In this FDD Talk 2017 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 2017 FDD
- Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Pretzelmaker franchise, based on Items 5 and 6 of the company’s 2017 FDD
- Section IV – Presentation and analysis of Pretzelmaker’s financial performance representations, based on Item 19 of the company’s 2017 FDD, including information on the:
- 2016 average net sales, same-store sales growth, cost of goods sold, labor costs, and rent for the 122 franchised traditional stores that had been continuously in operation for the entire calendar year of 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 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
11 Things You Need to Know About the Pretzelmaker Franchise
Celebrates 26th Birthday
1. On April 26, Pretzelmaker celebrated its 26th birthday by offering a handmade pretzel for 26¢ to any customer who came in to a participating location that day and wished the brand a “Happy Birthday.” Pretzelmaker chose April 26 to celebrate its birthday because it was also National Pretzel Day. The brand also encouraged customers to RSVP on its Facebook page for a chance to win a Pretzelmaker Swag Bag.
2. Lisa Cheatham, Director of Marketing for Pretzelmaker, said, “Pretzelmaker is 26 years young and our innovative pretzel products are always baked fresh all day with a fun spirit and youthful heart. We thought it would be fitting to celebrate our big two six on our favorite day of the year, National Pretzel Day, with 26¢ pretzels – the delicious snack that started it all.”
Charitable Giving to the Leukemia & Lymphoma Society
3. Pretzelmaker along with the other franchises owned by parent company Global Franchise Group (GFG) formed one of the teams helping to raise money for the Leukemia & Lymphoma Society (LLS).
4. According to Chris Dull, president and CEO of GFG, “To date, Global Franchise Group has proudly raised $1.8 million for the Leukemia & Lymphoma Society and we are ready to kick off our 2017 fundraising effort. We have an incredible partnership with LLS through our Bite for the Fight campaign and are able to contribute to LLS’ research to advance life-saving new treatments for blood cancer patients.”
5. GFG has committed to raising $500,000 by the end of 2017 for LLS. The brands under GFG hold their annual in-store pin-up program from August 22 to October 15 and Pretzelmaker made sure to put up a Facebook post in early September encouraging customers to make donations at participating locations or online at GFG’s LLS team page.
Showing Customer Appreciation
6. To celebrate the new year, Pretzelmaker once again declared January as Customer Appreciation Month. All throughout January 2017, customers were able to buy unlimited $1 pretzels (Original or Unsalted) every Tuesday. Customers who took advantage of the promotion at participating locations also received a coupon for free Pretzel Bites with any purchase on their next visit.
7. Pretzelmaker’s Director of Marketing Lisa Cheatham said, “Our customers are the best and Pretzelmaker’s Customer Appreciation Month celebration is our way of thanking them for making us one of the country’s most popular pretzel shops.”
8. Pretzelmaker, which was originally called Pretzelvania, was founded in 1991 by Jeffrey Tripp. The company changed its name the following year to Pretzelmaker in order to start franchising. By 1995, there were around 40 locations around the U.S. and that same year a group of investors bought the company and helped make Pretzelmaker a mall mainstay.
9. In 1998, Pretzelmaker was bought by Mrs. Fields Famous Brands along with another pretzel shop franchise, Pretzel Time. Nearly a decade later, in 2007, both pretzel franchises were sold to NexCen Brands Inc. for a combined total of $29.7 million.
10. Pretzelmaker and Pretzel Time were merged into one brand, Pretzelmaker, in 2010 when NexCen was bought by GFG, which also franchises Marble Slab Creamery and Great American Cookies. Today, Pretzelmaker is one of the largest hand rolled pretzel retailers in the world, with over 360 locations in the U.S. and abroad.
Entrepreneur’s Franchise 500
11. Pretzelmaker has appeared on Entrepreneur’s annual Franchise 500 list three times in the past decade. The brand’s highest rank was No. 99 in 2009, while its lowest rank was No. 129 in 2010. The last time that Pretzelmaker ranked on the list was in 2011 at No. 106.
Section II – Estimated Costs
- Please click here for detailed estimates of Pretzelmaker 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 Pretzelmaker’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
- The data below presents historical revenue and limited expense information for calendar year 2016 for certain franchised Pretzelmaker 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 of 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 217 franchised Stores open and operating as of December 31, 2016. Of these, 122 were Traditional Stores that operated for all of 2016, 28 were Non-Traditional Stores, 54 were Co-Branded Stores, and 13 Stores were not open for the entire 2016 calendar year.