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

by Franchise Chatter on August 4, 2015

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

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Kolache Factory by jason tinder

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

  • Section I – Background information on the Kolache Factory franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a Kolache Factory franchise, based on Item 7 of the company’s 2015 FDD
  • Section III – Presentation and analysis of Kolache Factory’s financial performance representations, based on Item 19 of the company’s 2015 FDD, including information on the:
  • 2014 and 2013 average sales, food costs, gross income, wages and 401(k) benefits, payroll taxes, rent, utilities, supplies, phone, advertising, insurance, maintenance, property taxes, professional services, auto, credit card charges, over/short, other operating expenses, lease of equipment, total operating expenses, and EBITDA for the High, Middle, and Low Groups of company-owned Kolache Factory stores

Section I – Background Information

The Kolache Factory brings an eastern European traditional food to the United States through its expanding quick-serve concept. With more than 48 locations open nationwide, the chain is looking to quickly expand further, with new stores planned in Frisco, Shenandoah and Murphy, TX; Virginia Beach, VA; Albuquerque, NM; and Denver, CO.

This privately-owned and operated chain is headquartered in Houston, TX, and has garnered such praise as being named one of the Top 5 Drive-Thrus in America by the Food Network and one of the Top 50 Food Service Bakeries in the U.S. by Modern Baking magazine.

It all started back in 1982 when John and Jerri Banks were looking to fill the need for an interesting breakfast food that could be eaten on the go. The biggest initial challenge was educating people on what the heck a kolache even is.

Here’s how the Kolache Factory brings a bit of the Old World to the New World:

An Old-World Recipe

It’s an incredibly popular food, which explains why there are annual kolache festivals all over the world. It was created in the Czech Republic and Slovak region, and dates back to at least the 1700s.

It’s essentially a ball of dough stuffed with various fillings from sweet to savory, including meats, cheeses, fruits, and vegetables. Because they’re self-contained, they’re easy to eat on the run for any meal. On the outside, they just look like a perfectly baked dinner roll, until you bite into it to discover the sweet or savory filling inside.

They’ve taken root in Texas, of all places, because that state actually has a Czech Belt, a stretch of central and southern Texas where immigrants from what’s now the Czech Republic have settled.

The chain will ship fresh kolaches for overnight delivery to most locations.

Kolache and More

Besides the 25 different varieties of kolaches, the chain offers gourmet Katz coffee (a small-batch custom roaster based in Houston that uses fair trade, organically-grown coffee) and a wide range of other traditional pastries, including cinnamon rolls, croissants, strudel niks, and other treats.

In the Food Media Spotlight

The kolache has been named a red-hot food trend in 2015. Acclaimed food critic Andrew Knowlton, writing for Bon Appétit Magazine, noted “The one baked good I’ll stand in line for? Kolache.” He also showcased the food on a Today Show segment. This kind of general publicity for the kolache has been a windfall for the Kolache Factory.

The Secret’s in the Dough

Part of the old-world charm of the kolache is that you can’t just whip one out like a burger on an assembly line. This is a sweet yeast dough that must be made from scratch fresh each day to really work. The dough must be kneaded, allowed to rise, shaped, allowed to rise again, filled, and then allowed to rise a third time before baking.

The variety, of course, comes in the endless combinations of what you can put inside to tempt every palate.

Section II – Estimated Costs

  • Please click here for detailed estimates of Kolache Factory 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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