 5, 2015
In the early 2000s, Tulsa franchise seller David Rutkauskas created the illusion that the franchise concepts under his Beautiful Brands umbrella were highly successful and growing.
With the help of eager local publications, like Tulsa World and The Journal Record, and restaurant industry trade publications like QSR & Fast Casual, Rutkauskas was able to publish exaggerated expansion numbers in press-releases dressed up as legitimate news.
One of Rutkauskas’s favorite techniques was to sell a franchisee the option to open a number of units in a given area, and then count those options as franchises that were “in development.”
This created the illusion of growth that far exceeded reality.
Partners in Illusion: How Local & Trade Media Helped Rutkauskas Sell the Dream
FreshBerry frozen yogurt franchise opportunity was aggressively marketed and sold by David Rutkauskas & Beautiful Brands International (BBI).
News stories created the impression that BBI’s Freshberry Frozen Yogurt Cafe was hugely successful, with more than 1,000 locations being actively developed worldwide.
In reality, we believe that Freshberry never opened more than 35 or so U.S. locations, and many of those closed within a few years.
Adding to the exaggeration was the fact that many that they counted as full locations were actually co-branded with Smallcakes cupcake franchise, as neither seemed to be viable on their own.
As of 2021, but three Freshberry-branded stores have closed or rebranded, and its likely they have no contact with the franchisor.
On November 30, 2010, The Journal Record stated:
“There are now 35 FreshBerry Frozen Yogurt Cafes open, 12 under construction, and more than 1,000 units in development in Oklahoma, Colorado, New Mexico, Kansas, Missouri, Arkansas, Texas, Louisiana, South Carolina, California, Arizona, New York, Nevada, Florida, Saudi Arabia, Bahrain, Qatar, Kuwait, Oman, the United Arab Emirates, Jordan and Egypt.” (“Freshberry to open in Portugal, Venezuela”)
As of 10/14/21, it appears that out of a total of 31 U.S. franchise locations, 28 Freshberry locations have closed and only 3 remain open.
Some of the most recent closures had been listed for sale, unsuccessfully, at prices well below the estimated start-up costs of $165,750 to $386,200.
In our opinion, Beautiful Brands did a masterful job getting publications such as Tulsa World, QSR & Fast Casual to promote FreshBerry as a franchise success story.
However, it appears to UnhappyFranchisee.Com that BBI has sold hundreds of FreshBerry franchises that have not opened – and never will.
Of course, we are drawing this information from publicly available sources (the company franchise disclosure document, websites, articles). We have asked the company for verification of accuracy and completeness, but have not yet heard back from them.
Nearly All FreshBerrys Franchise Locations Closed Prematurely
According to the 2012 FreshBerry Franchise Disclosure Document, the total investment necessary to open a FreshBerry franchise unit is $165,750 to $386,200, including a $25,000 franchise fee and a $5,000 to $6,000 for materials, payable to BBI.
Each FreshBerry franchise closure potentially could represent the loss of the approximately $165,750 to $386,200 initial investment, and also the capital added while trying to keep the business open, a settlement with the landlord on the remaining lease term, and other expenses and liabilities. It could mean personal bankruptcy and loss of assets and credit scores for the franchisee.
Investigation by UnhappyFranchisee.Com has revealed that the number of FreshBerry franchises that have closed has reached the number that are open:
|FreshBerry Stores Open (US)*||Freshberry Stores Closed (US)*|
NC Raleigh (Hillsborough St.)
|AZ ScottsdaleCA Bakersfield…
CA Carson City
FL Bradenton (new owner)
FL Miami (Flagler St.)
FL S. Miami (SW 57th Ave)
IL Chicago (E. Ontario)
NC Raleigh (Six Forks Rd.)
NC Wilmington (Market Street)
NC Wilmington (Univ. Commons)
OK Tulsa (11085 S. Memorial)
SC Mount Pleasant
SD Rapid City
TX Dallas (Park Lane)
TX Houston (Vintage Pk Blvd)
TX Farmer’s Branch/Dallas
Hundreds of FreshBerry franchises were reportedly sold, but not opened
For years, we have read the gleeful announcements of huge expansion deals and franchise packages sold by Beautiful Brands, yet haven’t seen much about the franchise units ever opening.
On 12/23/09, QSR wrote that BBI announced that it would be expanding into Virginia & Maryland through a 100 unit franchise expansion deal.
“Virginia and Maryland are a big part of our overall expansion strategy,” David Rutkauskas, Beautiful Brands founder, president, and CEO, was quoted as saying.
As of 1/10/13, the number of FreshBerry locations open in Virginia and Maryland is 0.
April 1, 2010, BBI announced a franchise deal to open 275 Freshberry franchises and 275 Rex’s Chicken franchises throughout throughout Oklahoma, Colorado, New Mexico, Kansas, Missouri, Texas, and Arkansas.
“Without a doubt, this is the largest deal in BBI’s history,” David Rutkauskas told QSR magazine. “The appeal of both concepts tops the charts as golden opportunity franchises and solid investments in two clearly defined industry segments.”
As of 1/10/13, the number of FreshBerry locations open in Oklahoma (1), Colorado (0), New Mexico (0), Kansas (0), Missouri (0), Texas (1), and Arkansas (0) is 2.
Rex’s Chicken has 1 company store in OK, and 0 in the other states mentioned.
6/17/10, BBI announced “a major five-state development deal between BBI and Frozen Dreams Franchise Group (FDFG), which calls for at least 300 new FreshBerry Frozen Yogurt Cafés within Central California, Northern California, Arizona, Nevada, Idaho, and Utah. “
QSR quoted David Rutkauskas as saying “We’re thrilled to be partnering with Frozen Dreams to reach this geographical milestone and continue making our western growth strategy a sweet success.”
As of 1/10/13, two and a half years later, the number of FreshBerry locations open in California (3), Arizona (0), Nevada (2), Idaho (0), and Utah (0) is 5.
In 2010 & 2011, QSR magazine repeatedly reported that Beautiful Brands International had more than 1000 FreshBerry franchises “in development.”
As of 1/10/13, the FreshBerry website lists 16 U.S. Freshberry locations and 26 International FreshBerry locations: a total of 42 locations.
What happened to the more than 958 locations that were announced, then never mentioned again?
UnhappyFranchisee.Com extends its condolences and best wishes to the owners and staff of the closed FreshBerry franchises, and to the investors in FreshBerry franchises that never opened.
* Estimated, as of 4/24/14. We have asked the company for verification of accuracy and completeness, but have not yet heard back from them. Some stores may have gone independent & rebranded rather than closed completely.
ALSO read about CHERRYBERRY Franchise Closures 2012
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TAGS: FreshBerry, FreshBerry Frozen Yogurt, FreshBerry franchise, FreshBerry Frozen Yogurt Franchise, Froyo, Froyo franchise, Frozen Yogurt franchise, Beautiful Brands International, David Rutkauskas, franchise failures, franchise closures, franchise graveyard, Unhappy Franchisee, QSR magazine, Fast Casual, Tulsa World
One thought on “David Rutkauskas’ FRESHBERRY Franchise Closures [UPDATED]”
Freshberry has 12 locations listed on its website, but 2 of those appear to have been closed for many months. Looks like they are down to 10 or fewer – and many of those remaining are either part of a Camille’s Cafe or Smallcakes Cupcakery.
FRESHBERRY CLOSED – Farmers Branch, TX
A F. Dallas, TX 7/30/2014
CLOSED OUT OF BUSINESS AS OF 7/30/14:
7/30/14 drove over this aft at 4p ct and they were closed down and completely moved out, equip and furniture and all. No sign in window, just empty room. Your neighbor Fed Ex said you moved out earlier this morning. Please update and remove your co name from the national website, I’m asking Sams Club for a refund on gift cards I just bought yesterday 7/29/14. It also would be nice if you put a sign in the window for your former customers who supported you to know what’s going on!!!
Veronica S. Dallas, TX 7/30/2014
This location is closed down!
FRESHBERRY CLOSED – Miami, FL
9533 W Flagler St Miami, FL 33174
Cristian S. Doral, FL 2/20/2014
This wonderful place unfortunately closed down, my brother used to work there. It was good while it lasted. (Reason as to why it closed down, the owners are from Venezuela and due to the recent government issues they are having they were forced to close down the business do to lack of funds)
Viviane B. Miami, FL 2/11/2014
I called to check if they were opened and the line was disconnected -_- then I should up at 9:50 pm and the place was closed! Is this place still in business?