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Sunday, Jun 4, 2023

A Real Mensch

As chief executive of Menchie’s, an Encino company that operates 270 yogurt shops worldwide and does $100 million in business annually, Amit Kleinberger doesn’t punch out. The 32-year-old literally eats, sleeps and dreams business. But that’s just how he likes it. Pursuing a career as an entrepreneur has been the foundation of Kleinberger’s life. Shortly after immigrating into the U.S. when his three-year service in the Israeli Defense Forces was complete, he enrolled in Santa Monica College with the idea of becoming a glamorous criminal defense attorney. It took less than one semester in academia for Kleinberger to decide school was not for him. He immediately started his first business and spent the next five years starting, building and selling companies. Then in 2008, he invested in a small self-serve yogurt shop in Valley Village owned by couple Adam and Danna Caldwell. He became a part owner and immediately knew his days of buying and selling businesses were over. Over the next five years, he led Menchie’s rapid expansion, relying on his overseas knowledge of growing up in both Israel and South Africa. The company now sells its red velvet, carrot cake and other exotic frozen yogurt flavors in 18 countries. Kleinberger plans to spend the rest of his business life further building the enterprise. Question: What made you want to get involved with Menchie’s? Answer: It’s a product that puts smiles on people’s faces. Add in that the industry just started booming and I saw that we could not only capture a market, but be a global leader. Do you consider yourself the global leader now? We are the largest self-serve frozen yogurt franchise in the world. To grow to a 270-store chain in just five years is wonderful. Our mission is to make the Menchie’s experience available to those all over the world as a legacy for years to come. We want to create infinite demand for our brand. Did business always come naturally for you? When I arrived in the U.S., I went to college almost immediately. I dropped out early on when I realized that I can pay tuition or I can make tuition. I started my first business immediately and decided business was my calling. What business was that? While I was in college, cell phones were becoming a big thing. I started my first business in cell phone equipment. It ended up having 26 locations in six states. Basically, I sold equipment, Bluetooth technology, which just came out, and all the supporting elements of a cell phone. I made some great money in it, great margins. But there was a certain point where I outgrew the business. It wasn’t challenging. I decided to sell a portion of the business and move on to greater things. What greater things? I entered into a very interesting business after that: glass. I was dealing with all glass products for commercial and residential use. At a certain point, I was the largest glass distributor in the San Fernando Valley. Lady luck was on my side because when I started that business, construction was booming. We made good money. And then, at a certain point, I decided to move. When something isn’t big enough, I move on. What next? Well, I found myself fascinated with the assisted living business and senior care industry. I studied and certified myself to become a senior care professional through the Department of Health Services. So I opened up a facility in Ventura County, Everlasting Senior Care, and focused on Alzheimer’s and dementia care. I owned the business from 2006 to 2008. I learned a lot of things, but had to leave the business because it just became sad to me. It’s a great business, but it’s not for everyone. I wanted to deal with a happy business. Is that what brought you to Menchie’s? Happiness? At that point, it was nothing but a single store in the Valley. I was looking for what was going to be the next big thing I would do. And it has the right mission. Our mission is “We make you smile.” I’m a happy guy. It fits. Why is the chain called Menchie’s? Adam used to call Danna (the husband and wife who opened the first store in Valley Village) a nickname, which was Menchie. The meaning of mensch is a good person in Yiddish. They were just dating at the time and he called her Menchie. You know, you’re my good person, you’re my Menchie. People all over the world have embraced it. Do people know what it means? Most don’t recognize that it’s a Yiddish term of a compliment. It’s a nickname and it just stuck. Like a lot of other great names of brands, it doesn’t mean much. To what do you attribute your speedy growth? It happened with a lot of tender, loving care. There are two things that make a franchise grow. The first is culture and purpose. The business has to have a “why,” something behind it. There’s a reason why we exist: to make people smile. Second, the business has to be profitable. It obviously has to make money or franchisees won’t be interested. We developed a model that makes money and something fun that franchisees would want to join. And international growth? How did that come so fast? Because I am multicultural, I know how to connect with different nationalities. That helped substantially. I can say that is one of the reasons I surpassed most of my competitors. I knew how to find the right international entities. And then we know how to interact with them in a way that makes them want to do business with us and no one else. Where did you get so familiar with other nationalities? I was born in Jerusalem but left when I was a baby. I grew up in South Africa and growing up there was a platform to learn the international arena and understand different cultures. My father had some work opportunities and like many families, we moved for work. It’s a place filled with good culture and a lot of nationalities. I was able to learn a lot about diversity and the value of diversity. What kind of work opportunities did your dad have? My father was a building engineer. In the early ’80s, Johannesburg was booming economically. He had some construction projects. How long were you there? Once my father’s work was completed, my parents decided to continue in Israel. I was eight years old. South Africa was wonderful but it was just time to go back. Did you get conscripted into the army? The army was something I always wanted to do and I worked hard to do it. I was able to be a commander and sergeant and enjoy the camaraderie that can only be created in those environments. What was your fondest memory of the army? I learned a lot about leadership. I had a commander and his name was Simon. He influenced me and mentored me early on. I learned from him today what I consider principles of leadership that are directly correlated to business. He was an officer in an elite unit and elite leadership came out of him, it exuded from him. How does that leadership correlate to business? When you’re in combat and you tell someone to move under fire, they may not necessarily listen. The biggest things are at stake, which are our lives. The only reason people do things in the military is they believe in the person giving the directives. Title does not give you any leadership capabilities. It gives you the initial platform, but the rest is up to you. The work needs to be done on your level. What was your worst memory of the military? I was a sergeant, leading a group during an operation in the West Bank. Someone behind us hijacked a deserted bus and ran us all over with the bus. I don’t have any recollection of the event. I actually woke up in the hospital. It was quite a miracle that I was able to walk out of it. What was the extent of your injuries? I actually fell from the impact and the bus went over me. I got really lucky because I sustained no severe injuries, the wheels did not go over me. I was just banged up. But some of the other guys were banged up more severely.  What did something like that teach you? I learned that life is fragile and we are to treat it in that matter. I keep in my briefcase a picture of me arriving in an ambulance to the hospital. I keep that picture as a reminder of how fragile things are and how much we need to be grateful. Every morning we wake up is a reason for celebration. And how about the Menchie’s product? Are you a fan of dessert? My favorite part of a meal is the dessert. I claim that I can eat more frozen yogurt than most, if not any. I really can. I eat it all day and want it all the time. What’s your favorite flavor? Red velvet. I love the flavor, but also because we invented it for frozen yogurt. Back in 2008, I found a cupcake shop in Los Angeles (Sprinkles Cupcakes). I loved it and actually took that cupcake and tried to mimic the flavor in a frozen yogurt. That was the first introduction of red velvet into the market, which is today a top-four selling flavor in America. Are you surprised at all with the quick rise of Menchie’s? It’s what I wanted and what I expected of myself. For me, to achieve what I have and for the organization to achieve what it has, it’s because we were willing to work. You’ll find that in the past 15 years, I have taken about two weeks off on vacations. How does that impact your life outside of work? I’m not the best example of balance. I invest almost every single hour of my day in business. Anything is possible, but you have to be willing to pay and invest the time. When you enjoy business, that is your balance. It works for me. I enjoy it more than most other things. What do you do with your spare time? First and foremost, business is my hobby. Anything related to business, from books to shows. I play some sports – ping pong and tennis to name a few. Ping pong? I love ping pong. We had a competition here at a company barbecue and I came in fourth. It’s a game of precision and accuracy. It’s a small table and every play is accurate and well planned. How do you relate ping pong to business? Business is about precision and accuracy. What makes a phenomenal surgeon is his accuracy, precision and strategy. What makes a better basketball player is strategy and precision. How does one value a meal? Service is accuracy in the process. Food quality is accuracy. Experience is strategy. If companies apply those elements and make sure their product is done at a high level, they are invincible. What’s the best game you ever played? The best game was with my father, who has Parkinson’s. About a year ago, he came to visit and all of a sudden, he did so well that I actually had a challenge in the game. Seeing my Parkinson’s-affected father play ping pong with me while he barely walks was fascinating. That’s probably the best game I will ever play. What is the hardest decision you’ve had to make? One day I realized that I could not satisfy all my franchisees. I need to get comfortable with the fact that we can’t please everyone. That was tough for me. But today, I am proud to say we please about 80 percent and that makes me smile. What displeases franchisees? There are two things when you have any type of relationship with customers. A franchisee is a long-term customer. A franchisee is someone that you keep serving for a lifetime. I don’t try to do things for my franchisees to like me, but to respect me. What does that mean? The right decision isn’t always the easy decision. I could release a new flavor and some franchisees may not like it. But the decision is made for their own benefit. Because they’re part of the system, everyone needs to follow the system. They may not like it, but they have to go with it. It seems to have worked out pretty well overall. Are you satisfied? There is a lot more to grow. Today, we have 270 locations worldwide and we have an additional close to 300 in development. We are grossing about $100 million system wide in sales each year. We are slated by next year to break the $200 million yard line. But we don’t just pat ourselves on the back with each new store and milestone. We have to make sure we continue to deliver the ‘We make you smile’ experience. That’s really the most important thing. Much of your business career seems to revolve around ‘The next big thing.’ What’s your next big thing? There’s no next big thing for me. I’m settled now. Why is this the last stop? There are two reasons. First, building takes a toll. But the bigger reason is because I finally found something that will literally take a lifetime to develop. I want to be there when you ask someone who is the leader in frozen desserts, the answer is Menchie’s without a doubt. I will not even get to live to see those days, but that’s our vision.

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