How a new 27-year-old CEO plans to revive the fro-yo craze at 16 handles
When a dark-haired man piles a pile of chocolate chips and coconut flakes onto your Chocolicious fro-yo at 16 Handles in Times Square, he might just be the CEO of the entire chain.
His name is Neil Hershman, the newly appointed 27-year-old CEO of 16 Handles. And rolling up his sleeves to take the weekend shift at the brand’s flagship happens to be one of his favorite parts of the job. He says wealth that all 16 flavor options can be overwhelming for customers; The fun part, he says, is explaining that you can get them all.
“You’re going to come back with this pile of fro-yo, and you didn’t know someone could stack cookie dough on top of the cup that well,” he says. “And yet they did it. It always makes me happy because then you can see them sitting outside… and taking pictures with their fro-yo in Times Square.”
It’s a moment Hershman wants customers to enjoy not just in New York City, where 16 Handles is based, but across the country — and maybe one day internationally. Right now, he’s focused on expanding the East Coast franchise and plans to add stores in Florida and Boston while also looking at the California markets.
It’s certainly ambitious to try to move 16 handles across the country, but it’s Hershman’s style. In his youth he became a master diver and a trained pilot. And though he’s only 27, he has decades of entrepreneurship behind him, dating back to when he sold gum to family members as a child. He ended his post-college hedge fund career after his Kickstarter campaign for refrigerated coasters raised $150,000 in 20 days. Hershman began investing in 16 handles in 2019 and became CEO of the company last August.
Building a Fro-Yo empire will not be an easy task. The first 16 handles opened in the East Village in 2008, with nine direct competitors within a three-block radius, Solomon Choi, founder and then CEO, told Refinery29. It marked the beginning of the fro-yo boom in the 2010s — “a time when consumers focused on better, yet flavorful ice cream alternatives,” Choi said, adding that the novelty of self-service and personalization is also enticing factors are .
The brand had 40 storefronts during peak season, which dropped to 30 by 2022, Refinery29 reported. It reflected the rise and fall of fro-yo; According to an IBISWorld report, industry revenues grew 22.7% annually from 2009 to 2014, bringing in $1.8 billion. But the market size of fro-yo stores has been declining since 2014, hitting a bottom in 2020.
However, Hershman could have some advantages when it comes to orchestrating the comeback from 16 handles. For one, the fro-yo market is expected to grow from $1.69 billion in 2021 to $2.14 billion in 2021 thanks to the upsurge in health-conscious consumers during the pandemic and new ranges of fro-yo flavors. And 16 Handles’ top store already made $1.2 million in sales last year. Hershman has also enlisted the help of minority investor and YouTube prankster Danny Duncan as chief creative officer to help bring Fro-Yo into the mouths of a larger audience: Gen Z. Given her — and other generations’ — desire for nostalgia in tough economic times, Hershman might be able to revive the fro-yo craze.
The Rise of the Dessert King
After living in New York City for a few years, Hershman says he was a regular in the East Village of 16 Handles. That was his first thought when he wanted to get into the food industry, which had always fascinated him.
It was obvious to him that despite his loyal customers, nobody really invested in 16 trades. “I just saw so many ways to clean it up and make it a better customer experience,” he says, adding that he wanted to be part of a growing brand. “It was just the wrong leadership at the time.”
Three years ago he approached the management of 16 Handles and together they devised a plan for Hershman to acquire some of the company’s businesses. He says he invested $125,000 to become a franchisor at his first location – Murray Hill. With a Small Business Administration loan to fund the rest of the expenses, he took the profits from one store for his next purchase.
One store became three, and then Hershman built two stores. When the pandemic hit and sent NYC’s real estate market to record low prices, he took advantage of cheaper rents to double the brand and open the Times Square flagship in early 2021. During this time, he began taking over New York City’s dessert scene, opening two Captain Cookie stores and three Dippin’ Dots stores.
With nearly a dozen dessert shops under his helm, Hershman was poised to take over as CEO of 16 Handles a year later.
He felt it was a missed opportunity not to do so. “I could make all these changes, improve this, and in the process make the company a much more valuable company,” he says. “But other than that, I’m kind of going to sit on this basket of eggs and watch them never hatch.”
A facelift, a social strategy and partnerships galore
What Hershman first expected to be “a little simple thing” has blossomed into a larger passion project.
He’s not worried about a loyal customer base: “We already have the secret recipe,” he says, adding that he’s more focused on developing a strategy for expanding customers and the physical location of the brand. That starts with its partnership with Duncan, who oversees the overall brand vision to target different demographics and test marketing campaigns. With 6.8 million followers on his YouTube channel, Duncan is able to reach a younger, male audience – a demographic Hershman wants to appeal to.
Hershman says they’re working on the early stages of a new social strategy to appeal to Gen Z and declined to comment further, but promises it would help grow 16 Handles into “a really big brand.”
Still, Hershman concedes that the brand’s ultimate success isn’t just about having a good social media presence. “It’s also really about building the right locations at the right time and having comfortable places for people that feel safe and open and welcoming and that offer good products,” he says, adding that the stores will soon have a facelift will get. Building more stores will “slowly rebuild this hype train.” He also highlights new partnerships with brands like Oatly, an alternative dairy product that appeals to the health-conscious.
But 16 Handles might get an even more organic boost thanks to the surge in nostalgia during the pandemic, which tugs at hearts at times of uncertainty or economic instability, particularly among younger generations. The post-Great Recession 2010s fro-yo trend harkened back to the 1980s fad. In a post-pandemic world with a looming recession, fro-yo could return to simpler times.
Hershman advises young entrepreneurs at similar crossroads to keep the faith. “It’s cliche, but just take the plunge, take the risk. And never really give up.” He references his journey, explaining that there were many points where it seemed impossible to complete or get funding and many sleepless nights.
“If you’re not willing to die on your hilltop, sometimes you’re not going to get anywhere,” he says.
