A worker fills a cup with Red Mango's tart-flavored, nonfat frozen yogurt. Seconds later, she'll add one of more than 19 toppings at the cusomer's request.

“It” being the difference between the cost of opening a Red Mango unit—anywhere from $263,000 to $364,000—and its annual sales volumes, which range between $700,000 and $1.2 million, according to the company. That difference likely translates into healthy unit-level cash flows even after subtracting franchise fees ($35,000) and royalties (8 percent of sales, including the advertising fund). The privately held company doesn't share full unit economics.

“The numbers tumble pretty well in this business, especially when you look at the level of complexity,” declares Birch, meaning the lack of hoods, stoves and long ingredient lists typical of fast-feeders. “This is a pretty straightforward business model.”

So far, the model has attracted franchisees in nine states that operate 24 of Red Mango's 36 units, all of which have opened since July 2007, a pace founder and CEO Dan Kim says is continuing this year and next. The company expects to open 30 units in 2009.

“We believe the [frozen yogurt] market is very hot and will remain very hot for a couple of years,” says Korean-born Kim.

Unless you've been visiting another planet, you're aware frozen-yogurt chains have been popping up with the regularity of ragweed, chiefly in areas where young and style-conscious consumers hang out. Red Mango opened its first store in the trendy Westwood neighborhood of Los Angeles. Today 70 percent of Red Mango's customers are female, no doubt drawn by the no-fat and low-calorie product.

Red Mango will exploit the trend by developing company and franchise units in existing markets rather than entering new ones. Seattle and San Francisco, the company's highest volume markets, will get the most attention in coming months, Kim adds.

To help expand the chain, an outgrowth of Korea's 140-unit Red Mango chain, Kim recently hired Birch, who is overseeing development and building an infrastructure to manage franchise and company stores, and Chief Marketing Officer Jim Notarnicola, a veteran of Blockbuster and 7-Eleven. At press time Kim was looking for a chief financial officer.

Red Mango's yogurt contains microbial cultures dubbed "probiotics" that may be beneficial to one's health.

The new capital isn't destined for unit growth. “We won't necessarily be deploying that capital on bricks and mortar,” Kim says. “I want to build a management team and spend the money more strategically on advertising.”

Like other entreprenuers, Kim has spent few dollars on marketing, gaining brand awareness chiefly through viral marketing and sponsoring local events. Red Mango recently supported a Korean-American Bar Association meeting and NBC Summer Press Day.

Kim wants to do more of the same but also add traditional media to the mix. “Now that we have money, we will focus our efforts on more interactive marketing and print,” says Kim.

Brand awareness is also the result of market penetration. Red Mango has already jumped across the country to New York City, where a franchisee operates seven stores, and suburban Chicago. Other markets include Seattle, Salt Lake City, San Francisco and Los Angeles. The Sherman Oaks, Calif.-based company is a registered franchisor in 15 states, according to a franchise circular on file with the California Department of Corporations.

“Most of those cities have large populations that are very health conscious and active,” Kim explains. “They're also educated and love to keep abreast of things that are new, especially in Seattle where it rains a lot. They love hanging out in a relaxing environment.” What about Salt Lake City? “There are not a lot of destinations that are stylish, and people there don't drink a lot of coffee.”

Sleek decors help account for the concept’s attraction and hefty volumes.

The market for frozen yogurt is being driven by a consumer eager for healthful snacks and quiet places to spend time. Frozen yogurt, especially the tart (as opposed to sweet) variety, can contain live microbial cultures dubbed “probiotics” that may be beneficial to digestion. Some so-called frozen yogurts do not contain live cultures. It doesn't hurt, either, that green tea is one of two flavors Red Mango offers; the other is “original,” a plain yogurt. Sixteen toppings keep things interesting.

In Kim's many TV appearances, he almost never fails to mention Red Mango's frozen yogurt is “authentic,” meaning it contains enough live cultures to rate a seal of approval as real yogurt from the National Yogurt Association. Pinkberry, after an embarrassing episode this spring involving a lawsuit charging its products did not contain enough live cultures to warrant calling it yogurt, now boasts the same seal of approval.

As Birch suggests, there is little complexity. Red Mango's proprietary tart yogurt product is thawed to liquid consistency in the unit before being added to soft-serve machines.

Kim isn't worried about two-year-old Pinkberry, now backed by Maveron, Starbucks CEO and Chairman Howard Schultz's venture-capital firm. Kim says 60-unit, Los Angeles-based Pinkberry attracts a different crowd: “younger and narrower.” Since opening the first unit, he adds, he's learned Red Mango's audience isn't merely trendy. “Red Mango works well outside of Los Angeles,” he says.

How long the craze for “froyo” remains popular is anyone’s guess. But if the largest players, namely, Red Mango and Pinkberry, can franchise their way among active and educated people, the product may be around longer than the last round.

A more pressing concern to investors is how long the lust for frozen yogurt lasts. In its last incarnation, from the early to mid-'90s, interest flagged after bad publicity. “There was a big rise in the number of stores, and they were successful for a while, and then nutritionists began pointing out the caloric content. Turns out, it wasn't all that different from ice cream,” recalls Bob Yonkers, chief economist for the International Dairy Foods Association in Washington, D.C.

The result: Americans consume a mere 1.3 pounds of frozen yogurt per capita annually, down from 3.5 pounds in 1993, according to the U.S. Department of Agriculture.

Trend-watcher Richard Laermer dismisses the current round as another fad. “Problem with all these expensive yogurt stores is they all want to be hip. You cannot manufacture that sentiment,” argues the author of 2011: Trendspotting for the Next Decade. “Even Pinkberry is becoming a joke, and now that the masses are going to it, it's slowly becoming as passé as something that was cool yesterday.”

Not so, Antioco insists: “This time is different because we believe the healthier-for-you trend, as long as the product provides satisfaction in the right kind of environment, will be around for a long time.”