Shane Murphy (00:02.382)

Welcome back everyone, we are thrilled to have Jerry Hancock with us today. Jerry and his wife are the founders of SubZero Ice Cream, which has 27 units, and probably the most interesting ice cream concept that I've ever experienced. They've had a lot of national attention across most news outlets, and appeared years ago on Shark Tank as well. Jerry, thank you so much for coming on today to share a bit more about your story with us.

Jerry Hancock (00:32.697)

Thank you. I'm honored to be able to be interviewed or go through the podcast.

Shane Murphy (00:38.094)

Yeah, you bet. Maybe before we dive in too far, can you tell us more about your background and the story behind Sub -Zero?

Jerry Hancock (00:48.697)

Okay, you know, it's kind of interesting because I really think that everybody has a unique background. So everybody has unique experiences as they go through life. So I'm not any different than that. So it's, so my, to get through college, I was, I had some mechanical experience. I worked on F 16s to help pay for college. And then I took industrial design, which is product development.

did a year of that. I also got a patent while I was doing that and I was going to trade shows, but I was also taking chemistry in and eventually ended up graduating in chemistry. which led me, which always, I always wanted to get in, go to MBA school, but I couldn't get, I didn't have the grades, that I really needed to go to the schools I wanted to. So anyway, I, worked in software engineering for awhile and then we,

told my wife I said well I think buying a franchise might be a good way to learn how to run a business. So we bought a New York Frito franchise which is kind of a rap franchise and so I had a lot of different flavors. Anyway, but we weren't doing as well as we needed to so we...

needed to add something. So the product development experience kicked in, started asking people what they wanted, and that's where ice cream came into play. So it's kind of a process, but then, to be honest, we started looking at ice cream, and I couldn't afford the freezers. And the ice cream manufacturer said, well, if you're not in a great location, they said don't add ice cream. They said it'll just...

It'll just be dollar in dollar out. I said, people just go right past you. It won't really help you. As I did my research, checked on some places that had, they just added ice cream as an afterthought. And that was true. The ice cream is afterthought is a, as a bad idea. And it's, so he gave one caveat. He said, unless it's different. So that's where things started was like, I had to figure out what something different.

Jerry Hancock (03:09.337)

So they went back to the customers said what do you like about other people's product and all came down to customization? So the only thing I could think of it to make it more custom and this about 2004 was I defined it is you had to start with the liquid because the only way to flavor an ice cream is to start with a the only way to make it more custom is that Is to change the flavor the only way to change a flavor and ice cream is is start before it's a solid?

So it's came back to that chemistry of like states of matter. And you know, you have to start with the solid so it can dissolve through. And that's where things started. And then my wife left an article out on liquid nitrogen. And that's, I was like, well, that's it. You know, we can make it in seconds. And then it was a lot of testing, about four or five years of testing to get it really right. And probably another five more to really get better systems.

So about 10 years really in the making before we really felt confident that we could expand.

Shane Murphy (04:14.862)

That's fantastic. And for those who haven't had experience with like SubZero and the liquid nitrogen process, I first experienced this when I was going to school in Provo, Utah and went to a SubZero location. And it's unlike anything that you ever experience. You walk in and at the start of the line, they're not scooping.

like ice cream out of a barrel. It's this liquid that goes through this process. And maybe can you describe what happens as you go down that line?

Jerry Hancock (04:51.993)

Yeah. You know, that's, it's funny because we, when we opened originally in that first test location with the New York Rideau, I had somebody come in and they said, what do you get open up the ice cream shop? And I said, what do you mean it's open? He says, where's the freezers? And I was like, you know, that's a missing concept of visually. So what we do is we start with the, you know, the, the definition of the process is custom made to order. So we start with the liquid. So you can pick between a premium ice cream, a low fat, a custard.

Shane Murphy (05:06.478)

Yeah.

Jerry Hancock (05:20.953)

vegan, keto, Italian ice, a variety of different mixes. And then you get to pick your flavors. Now our flavors are concentrated. They're made for us. They're specifically designed for this process. And then we add the flavors so you can mix your flavors. If you want a strawberry cheesecake, you can make strawberry cheesecake. We don't have strawberry cheesecake. We have strawberry or cheesecake.

But then if you do an and and add them together, then it becomes that new flavor. So you can create new flavors from our palette. And then you had to mix in and then we freeze it. It takes about 15 seconds. We came up with a patented process that creates a layering effect really. So it's, and we patented that process of those layers forming.

So anyway, that's, and then we scoop it, takes a, and if it's too hard, then we can soften it. And then if it's too soft, then we can harden it. So you get it for the right texture. So it's, there's, we, we're in a store in Massachusetts, one of our stores, we opened this last year and we had people, you know, science people, they were there and they're just kids and they were just like, just their minds were just going like, well, how many nations is this?

So they did the math just in there as a family and they came back to me and they said, you know, you have three quadrillion flavor or options. And I'm like, yeah, it's about right. And, but it just kind of blew their mind. It's like, I have three quadrillion choices to make. so anyway.

Shane Murphy (07:06.958)

Yeah, because there's nothing like that moment when as a consumer, like the first time experiencing Sub -Zero ice cream, you see it go from liquid and then like, it's like this liquid nitrogen just turns that into a solid like instantly and boom, you have ice cream. And it's like, you see the whole creation process that in traditional ice cream, you don't experience. And...

Jerry Hancock (07:26.009)

Right.

Shane Murphy (07:34.83)

It's a really fun and unique concept to be able to have as a consumer. And I imagine that is a different experience. You talked about how there's some education, like this isn't, it's not out of a barrel. There aren't freezers and there's a new concept. But.

Jerry Hancock (07:50.617)

Yeah.

Yeah, people walk in off the street and they're tourists, you know, and they, and they, so they don't have any idea what they're expecting. And they walk in and they go, okay, I want this flavor ice. Okay. And then I start pouring out some liquid and they're like, what are you going to make me? And I'm like, well, just wait. And then I, and then you blast the nitrogen and you get this kind of, and then they just jump and it's like, and then they giggle, you know, and it's.

Shane Murphy (08:21.678)

Yeah.

Jerry Hancock (08:22.041)

that it's that excitement. It was like, okay, wow. And it's, and I, I think there's a, there's a factor of, well, you know, edutainment, you know, there's a, cause a lot of the, there's several BYU and UVU chemistry classes that actually offer extra credit to come into our store and, and, write a paper on it. So it's every year we get this crowd of like,

Shane Murphy (08:34.03)

Yeah.

Shane Murphy (08:47.182)

fascinating.

Jerry Hancock (08:51.193)

college kids that come through and you know write a report on on how it's happening or what's happening.

Shane Murphy (08:58.99)

really unique form of marketing is going through that university and those professors just, they're marketing you through the science class, but you're getting exposure to all of those students along the way. I imagine, you guys have been doing this a very long time now, and I imagine marketing,

Jerry Hancock (09:04.313)

Yeah.

Right.

Jerry Hancock (09:21.017)

Thank you.

Shane Murphy (09:23.886)

has shifted through the years and there's been an awareness process that has happened with SubZero. Maybe in the early days, what did marketing look like for the stores as you were starting out and how did that shift and change as the years have gone by?

Jerry Hancock (09:42.361)

Well, you figure like we started 2005, really. So that was pre Facebook, you know, pre social media really, you know, taking off. So it's, so we've had to adapt quite a bit over the years. And I think we've missed some of the, you know, the waves like Instagram we were behind on. So I think there's some things that we, we could do a lot better. It's not because.

I'm not on social media, just that I'm not on necessarily Instagram. So it's sometimes it's an afterthought and you don't think that that's the, but it's, so I think that, you know, there's, there's a lot of strategies that we can improve on. Now, when we started, it was print. So it was, it was a lot of like mailers and things like that, but we'd also, but fairs were important to try and get the.

you know, in -person events, and as time's gone on, then that's been less important to move the needle and more important to make content.

which I think is good because we, I've often said, because we do STEM education as well. So we go into schools and present STEM, a STEM program. And then the last thing we do is we talk about ice cream. So I prefer doing that than, than anything, just because I really, I've kind of, I've always had a belief that a business had to have a bigger person than money. And, so my purpose is STEM education.

And so I wouldn't say it's our front and focus to most people, but it's not uncommon for me to say that we're an education company first and we just happen to make really good ice cream.

Shane Murphy (11:42.83)

That's a fantastic concept and it is, you are in a very unique place with your brand to be able to do that where others just can't. It's actually a competitive advantage that you have for marketing, which a lot of, sometimes if you look deep enough at like a restaurant brand or concept, when you find unique things about you or your brand, if you can lean into that.

Jerry Hancock (11:54.585)

Mm.

Jerry Hancock (11:58.585)

Thank you.

Jerry Hancock (12:08.217)

Mm -hmm.

Shane Murphy (12:10.222)

Use that it gives you a marketing advantage that others just cannot compete on a lot of people can compete on price or on discounts or on you know the just the everyday things But if you can find that competitive advantage that makes you different or makes you unique even if it's just part of your story That makes a difference from marketing perspective and you've been able to capitalize on that through stem and through education and

the connection that you have with that. Now, I believe it was back in 2013, you also had the experience of going on ABC's Shark Tank show. Can you tell us about that experience of how that actually came to be? And would love to hear about the impact that that either had or didn't have through the process.

Jerry Hancock (12:53.433)

Right.

Jerry Hancock (13:09.849)

well, we, we had, I mean, I've always liked the idea of going on Shark Tank, but I love that show. We were on season four, so it was fairly early, you know, in the cycle that we're in now with, with, Shark Tank. but there still was 40 ,000 applicants that season. And so I, I just knew we were going to get on because I knew we made a good process, our, our good show. And when it comes to.

Shane Murphy (13:21.518)

Yeah.

Jerry Hancock (13:39.865)

going on a show like that, it's more important that even though the sharks will look at the business itself, that's not who picks who gets on the show. The producers pick who get on the show. So you've got to be good. You've got to be good TV. If you're not good TV, you're not going to get on the show. So you got to pick your audience. And with that process,

Shane Murphy (13:57.23)

Yeah.

Yeah.

Jerry Hancock (14:07.545)

you have to kind of shift because you shift from the producers to the sharks. And so being able to shift your pitch is interesting. But even though when you're in there, we really felt like we had Barbara, we would have gotten a deal, but we had Lori at the time, they were switching off. And so we always felt like that was...

We, so when we, when we heard what our panel was and it's really the day of, then it's like, all right, number one goal, get on TV because it doesn't mean that if you film, you're going to get on TV. So be good TV in other words, likable. And so we focused on being likable. So we get on TV rather than focusing on making sure we got a deal. but,

And when it comes down to it, you can't, even if the shark doesn't understand your business, like I would say that most of the sharks don't understand franchising. Barbara is the only one that understands franchise business in my opinion. and I'm not trying to be condescending to the rest. I'm just saying she just is the only one that understands it. It's there's a, it's a very unique business model. And, and when you're, you can't really correct them.

You know in the in the tank. Well, you don't understand well Okay, if they're they're not getting it then you can't correct them that becomes bad TV very fast

Shane Murphy (15:38.51)

Yeah.

Jerry Hancock (15:48.153)

anyway, but that's, but it was, it was the interesting thing about what's happening. Really think about it was great exposure and it had really good validation. But the, the problem with it is that most of the products are products that sell online and they make a lot of money really, really fast. Okay. From, from the exposure France selling franchises.

Shane Murphy (16:07.79)

Yeah.

Jerry Hancock (16:15.545)

is a slow process. It takes a lot of time. You have to do, you know, due diligence and, you know, there's a lot more money on the line and there's regulations where you can't sell some things too fast. Like you, there's a 16 day cooling off period when you're buying a franchise where mandated by the federal government. So you have to let them, you know, you,

Shane Murphy (16:19.245)

Yeah.

Jerry Hancock (16:45.145)

And be honest, if you talk somebody into franchising and really break some of the rules, the liability is really high. I mean, it's through the roof as far as it could be 10, 20 times what you actually get in that sale, the liability if you don't follow the rules. So it's very tricky. So, you know, it didn't actually...

help us sell that many franchises. I think it did as far as when you're just because of validation. But I don't think like right off the bat, it didn't give us a lot of cash.

Jerry Hancock (17:32.249)

versus other places where they got a lot of cash. You know, they, they had a lot of cash really fast. but.

Shane Murphy (17:40.526)

which I think can be a misconception in our industry where people see different brands go on Shark Tank and they hear different stories and they mix the e -commerce brands and the explosion effect that they get from Shark Tank and they think, wow, if I can get my restaurant concept or my food truck or you name it,

Jerry Hancock (17:56.697)

in the

All right.

Shane Murphy (18:08.686)

restaurant industry vendor on Shark Tank, I will magically blow up. And it's important to understand how it can impact your business because it also takes a lot of time and preparation and can be a large distraction, I imagine, from many of the other things that you do. And just knowing...

like the real background of, hey, how can this impact my business and what should I expect it to do? And lining those two things up is really, really important. And so that's an important story to share.

Jerry Hancock (18:49.241)

Yeah, and there's, and the people don't realize like franchising is, like I said, is a unique business. And people often think, well, you're franchising. You're like this one thing Robert said, he says, well, you're, you're, you're taking money, aren't you from people? Isn't that why do you need money? I go, well, you don't understand the breakdown, I guess, of how the, the sales are, you know, you get, you spend 40, 50%, but sometimes 80 % of the revenue in commissions.

when it comes to brokers and lead generation and things like that on the sale like that. And then, and you really don't get enough royalty, you know, to really keep on expanding. It might cover your, your base costs, but you can't really expand. So you kind of have this front loaded, you know, franchising is very expensive front loaded until you get to a certain mass.

And so, but you don't really want to grow too fast because that causes liability. so it's, that's my opinion. So you want to kind of grow, you know, the, the, he kind of be, it's kind of the, I call it the Goldilocks effect. You know, you got, you don't want to be too fast. You don't want it to be too cold. You just want to be just right. And that's difficult to do. when you're growing with like the way we've done, we were just spending all organic.

But you know, you, so anyway, trying to get that balance is key. And when you're early stage, you know, you tend to wear too many hats. And so oftentimes I've learned over the years is that wearing all the different hats can be distracting and not efficient. And so I see you've got traction behind you, the book.

So, you know, and I like that model, but you've got to get to a certain mass in order to really incorporate traction into your business model. One of my goals is to try and incorporate that business model into our business.

Shane Murphy (21:01.326)

Fantastic. Yeah, we've run our business through like the EOS model and we love it, but you do have to have infrastructure in place and the business running. Yep, certainly.

Jerry Hancock (21:15.001)

You got to separate the hats. I mean, that's a whole idea by the train, the integrator and the innovator is you, you at least have to get to that point where you, you can separate those two hats.

Shane Murphy (21:26.734)

Yep, absolutely. And so, as you're looking at the business today and when you have a franchise business, it's not, you're kind of describing the royalties and things there. And one of the crucial components is making sure that store level sales are successful and that the store is empowered to...

Jerry Hancock (21:51.289)

Mm -hmm.

Shane Murphy (21:56.334)

actually bring the revenues that they need to operate as well as, you know, that's how the franchisor continues to grow and expand as time goes on as well. What are some of the things at the store level that you've seen your franchisees do that have led to successful store sales from a marketing perspective?

Jerry Hancock (22:18.393)

number one thing is the stores that do the best and ones that are in the community the most. So they, where we had some failure in, in particularly one state, it was all one group was a learning effect, you know, for us, but they came from either one of two backgrounds that came in from subway or, or, convenience store, you know, backgrounds.

The problem with that is that a lot of times that is just people happen to happening onto your, you don't see a convenience store marketing, except for maybe Maverick, which is massive, right? Something like that. But it's, it's a, but you don't see it's a convenience. You just happen to be, it's in your path. And so, but, so,

Shane Murphy (22:59.438)

Yeah.

Shane Murphy (23:11.534)

Yeah.

Jerry Hancock (23:16.761)

changing those people's mentality where they need to get into the store. So I talked to our store that did the best over the years. I asked him, I said, what did you do? And I thought it was some of the media that he got an attraction from because he had some really viral stuff on social media and from somebody else. Okay. So it was an influencer. And, and so, and I, and I expected that to be his number one thing.

But it wasn't. He said, I said, what did you do? And he says, I consistently had bookmarks in schools.

That's it. So just making sure you're in the community, you know, you know, we have a bookmark with a reading schedule on the back. That's the number one thing. Now we notice, for instance, in addition to bookmarks, if we just go around our store to the businesses and pass out coupons, that makes a big difference. I there's a, where your office is, I'm surprised because we've done catering up there.

as because we've done coupons. So we've done catering for businesses and it's, as I talked to the, the people that work in the, in that area, I expected them to be more commuters that live further away, but most of the people that work right there, they live pretty dang close. they don't live very far, so they're our prime customer. And so.

Being out in the community, passing out a coupon here and there, sampling, what we do in Provo is we just stand outside the door with the tank and make ice cream at night and sample. And about half of the people that take a sample come in and buy an ice cream.

Shane Murphy (25:08.782)

fascinating.

Jerry Hancock (25:10.425)

so it's, it's, it's the, it's the, it's not the flashy, you know, it's the old school guerrilla marketing.

Shane Murphy (25:24.718)

And that's the thing, if you have the combination of a good product, especially if there's something unique there, and you couple that with, like, just being in front of your target, those two things, if you do it, apply that consistently, will bring people back to you. And having the good experience is what generates the repeat customer.

Jerry Hancock (25:31.001)

Mm -hmm.

Jerry Hancock (25:41.881)

Mmm.

Jerry Hancock (25:53.433)

Right.

Shane Murphy (25:53.55)

They know I had a good experience. If I'm coming back and I have another good experience, I now can expect consistency from this brand and I know it's going to be good and I'll bring my friends because I trust it. And then just getting in front of people. That connection, whether it's through the bookmark, whether it's through sampling in front of the store or a movie series at the park or your professor asking you to write a paper on it.

That consistency of being with the community and having a unique and good product will be a winning equation every single time. And so Jerry, thank you so much for coming on today and sharing your story, your experiences. You've gone through many different phases of the business through the years and things that many operators...

Jerry Hancock (26:23.897)

Mm -hmm.

Shane Murphy (26:51.502)

have dreamed of being able to accomplish. So we really appreciate you coming on and sharing your story.

Jerry Hancock (26:56.185)

I've got a lot, lot to learn and I, and I'm learning that I can't learn at all. but I, I'm going to leave one last note. One of, one of the things that I've found is I've gone through the business, especially with employees, oftentimes people are afraid to learn and, you know, they give them something. Well, I, I had a, I used to work at Novell and I was a tester.

Shane Murphy (27:07.31)

Please.

Jerry Hancock (27:25.977)

And I, and, they gave me this, product to work on. And I was really intimidated because it was a, it was a, a network protocol, but it was a specific and it hadn't even been built yet. So I had, all I had was the, you know, the RFP, definition from the standards. And I'm reading this thing and it makes no sense, but you got to keep on going. You can't give up.

And I, and I, so my point is don't be afraid to learn something. There's it's so just, just don't be afraid to learn something and don't expect somebody else to do it for you. So I've hired people where they said, you know, where they were supposed to have good management experience, but they were supposed to do a certain project and they go, they come on board and they go, now I got to hire somebody to do the project. And well, that's what I hired you for. You know, it's.

Shane Murphy (28:05.134)

I love that. That is...

Shane Murphy (28:24.43)

Yeah.

Jerry Hancock (28:25.177)

You know, you gotta don't expect somebody else to do it for you.

Shane Murphy (28:29.87)

Certainly. That is wonderful advice. Jerry, thank you so much for sharing. How can the audience follow you or SubZero and keep track of you guys?

Jerry Hancock (28:44.889)

We're on Facebook. I've got a LinkedIn. I'm more active now than I have been in a while So I've been trying to post I sometimes Get a little self -conscious. So sometimes I don't post as much as I like to So but Or the thing I should So you can contact us through the website subs your ice cream calm the full episode is there on the website First for shark tank. So if you'd like to see that

Shane Murphy (28:50.798)

Okay.

Jerry Hancock (29:13.433)

If you have any questions, I'd be happy to answer any questions. Anybody wants to talk about patents or, or that type of thing, how to get a patent, what it requires, whether I think it's patentable or not, you know, the pluses and the cons, you know, the, the, it's not all pluses to have a patent. cause you have to protect her and, but at any rate, but it's, it's certainly an advantage.

So anyway, just those types of things. So if anybody wants to reach out, I have my contact information on LinkedIn, so my phone number is pretty wide open.

Shane Murphy (29:57.646)

Jerry, thank you for making yourself available and thanks again for coming on the show today.

Jerry Hancock (30:01.177)

Thank you. Appreciate it. Thanks, Shane.