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FDD Talk: The Ben’s Soft Pretzels Franchise Opportunity (Financial Performance Analysis, Estimated Costs, and Other Important Stuff You Need to Know)

by Franchise Chatter on January 17, 2017

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

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In this FDD Talk 2016 post, you’ll learn the following:

  • Section I – Background information on the Ben’s Soft Pretzels franchise opportunity, including relevant news updates
  • Section II – Estimated initial investment for a Ben’s Soft Pretzels franchise, based on Item 7 of the company’s 2016 FDD
  • Section III – Presentation and analysis of Ben’s Soft Pretzels’ financial performance representations, based on Item 19 of the company’s 2016 FDD, including information on the:
  • 2008 to 2015 actual and average gross revenues for the Ben’s Soft Pretzels stores operated by companies related to the franchisor by common ownership which have been open for at least 12 months as of December 31, 2015
  • 2014 and 2015 actual and average gross revenues for the Ben’s Soft Pretzels stores owned by franchisees which have been open for at least 12 months as of December 31, 2015

Section I – Background Information

From Amish Bakery to Fastest Growing Pretzel Franchise

In Elkhart, Indiana in 2008, local businessmen Brian Krider and Scott Jones partnered with Benjamin Miller, a local Amish baker to start Ben’s Soft Pretzels. Miller and his wife are third generation Amish bakers who spent years perfecting their soft pretzel recipe. The company began franchising in 2013 and is growing at a steady pace. Today, Ben’s Soft Pretzels has over 71 locations throughout the United States.

Expanding the Franchise

Ben’s Soft Pretzels is becoming the fastest growing pretzel franchise in the U.S. by pushing expansion in several states. Earlier this year, they announced plans to open several new locations by 2021. Included in their announcement were plans to open 10 new locations in Northern Michigan, 15 new locations in Milwaukee, and 25 new locations in the Chicago area. In August 2016, they announced that 20 new locations were in development for the rest of 2016.

Also aiding the company’s growth are master license agreements with Meijer, a regional Midwest grocery chain, and Walmart Stores, Inc. The Walmart deal, which started in 2012, allows Ben’s Soft Pretzels to open shops in any open Walmart tenant space. They currently have 24 Walmart locations. Their recent Meijer deal will allow the pretzel franchise to open a location in every newly-constructed Meijer.

The company’s founders are not worried about Ben’s Soft Pretzels losing its homemade appeal. Despite all the expansion efforts, every location will continue to make pretzels and sauces on site. The company believes that their made-from-scratch pretzels and small town feel help them to stand out against their competitors.

More Than Just Plain Pretzels

Although their original plain soft pretzel is still their most popular item, Ben’s Soft Pretzels offers many other products. Something all of their offerings have in common is that they’re made from scratch, free of preservatives, and contain quality ingredients.

In addition to their regular-sized pretzels, Ben’s Soft Pretzels offers jumbo-sized pretzels. Other pretzel variations include “Buggy Bites,” bite-sized soft pretzels, and Pretzel Stix.

They recently released two new flavors, Dutch Apple and Jalapeño Cheese. To celebrate the two new flavors, Ben’s Soft Pretzels held a contest through their Facebook page. Every customer who voted on which new flavor is their favorite had a chance to win free pretzels for a year.

Ben’s Soft Pretzels offers four dry seasonings, Parmesan Cheese, Garlic, Cinnamon and Sugar, and Sour Cream and Onion, which customers can shake onto their pretzels. Eleven dipping sauces are also available: Vanilla Icing, Caramel Topping, Hot Fudge, Cheddar Cheese, Marinara, Amish Sweet Mustard, Nacho Cheese, Yellow Mustard, Cream Cheese, and Spicy Mustard.

Ben’s Soft Pretzels also uses its proprietary pretzel dough recipe to make Pretzel Dogs and Italian Pretzel Pockets. The Italian Pretzel Pockets come in three flavors: Ham, Pepperoni, and Provolone and Marinara.

Some Ben’s Soft Pretzels locations also offer a flavor of the month.

Fundraising for Veterans

Since 2015, Ben’s Soft Pretzels has raised $60,000 for the Intrepid Fallen Heroes Fund. The franchise uses many holidays and special events to raise money for the organization.

In October, which is National Pretzel Month, Ben’s Soft Pretzels invited customers to donate money to the fund. For every $1 donation, customers had the opportunity to write their name or their favorite veteran’s name on a star which was hung in the bakery where they made their donation. Ben’s Soft Pretzels also held a contest for veterans. The prize was a VIP pretzel party at the Ben’s Soft Pretzels headquarters in Goshen, Indiana for four veterans and their families.

Earlier in the year, on National Pretzel Day, April 26, Ben’s Soft Pretzels made an appearance on the Today Show. They talked about their efforts to raise money for the Intrepid Fallen Heroes Fund. Also on National Pretzel Day, they gave out a free jumbo pretzel to every customer who donated at least $1 to the fund.

Not Yet Ranked on Entrepreneur’s Franchise 500

Although Ben’s Soft Pretzels is quickly expanding, they are still a fairly new franchise and have not yet landed a spot on Entrepreneur’s Franchise 500 list.

Ben’s Soft Pretzels was named the top fast food franchise in 2015 by franchiserankings.com.

Section II – Estimated Costs

  • Please click here for detailed estimates of Ben’s Soft Pretzels franchise costs, based on Item 7 of the company’s 2016 FDD (updated).

Section III – Financial Performance Representations (Item 19, 2016 FDD) and Analysis

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