Franchising

Wow Cow frozen yoghurt chain milked dry as only Bondi store left standing

Eloise Keating /

Australia’s first frozen yoghurt chain Wow Cow appears to be on its last legs, with just one outlet in Sydney still trading.

Wow Cow was founded by US entrepreneur Carl Harwin in 2007, moving in early to take advantage of a growing preference among Australian consumers for chilled desserts.

But things appear to have turned sour, with four of the chain’s outlets in Newtown, Parramatta, Burwood and Darlinghurst in Sydney now closed. The Wow Cow store in Bondi is the only outlet still trading.

A staff member from the Bondi store told SmartCompany there is considerable confusion about what has happened to the company, with staff not informed about the other store closures or removal of the Wow Cow website, which now directs visitors to a Go Daddy domain holding page.

However, the employee said her store is continuing to trade and sales are going well.

SmartCompany attempted to contact the Wow Cow head office, as well as several of the closed stores, but did not receive a response.

Harwin was chief executive of the company until earlier this year and, according to his LinkedIn profile, he has left the company and moved back to the US.

However, his profile suggests Wow Cow could be pursuing a different direction. “Due to major competition in frozen yoghurt, [Wow Cow] is now evolving into a new generation large format dessert bar model which Carl initiated in 2013,” reads a post on Harwin’s profile.

A Facebook post indicates the Newtown Wow Cow store closed in February this year, but the date of closure for the other stores is not clear. The Burwood store has not updated its Twitter account since January.

The chain, which was once labelled as “one to watch”, started out as a company-owned venture with Harwin telling Private Media in an interview in June 2011 he spent 12 months researching and developing the Wow Cow concept before opening his first store in Sydney’s northern beaches.

Harwin relaunched the business in a flagship store in Darlinghurst in May 2009 and the company was employing a staff of 15 across its retail, events and catering and wholesale arms in 2010, turning over in excess of $700,000 annually.

In 2011, the business turned to franchising.

According to the Bondi employee, the outlets in Newtown and Darlinghurst were company-owned, while the stores at Burwood, Parramatta and Bondi are franchise owned.

Wow Cow also previously signed a joint venture agreement with supermarket giant Woolworths in 2012 and the two companies opened a Wow Cow outlet inside the Woolworths store at Melbourne’s Southern Cross train station.

SmartCompany has contacted Woolworths and is awaiting a response.

In an interview with QSR Media in April 2012, Harwin said he had plans to open as many as 10 Wow Cow stores in Australia and hinted at the possibility of expanding the chain overseas.

Stan Gordon, chief executive of Australian ice cream brand Cold Rock, told SmartCompany this morning he thinks the demise of Wow Cow “will be the first of a whole line of these situation”.

While Gordon says the downfall of the brand is not unexpected, he is sad to hear the chain has run into trouble.

“Wow Cow was one of the first frozen yoghurt retailers in Australia and it was quite a funky little brand,” says Gordon. “No one likes to see businesses close. No matter how small the business, someone has invested time and money.”

However, Gordon believes frozen yoghurt is a trend that has passed its used-by date.

“Frozen yoghurt is a fad and I think we are on the steep downward slope of the craze,” says Gordon. “It’s the trendy thing today but the trend shall pass.”

Gordon says he has been watching the US frozen yoghurt market closely for the past five to six years and believes the US market reached its peak around two to three years ago. He predicts Australia is following the same trajectory.

“Frozen yoghurt is relatively low cost industry to get into and there is a lack of strong chains in the market,” says Gordon, who believes this has led to many individuals to start up shop to take advantage of the trend only to realise that they actually have to run a business.

For Gordon, the biggest problem with the frozen yoghurt market is that the product “is positioned as a healthy alternative but it’s not”. “It’s full of sugar and its basically soft serve ice cream with a tangy flavour,” he says.  

Gordon says there is also a tendency for frozen yoghurt outlets to “over portion”, especially the self-serve operators.

“You don’t know what you’re buying until you get to the counter,” he says.

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Eloise Keating

Eloise Keating is the editor of SmartCompany. Previously, Eloise was news editor at Books+Publishing, the trade press for the Australian book industry.

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