NEW YORK (The Deal) -- When freshly squeezed juice retailer Jamba (JMBA) reports its quarterly results early next month, the potential is there for more franchising of its Jamba Juice store locations, as well as more share buybacks.

All of this is thanks, in part, to a recently concluded campaign from activist investors that resulted in two of the dissidents being added to the company's board.

Jamba Chief Executive James D. White said recently that the company is on track to reach its goal of 90% franchised stores and only 10% company-owned units by the end of the year, a move that is expected to generate between $60 million and $70 million in cash.

Emeryville, Calif.-based Jamba also said recently that it has hiked its share repurchase authorization from $25 million to $40 million and that it plans to use some of the proceeds from the franchising initiative to buy back shares.

In May, the company said that it had repurchased about $21.8 million worth of shares, leaving $18.2 million of unspent buyback funds that the board had authorized.

However, that is just the beginning. Analysts expect Jamba to use the bulk of the proceeds from new franchising deals over the next few months to buy back shares, a move that is expected to drive stock price appreciation in the coming months.

The cash-generation power of franchising could be even greater.

As previously reported, people close to the situation said that it could rise to as high as $100 million.

The franchising moves, the company's zero debt and a recent move to open nine co-branded locations with Brueggers Bagels has convinced Wedbush analysts to give Jamba an outperform market rating.

"We've seen the franchising model become more successful in the way the street perceives things," said Wedbush Analyst Phil Terpolilli. "When a company goes through this process they've been rewarded from a valuation perspective."

The franchising initiative is moving faster than the company expected. Jamba initially was scheduled to complete it early next year, but in May the company said it planned to get to its 90%/10% goal by year's end.

Jamba has already completed the franchising of 34 company-owned stores since the beginning of the year, and it also struck a deal in April to franchise 100 additional Jamba Juice locations in California to Vitaligent for $36 million.

"They will reach their goal faster than expected," he said.

For Pappas and Welling, that is good news.

The stock price is trading at about $15.59 a share, higher than the $10.54 a share to $12.54 a share price originally paid by Engaged Capital to acquire its 7% stake last July, according to a regulatory filing.

Engaged Capital has since raised its stake to 10.2%.

Another analyst suggested that the move to franchise most of the remaining stores made a lot of sense because Jamba Juice executives have "tended to be poor operators."

In addition, the shift allows Jamba to concentrate on innovating in new areas: cold-pressed fresh juice anyone?

It also assists them in setting up new franchise operations in the United States and abroad. Last month, Jamba said that it has set up a franchise arrangement for 70 stores in Indonesia over the next 10 years, following on stores in Canada, the Philippines, South Korea and a number of other countries.

Terpolilli suggested that it makes sense to keep a few company-owned stores to help test and innovate.

"They can see in terms of actual dollars what works and what doesn't," he said.

A Jamba spokesman declined to comment further on the company's strategy.

Jamba is set to announce second-quarter financial results on Aug. 6. Look for more juicy franchising and buyback announcements then.

Read more from: