In this FDD Talk 2017 post, you’ll learn the following:
- Section I – Background information on the Pandora franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Pandora 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 Pandora franchise, based on Items 5 and 6 of the company’s 2017 FDD
- Section IV – Presentation and analysis of Pandora’s financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:
- 2016 average, median, high, and low gross sales for the 264 franchised Pandora Stores located in the United States, which were continuously open and operating from January 1, 2016 through December 31, 2016
- 2016 range of gross sales by quartile for the 264 franchised Pandora Stores located in the United States, which were continuously open and operating from January 1, 2016 through December 31, 2016
Section I – Background Information
11 Things You Need to Know About the Pandora Franchise
Expands Strategic Corporate Alliance with Disney
1. At the beginning of July, Pandora announced that it had expanded its strategic Corporate Alliance with The Walt Disney Company (Disney) to cover additional markets across Europe, the Middle East, and Africa (EMEA). This expansion means that Pandora’s Disney-themed jewelry will now be available to customers in almost all of Pandora’s global markets.
2. New products will be launched in October 2017 with the release of Pandora’s Disney collection that features hand-finished sterling silver and two-tone charms and bracelets. The collection showcases Mickey and Minnie Mouse as well as several Disney Princesses. About 30 new pieces of Disney jewelry will be added to Pandora’s existing Disney collection.
3. David Allen, President of Pandora EMEA region, said, “For some time now, we have received requests from our customers across the EMEA region for products from the Disney collection and I am delighted that we are now able to bring them to our stores in the region.”
4. The Disney collection will be available at Pandora concept stores, e-stores, and in selected department stores. Also, Pandora’s charm bracelet will now be the Official Charm Bracelet of Disneyland Paris in France.
Enters Indian Market
5. Towards the end of April, Pandora opened its first concept store in the Mall of India in the Noida region of Delhi. Pandora says that the new store marks a milestone for the company as it represents Pandora’s successful overall strategy of expanding its branded network globally.
6. The concept store is owned and operated by Pandora’s distribution partner Pan India Charms and Jewellery Private Limited. Pandora plans to open around 50 more stores across India within the next three years with an initial focus on Delhi, Mumbai, and Bangalore. At least five stores are scheduled to open by the end of 2017.
Pushing Back Against U.S. Slowdown
5. At the end of the first quarter of 2017, Pandora announced that its U.S. sales had declined for the second quarter in a row due to what the company calls a “difficult” retail environment, particularly in American malls. Pandora reported that first quarter revenue had declined 10 percent.
6. The company is now hoping that it can revive its biggest market by replacing under-performing stores and releasing new products. Chief Executive Officer Anders Colding Friis said, “We’re not just waiting for the good times to return to the U.S. retail market – we see things we can do now in terms of new products and new product categories. We see good possibilities for strengthening our business in the current environment.”
7. Friis also reported that Pandora’s U.S. Valentine’s Day collection had been “weak,” but products released before and after Mother’s Day had “gained traction.” The CEO also notes that a new open-ended bracelet, which was released in the middle of the second quarter, seems to be doing well and that Pandora still sees “good opportunities in the U.S. market.”
8. Pandora was founded in 1982 by Danish goldsmith Per Enevoldsen and his wife Winnie Enevoldsen as a family-run jewelry shop in Copenhagen, Denmark. The couple initially began importing jewelry from Thailand on a small scale. After a few years as successful wholesalers, the first in-house designer joined Pandora and the company began to focus on creating its own style of jewelry.
9. In 1989, Pandora established a manufacturing site in Thailand, which is still in operation today, and over the next decade, the company began selling affordable, hand-finished jewelry to the mass market. In 2000, Pandora launched its now signature charm bracelets in the Danish market. Within a few years, the bracelets grew in popularity and Pandora started to expand internationally and entered new markets such as the U.S., Germany, and Australia.
10. Due to high demand, Pandora opened three more manufacturing facilities in Thailand by 2010. Today, Pandora products are sold in more than 100 countries in approximately 2,100 concept stores.
Entrepreneur’s Franchise 500
11. Pandora has yet to appear on Entrepreneur’s annual Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of Pandora 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 Pandora’s 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 – Statement of Actual, Average, and Median Gross Sales for Pandora Stores
A. Actual and Average Gross Sales
- Below is a statement of actual and average Gross Sales compiled from 264 franchised Pandora Stores located in the United States (“Franchised Stores”), which were continuously open and operating from January 1, 2016 through December 31, 2016 (“2016 Accounting Period”) and which reported the results from their operations to Pandora.
- As used in Item 19, the term “Gross Sales” means all revenue and income from any source derived or received by the Franchised Stores from, through, by, or on account of the operation of the Store, whether received in cash, in services, in kind, from barter and/or exchange, on credit (whether or not payment is actually received) or otherwise, less the amount of any documented refunds given in good faith to customers by the franchisee and less any sales taxes.
- Pandora obtained this Gross Sales information from unaudited franchisee reports submitted to it consistent with its reporting requirements. Pandora has not audited or otherwise reviewed the Gross Sales information submitted to it.
- The Franchised Stores included in Item 19 are primarily located within regional shopping centers or malls.