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FDD Talk 2015: The Erbert & Gerbert’s Franchise Opportunity (Financial Performance Analysis, Estimated Costs, and Other Important Stuff You Need to Know)

by Franchise Chatter on July 21, 2015

in FDD Talk 2017: Food Franchises, Franchise Earnings, Sandwich Franchise

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Erbert & Gerbert Photo by lammoreaux

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

  • Section I – Background information on the Erbert & Gerbert’s franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for an Erbert & Gerbert’s franchise, based on Item 7 of the company’s 2015 FDD
  • Section III – Presentation and analysis of Erbert & Gerbert’s financial performance representations, based on Item 19 of the company’s 2015 FDD, including information on the:
  • 2014 average revenues for the franchised Erbert & Gerbert’s restaurant businesses that were open for all 12 months during the 2014 calendar year
  • 2014 average food costs for the franchised Erbert & Gerbert’s restaurant businesses that were open for all 12 months during the 2014 calendar year and who delivered financial reports to the franchisor showing food costs

Section I – Background Information

Erbert & Gerbert’s Sandwich Shop, which added 11 new franchises in 2014 and had record sales for its limited-time menu items and its gourmet soup offerings, is continuing to focus on expansion in 2015 with 21 new franchises planned. The chain is targeting Indiana, Iowa, Minnesota, Montana, North Carolina, North Dakota, South Dakota and Wisconsin.

Six shops and 15 bistro locations are planned for 2015. The chain opened five shops in 2014, two in Minnesota and one each in Nebraska, New York and Arizona, and six college bistro locations, three at Indiana University and single units at Creighton University, Marquette University and Southwest Minnesota State University.

Erbert & Gerbert’s also plans to expand its digital and mobile advertising programs and increase its focus on streaming radio through Pandora. Digital menus are being installed at new locations, and more limited-time menu additions are planned.

Chain Enters New States

Erbert & Gerbert’s Sandwich Shop opened its first Iowa location in May 2015 as Lloyd and Jan Bier opened the first of three stores. Additional locations are opening in Iowa, where E&G continues to market the brand to potential franchisees.

Franchisee Colin Zeman opened the first Montana shop in April 2015, choosing Missoula as his first location.

The chain expanded into New York in August 2014 with its first store in Buffalo. Owners Rustan and Holly Carpenter’s store is set in historic Elmwood Village. The Carpenters intend to develop three more stores in the region.

Erbert & Gerbert’s entered Arizona in August 2014 with a shop in Tempe near Arizona State University. The store is the first of more than a dozen planned by franchisees Brad and Gillenne Budde.

Nebraska was added to the E&G list of states in June 2014 with a new store in Kearney, owned by Dave and Kim Sheldon.

Stories Sparked Company, Sandwich Names

The chain was founded in 1987 in Eau Claire, Wis., by Kevin and Beth Schippers, who opened their first store in 1988. The company and its sandwiches are named after characters in colorful stories told by Kevin’s father. The stories starred Erbert and Gerbert and featured such secondary characters as Geeter and Girf, with elements such as Halley’s Comet.

The Schipperses sold the company in 2003 to Eric Wolfe and other investors because Kevin decided to enter the ministry. They still own the original store, and Kevin, who is a minister in Eau Claire, has a role with the company as a consultant.

‘Gutsy’ Sandwich Method

Erbert & Gerbert’s sandwiches are prepared by slicing the bread open and removing the soft white dough inside. Those “guts” are laid on top of the finished sandwich. This practice sparked a character called Mr. Guts, who appears in videos on the company’s website.

The chain has partnered with Udi’s Gluten Free Foods to provide several gluten-free soup and sandwich options that are prepared separately from other foods to avoid cross-contamination.

LTO Menu Items

Several limited-time menu options have been added within the past year:

  • April 2015: The Cosmo, featuring deli pastrami, pepper jack cheese, lettuce, tomato and mayo, topped with Erbert & Gerbert’s Sweet Fig Sauce.
  • February 2015: The Neptune, a lobster salad sandwich on Naan flatbread, featuring Curtido, mayo, lettuce and lemon.
  • October 2014: The Rubis, a returning menu item featuring chicken breast, bacon, pepper jack cheese, lettuce, tomato and mayo, along with E&G Raspberry Chipotle Sauce.
  • August 2014: The Quatro, sliced chicken breast, bacon, cheddar cheese, cucumber, lettuce and mayo, topped with cranberry wasabi sauce.

New Soups Join the Menu

Two new soups were added in 2014, including New England Clam Chowder in September 2014. The soup blends clam meat, potatoes and onion in a thick, creamy clam broth, highlighted by a bit of butter and garlic.

In January 2014, Buffalo Chicken Soup heated up the menu, featuring chicken, buffalo sauce, green and red peppers, onion and celery, enhanced by bleu cheese and tabasco.

25th Anniversary Prize Winner

Elizabeth Hirt of Bemidji, Minnesota, won a 2013 Kia Soul as the grand-prize winner of the Erbert & Gerbert’s 25th Anniversary Scratch ‘N’ Win Sweepstakes. The award was announced in January 2014.

Section II – Estimated Costs

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

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

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