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

by Franchise Chatter on November 6, 2015

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

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Great Harvest Bread Company Photo by Mack's Apples

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

  • Section I – Background information on the Great Harvest Bread Company franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a Great Harvest Bread Company franchise, based on Item 7 of the company’s 2015 FDD
  • Section III – Presentation and analysis of Great Harvest Bread Company’s financial performance representations, based on Item 19 of the company’s 2015 FDD, including information on the:
  • 2013, 2012, and 2011 average gross sales for Great Harvest Bread Company bakeries that (a) were open and operating for the full 12-month period ended December 31 in the year indicated and (b) have reported their sales to the franchisor for the period listed
  • 2013 vs. 2012 and 2012 vs. 2011 comparable store average sales percentage change and comparable store median sales percentage change for Great Harvest Bread Company bakeries that (a) have been open for at least 12 full months at the end of the earliest period presented and (b) have reported gross sales to the franchisor for the full periods presented (i.e. all 24 months presented)
  • 2013, 2012, and 2011 average gross sales, variable costs, fixed costs, total operating expenses, and net operating income for Great Harvest Bread Company bakeries open 12 months or more as of January 1 of the reporting year
  • pro forma worksheets that provide a detailed breakdown of certain average costs (as a percentage of sales) from 2013 for 127 reporting Great Harvest Bread Company bakeries

Section I – Background Information

Every once in a while you stumble across a franchise that has a really great backstory, and Great Harvest Bread Company is one of those. In the early 1970s, Pete and Laura Wakeman were working their way through Cornell University, and what they did to help pay tuition was bake bread. But not just any bread – they baked amazingly flavorful whole grain bread from scratch.

They married in 1975 and went on an adventurous hike of the entire north-south length of the state of Montana. They loved it so much they decided to stay put, and opened the first location of the bread store in Great Falls, Montana in 1976. Needless to say, people wanted more, so a second location was established in 1978 in Kalispell, Montana, then followed by a third location in Spokane, Washington. Pete and Laura called it the Freedom Franchise.

Headquartered in Dillon, Montana, there are now more than 200 Great Harvest bakery locations in the United States. Here’s how Great Harvest Bread Company keeps the dough rising in the bakery industry:

Franchisee Voice

When the Wakemans sold their company in 2001, it was to company Chairman Nido Qubein, President and CEO Mike Ferretti, and a group of partners. Qubein and Ferretti now own all of the company, and they take an innovative approach to franchising. They formed a Franchise Agreement Board, made up of bakery franchise owners elected to serve. Any changes made to the franchise agreement must be approved by this board.

Progressive Values

The corporate culture at Great Harvest centers on authenticity with just the right blend of camaraderie and individuality. Its mission, as described on the company website, is to “Be loose and fun, bake phenomenal bread, run fast to help customers, create strong exciting bakeries, and give generously to others.”

Freedom Franchising

There’s more to Great Harvest franchising than its innovative Franchise Agreement Board. The company also encourages each bakery location to be unique, which is a far cry from many franchise operations where everything must be run exactly the way the company has figured it out to work. For those with the entrepreneurial mindset, there’s often little opportunity to exercise any autonomy in how to run the business.

Here’s how it pans out at Great Harvest, according to its website: “Let’s create unique neighborhood bakeries that are a reflection of the Great Harvest brand and the bakery owner. We are no cookie cutter franchise. We are a freedom-based, healthy franchise that encourages excellence and individuality (not to mention a spirit of fun and generosity).”

Keeping It Simple

The wheat used in Great Harvest bread comes from family farms local to Montana, and the wheat is milled into fresh flour each day at every location. The company’s simplest bread recipe is whole wheat flour, water, yeast, salt, and local honey. It doesn’t get much simpler than that!

Back in the day the entire menu consisted of that one simple loaf of bread. Now you can enjoy a wide range of sandwiches, cookies, muffins, and artisan breads in an array of flavor combinations.

Section II – Estimated Costs

  • Please click here for detailed estimates of Great Harvest Bread Company franchise costs, based on Item 7 of the company’s 2015 FDD.

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

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