FDD Talk 2015: The Flip Flop Shops Franchise Opportunity (Financial Performance Analysis, Estimated Costs, and Other Important Stuff You Need to Know)

In this FDD Talk 2015 post, you’ll learn the following:

• Section I – Background information on the Flip Flop Shops franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Flip Flop Shops franchise, based on Item 7 of the company’s 2015 FDD

• Section III – Presentation and analysis of Flip Flop Shops’ financial performance representations, based on Item 19 of the company’s 2015 FDD, including information on the:

• 2014 average annual and weekly gross sales for the 70 franchised Flip Flop Shops stores in the United States (including stores in U.S. territories) and Canada that operated during the entire reporting period and were open and operating as of December 31, 2014

Section I – Background Information

What do flip flops mean to you? For many, they evoke a care-free ocean lifestyle lived in or near the waters of sunny, relaxing beaches.

Flip Flop Shops is a chain of stores that carries a variety of flip flop brands as well as other causal footwear with the clarion call to Free Your Toes! The company strives to embody an image of both freedom and adventure with its products.

Todd Giatrelis was a Boston entrepreneur who was good at starting, running, and then selling businesses, including a tuxedo rental shop, a dry cleaning store, and a quick-serve pasta restaurant.

After starting up a successful retail and franchising consulting firm (Gates Group), one of his employees (Sarah Towne) noticed the distinct lack of places to purchase flip flops, and so begins the history of Flip Flop Shops in 2004.

Headquartered in Atlanta, GA, franchising began in 2008 and now includes more than 100 shops globally with another 150 in the worldwide development pipeline.

Flip flops are footwear on the upswing of popularity in all kinds of non-beach settings. Here’s how the chain is riding the wave of casual footwear:

A Compelling Vision

Flip Flop Shops isn’t going for any modest goals. To the contrary, their vision is bold and audacious: To establish Flip Flop Shops as the authentic global leader in marketing casual flip flops and casual footwear. To be the #1 franchised retail chain of flip flops and casual footwear throughout the world by building a breakthrough brand and world class franchise system. The satisfaction of our consumers and profitability of our franchisees will be our top priority.

A Franchising Dream Team

Having a bold vision is one thing, while making it happen is another. Co-founders Todd and Sarah are making a go of it by pulling together a dream team of franchising experts including CEO Darin Kraetsch (of Moe’s Southwest Grill fame), president Brian Curin (of Cold Stone Creamery fame), and COO Alan Woods (of Mama Fu’s Asian House fame).

Together they’ve laid out the business objectives and goals they think will lead to success, including having profitable units, securing premiere locations, leading all competitors in unit development, maintaining favorable margins and reliable distribution, achieving operational excellence, creating strong franchisee relations, and becoming a breakthrough brand.

Starting a Movement

You may not have heard of Flip Flop Fridays yet, but you probably will. When company president Brian Curin nearly suffered a heart attack in spite of being young and fit, he wanted to do something to reduce stress and promote heart health in workplaces everywhere.

Teaming up with the American Heart Association, he has launched the “Heart To Sole: Creating a Stress-Free America” campaign. Flip Flop Shops has declared June to be “Stress-Free America Month,” encouraging companies to allow employees to wear flip flops to work each Friday throughout June as a symbol of reducing stress in the workplace to benefit heart health.

Section II – Estimated Costs

• Please click here for detailed estimates of Flip Flop Shops franchise costs, based on Item 7 of the company’s 2015 FDD (updated).

Section III – Financial Performance Representations (Item 19, 2015 FDD) and Analysis