In this FDD Talk 2017 post, you’ll learn the following:
- Section I – Background information on the Great American Cookies franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Great American Cookies franchise, based on Item 7 of the company’s 2017 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Great American Cookies franchise, based on Items 5 and 6 of the company’s 2017 FDD
- Section IV – Presentation and analysis of Great American Cookies’ financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:
- 2016 average net sales, costs of goods sold, labor costs, and rent for the 199 franchised Traditional Stores that had been continuously in operation for the entire calendar year 2016, 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 2016
- 2016 average net sales for the franchised Traditional Stores in the sample owned by franchisees with 1-2 Stores, 3-5 Stores, and more than 5 Stores, respectively
- 2016 average net sales for the top third, middle third, bottom third, and all 20 Great American Cookies-Marble Slab Creamery Co-Brand Stores that had been continuously in operation for the entire 2015 and 2016 calendar years, that were not supplemented with a Satellite, and that provided the franchisor with the presented financial information for the full calendar year 2016
- 2016 average net sales broken down by brand for the 15 Stores that initially commenced operating as either a Great American Cookies or Marble Slab Creamery Store and then added on the other brand to become a Co-Brand Store, and the 5 Stores that initially commenced operating as a Co-Brand Store (separately stated)
Section I – Background Information
9 Things You Need to Know About the Great American Cookies Franchise
Celebrated 40th Anniversary
1. Great American Cookies celebrated its 40th anniversary on June 22 by selling regular cookies for 40 cents a piece throughout the day. There was a limit of one dozen cookies per person at the 40-cent price. In addition to the 40-cent cookies, participating Great American Cookies locations gave away a free cookie cake, which was decorated with “Happy Birthday” in chocolate and white icing, to the first 40 customers.
2. Earlier in the year, on Tax Day (April 18), Great American Cookies continued its annual Tax Day tradition by giving away a free Birthday Cake Cookie to customers at participating locations. This was the fifth year that Great American Cookies gave away free cookies on Tax Day. The company chose its Birthday Cake Cookie to give away in anticipation of its birthday celebration later in the year.
3. Leading up to the big birthday celebration in June, Great American Cookies had various deals available during March, April, and May. In March, customers could get a Double Doozie for $2 every Tuesday of the month. In April, Great American Cookies gave away a free regular drink with every purchase of a Double Doozie. There were several different deals available in May including: buy one, get one Double Doozie free every Tuesday; buy a half dozen Double Doozies, get a half dozen free on May 10; and a free cookie to customers who shared a selfie on Great American Cookies’ social media channels on May 12.
New Location Celebrates Grand Opening
4. In late March, the Great American Cookies store at Dolphin Mall in Miami, Florida celebrated its grand opening by holding the “Great American Cookies Celebration Spree.” The location gave away a free cookie cake to the first 100 customers, with each person receiving a cookie cake with a random celebration. Also, every customer that came into the Dolphin Mall store on the day of the grand opening received a free regular cookie.
5. Great American Cookies was founded in 1977 by Michael Coles and his business partner Arthur Karp in Atlanta, Georgia. Coles and Karp each invested $4,000 to develop a business selling gourmet cookies using a family recipe passed on to Karp from his grandmother.
6. The business was initially named The Original Great American Chocolate Chip Cookie Company, but was renamed Great American Cookie Company in 1985. The name was eventually shortened to Great American Cookies.
7. Coles sold Great American Cookies to Mrs. Fields Famous Brands in 1998. The company was sold again in 2008 to NexCen Brands Inc., whose brand portfolio included Marble Slab Creamery, MaggieMoo’s Ice Cream and Treatery, and Pretzelmaker. Since 2010, this portfolio of brands has been owned by Global Franchise Group, LLC.
8. Great American Cookies began franchising a year after the first store opened and today there are over 350 locations in the U.S. and internationally.
Entrepreneur’s Franchise 500
9. Great American Cookies has appeared on Entrepreneur’s annual Franchise 500 list almost every year in the past decade, except in 2007 and 2008. The company’s highest rank was No. 116 in 2011, while its lowest rank was No. 319 in 2017.
Section II – Estimated Costs
- Please click here for detailed estimates of Great American Cookies franchise costs, based on Item 7 of the company’s 2017 FDD.
Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees
- Please click here for detailed information on Great American Cookies’ initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2017 FDD.
Section IV – Financial Performance Representations (Item 19, 2017 FDD) and Analysis
Part 1 – Financial Information for Single-Brand Stores
- The data below presents historical revenue and limited expense information for calendar year 2016 for certain franchised Great American Cookies Stores. The expenses listed below do not reflect any start-up expenses that you may incur.
- The sample used to obtain this information includes only franchised Traditional Stores that had been continuously in operation for the entire calendar year 2016, 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 2016.
- There were 349 franchised Stores open and operating as of December 31, 2016. Of these, 199 Stores are Traditional Stores that were open the entire calendar year of 2016 and were included in the computation. Of the 150 Stores that were not included in the computation, 30 Stores were Non-Traditional Stores, 82 Stores were Co-Branded Stores, and 38 locations were not open for the entire calendar year of 2016.
- The computation for the same-unit sales includes franchised locations that were open for the entire calendar years of 2016 and 2015.
- Costs of Goods Sold include costs such as the cost of food ingredients used to make finished products, shipping charges, etc.
- Labor Costs may include costs such as salaries and wages for full-time and part-time employees, employer contributions for F.I.C.A. taxes, federal unemployment taxes, state unemployment taxes, workers’ compensation, group health insurance, if any, 401(k), if any, wages for contracted labor, expense of “help wanted” ads, employee training expenses, etc.
- Rent may include costs such as flat rent, percentage rent, common area maintenance, depreciation of leasehold improvements, depreciation of fixtures and equipment, real estate commissions, real estate taxes, real estate insurance, utilities, etc.
- There are other expenses in operating a Store that are not identified in the table below.
- A franchisee may be a multi-Store operator but counted in the 1-2 Store category because of all of his or her Stores, only 1 or 2 satisfied all required criteria (applicable to larger Store categories under the same rationale).
- The data below was taken from financial reports submitted by franchisees. The franchisor has not audited or verified these reports, although it has no information or other reason to believe that they are unreliable.