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

by Franchise Chatter on August 26, 2015

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

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Pretzelmaker Photo by Julie Chan

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

  • Section I – Background information on the Pretzelmaker franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a Pretzelmaker franchise, based on Item 7 of the company’s 2015 FDD
  • Section III – Presentation and analysis of Pretzelmaker’s financial performance representations, based on Item 19 of the company’s 2015 FDD, including information on the:
  • 2014 average net sales, same-store sales growth, cost of goods sold, labor costs, and rent for the 113 franchised traditional stores that had been continuously in operation for the entire calendar year of 2014, that were not co-branded with another concept or supplemented with a satellite, and that provided the franchisor with the presented financial information for the full calendar year 2014
  • 2014 average net sales and same-store sales growth for Pretzelmaker franchisees in the sample that operated 1-2 stores, 3-5 stores, and more than 5 stores, respectively

Section I – Background Information

Pretzelmaker continues to add new twists to old favorites in its pretzel product lineup while keeping the stalwart menu items.

In February 2015, Pretzelmaker launched the Bowl of Bites with two flavors: Chili & Cheese and Strawberries & Cream, giving customers a choice between savory and sweet.

The pretzel chain took its Pretzel Bites up a notch in April 2015 with the national launch of the new Mozzarella Stuffed Bites, which had proven very popular in early market testing.

Pretzelmaker isn’t all about pretzels. Added to the menu in July 2015 was the Twisted Citrus line of beverages. Varieties offered were Limeade, Cherry Limeade, Frozen Limeade, Frozen Cherry Limeaid and Orange Dream.

Chain Was Originally Pretzelvania

Pretzelmaker was founded in 1991 by Jeffrey Trip as Pretzelvania. The company name was changed early to Pretzelmaker for franchising, which started in 1992. The brand eventually became a common sight in shopping malls. In 2010, Pretzelmaker was merged with Pretzel Time, which also started in 1991 and was originally named Mr. Pretzel.

Pretzelmaker, which was No. 264 on Entrepreneur’s 2015 Franchise 500, specializes in fresh, hand-rolled soft pretzel products. The brand created the Pretzel Dog, Mini Pretzel Dog and Pretzel Bites. Pretzelmaker, the second-largest soft-pretzel brand in the U.S., has more than 360 locations, also including stores in Canada, Guam, Mexico, Russia and Saudi Arabia.

The brand is managed by Global Franchise Group LLC, a brand management company and franchisor that also manages Great American Cookies, Marble Slam Creamery, MaggieMoo’s Ice Cream & Treatery and Hot Dog on a Stick. Global Franchise Group is a portfolio company of independent investment firm Levine Leichtman Capital Partners.

Tongue Twisters

Pretzelmaker, in observance of National Pretzel Day in April 2015, challenged customers to do tongue twisters. Those who recited a tongue twister, either an original creation or the brand’s official tongue twister, earned a free soft pretzel.

Engaging Youth Through Snapchat Campaign

Seeking to engage with teenage customers, Pretzelmaker launched its first Snapchat promo in October 2014. Customers were encouraged to “spook” store staff or “Snap” a scare for a $1 discount on the seasonal Fright Bites combo; select Snaps earned free combos. Pretzelmaker also posted a Snapchat story Oct. 30 that offered an exclusive Pretzel Bites offer to followers.

Chain Enters Russia

Pretzelmaker entered Russia in October 2014 with the opening of two stores, one in Perm and the other in Kirov. The stores were opened through an agreement with Alendvic, a fast food brand operator in Russia, where quick-service restaurants are showing growth.

Section II – Estimated Costs

  • Please click here for detailed estimates of Pretzelmaker 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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