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Sweet treat: Andy’s Frozen Custard continues successful growth trajectory

Andy's Frozen Custard store in Springhill, Tenn.

After opening its first location in 1986 in Osage Beach, Andy’s Frozen Custard has about 100 locations around the country, including this one in Springhill, Tenn. (Courtesy Andy’s Frozen Custar)

When Ann Burge started making treats at Andy’s Frozen Custard in 1999, she was a teenager and the company, based in Springfield, Mo., had just opened its third location.

More than two decades later, Burge remains with the company and works in operations services. The company has also zoomed ahead; it recently became the official frozen treat of Texas Motor Speedway in Fort Worth and now has about 100 locations around the country.

Burge attributes the growth to the founders, John and Carol Kuntz, who took “the time to invest in their employees,” she said. “I don’t mean just, ‘Hey, let me show you how to build a snow monster or make a turtle,’ but to step back and understand their employees.”

Andy Kuntz

Andy Kuntz

Still, the journey has not always been as smooth as the custard that flows out of the Andy’s machines. Like many food establishments, the COVID-19 pandemic proved difficult.

Even as the company continues to grow and the threat posed by the virus subsides, finding people like Burge remains a challenge, said Andy Kuntz, company president, son of the founders and inspiration for the company name.

“Our No. 1 thing that we think the most about is people, always finding great people and training [them], and as you get bigger, trying to make sure you keep your finger on that and have that close connection,” Andy Kuntz said.

The story of the company’s origin swirls to and from Milwaukee, Wis., and Osage Beach, a resort town at the Lake of the Ozarks in southern Missouri, Andy Kuntz said. In the mid-’80s, his father exited the residential real estate market. He was at the lake one night talking with Leon Schneider, the retired owner of Leon’s Frozen Custard in Milwaukee, who lived at the lake during the summer.

Schneider asked John Kuntz what he planned to do next. He suggested that John Kuntz enter the frozen custard business.

John and Carol Kuntz made the trek north to Wisconsin. It was December and cold, and yet people were still standing in line outside the custard shop, Andy Kuntz said, so they decided to give it a shot.

John and Carol Kuntz opened their first location in 1986 in Osage Beach and a second one a year later in Springfield.

Andy Kuntz briefly attended college at University of Missouri-Columbia and Missouri State University before leaving to work full-time for the family business. (His girlfriend, Dana, who is now his wife of 30 years, worked for the company too.)

One of the keys to the company’s growth, Kuntz said, was that for 18 years he wore a cap and apron and scooped custard.

“I had a very good understanding of what that business was all about — how to make the product, how it gets soft, how it gets hard,” Kuntz said.

And when business is slow, as is inevitable with a seasonal product, you dream up new menu items and other ideas, he said.

That stands in contrast with other entrepreneurs in his industry “who worked in the store for a year, hired managers and figured out a way to expand it. We never did do that. Our expansion was through increased sales,” Kuntz said

The company was also successful because, unlike with sausage, they weren’t afraid to demonstrate how the product gets made.

As the company started to expand, someone recommended that they move the noisy custard machines into the back of the business and then carry the buckets of finished product to the front of the store, Kuntz said.

But his family realized that would cut sales in half because customers want “to understand what it is that they are eating,” he said.

Andy's Frozen Custard concretes

One of the keys to the growth of Andy’s Frozen Custard Andy Kuntz said, was that for 18 years he wore a cap and apron and scooped custard. (Courtesy Andy’s Frozen Custard)

Still, expanding the business was not as simple as pulling a lever. In addition to finding the right real estate, which is often expensive, each store has two custard machines, which costs a total of $135,000, he said.

The company has also made mistakes in its expansion, the president admits. The company opened two stores in the Chicago area in shared retail space rather than the traditional model featuring a walk-up window and drive-through.  It didn’t work, Kuntz said.

He attributes that to the fact that they are selling a reward rather than food for one of the three daily meals.

“People come to Andy’s and they sit on the curb and the trunk of their car and enjoy a treat, and that is a lot of who we are,” Kuntz said.

Others outside of the Kuntz family also saw a lucrative opportunity in selling Andy’s custard. Eric Reed started working for Andy’s in 2004 and spent more than a decade developing the company’s franchise division. In 2013, Ranchers Custard Company paid to open three Andy’s franchise locations in Tulsa, Okla.

Two years later, Reed became a partner with Ranchers and signed a 20-store franchise agreement with Andy’s. Ranchers now has stores in Oklahoma, Texas and Florida and is preparing to open seven more locations in the next 18 months, said Reed, who has been working in the franchise industry since 1995.

“One of the first things I learned… was that a lot of mom-and-pop businesses unfortunately are not going to get across that finish line,” Reed said. “With Andy’s, what I love is that the one thing that I don’t have to wake up and think about every day is, what’s going to be the next quarterly treat?”

Instead, Reed said, “I just wake up and follow a system, and I learned early on that the world’s best franchisee is the person who can follow the system the best.”

Still, bugs like COVID-19 can enter a system. The drive-through model helped Andy’s stay afloat during the pandemic because people did not need to enter the store, Kuntz said.

But the company still had to deal with all the unknowns surrounding the virus. Parents who were unsure about how COVID-19 behaved were worried about their kids working in the stores, Kuntz said.

Now as the threat posed by the virus has subsided, the company, like the rest of the restaurant industry, faces a significant challenge finding staff, Kuntz said.

“There is so much unknown as far as costs. Hourly rates are rising like crazy, and you just don’t know if those are here to stay or if they are going to come back down,” he said. “It’s a delicate walk. I personally think that wages are going to be higher and the cost of a frozen custard treat is going to be higher, and that’s going to be our new norm.”

The company hopes to have 113 stores open by the end of the year. Even though he is now president, Kuntz continues to drive to almost all prospective locations for corporate stores and scout them out.

“We don’t think of ourselves as a chain,” said Kuntz. “I know in the real world, we are probably perceived a little bit that way, but we are very hands-on, and the people are our life, and you have to have the right people to run these stores.”

 

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