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FDD Talk 2019: Great American Cookies Franchise Review (Financial Performance Analysis, Costs, Fees, and More)

Last updated on April 19, 2022 by Franchise Chatter Leave a Comment
in Bakery Franchise, Cookie Franchise, FDD Talk: Food Franchises, Franchise Earnings



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For the most up-to-date financial information, check out our latest FDD Talk post analyzing Great American Cookies’ average revenues, expenses, and/or profits.

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

America's Most Lucrative Franchises of the Year
  • 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 2019 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 2019 FDD
  • Section IV – Number of franchised and company-owned Great American Cookies outlets at the start of the year and the end of the year for 2016, 2017, and 2018, based on Item 20 of the company’s 2019 FDD
  • Section V – Presentation and analysis of Great American Cookies’ financial performance representations, based on Item 19 of the company’s 2019 FDD, including information on the:
  • 2018 average and median net sales, costs of goods sold, labor, and rent for the franchised Traditional Stores in the sample owned by franchisees with 1-2 Stores, 3-5 Stores, and more than 5 Stores, respectively
  • 2018 average and median net sales for the top third, middle third, bottom third, and all 50 Great American Cookies-Marble Slab Creamery Co-Brand Stores that had been continuously in operation for the entire 2018 calendar year, that were not supplemented with a Satellite, and that provided the franchisor with the presented financial information for the full calendar year 2018
  • 2018 average and median net sales broken down by brand for the 36 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 14 Stores that initially commenced operating as a Co-Brand Store (separately stated)

Section I – Background Information

13 Things You Need to Know About the Great American Cookies Franchise

Parent Company Sold to New Owners

1.  In late November 2018, Levine Leichtman Capital Partners, a Los Angeles-based private equity firm, announced that it had completed the sale of GFG Holding, Inc. to an undisclosed buyer. Global Franchise Group, based in Atlanta, GA, is a strategic brand management company that owns and manages a portfolio of franchised and company-owned brands in the food industry. These brands include Great American Cookies, Round Table Pizza, Marble Slab Creamery, Pretzelmaker, MaggieMoo’s Ice Cream & Treatery, and Hot Dog on a Stick.

2.  Lauren Leichtman, CEO of LLCP, said, “The Global Franchise Group investment has been very successful for LLCP and for the Company’s management team, who have worked tirelessly to build the business over the course of our partnership. We are proud to have enhanced the value of Global Franchise Group through various avenues, including acquiring Round Table Pizza and Hot Dog on a Stick, introducing new concepts, and driving menu innovation to increase same store sales. We are very excited for the future of Global Franchise Group and wish the management team continued success.”

New Location in Louisiana

3.  In early February 2019, it was announced that a co-branded Marble Slab Creamery/Great American Cookies store would be opening later in the year in Alexandria, Louisiana. The store will be located in Cottonwood Corner, a newly-constructed strip center near the intersection with Louisiana Highway 28 West. The store should be built by the end of April, franchisee Jeremy Roy said.


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4.  Roy added, “I’m from the Alexandria area. All of my family lives in Louisiana. It’s cool to be able to come back and grow this business.” Roy, a Bolton High School graduate, started working at Great American Cookies in the Alexandria Mall when he was 19. He eventually bought that store, and at one point had more than 20 others in Texas. He sold the stores in Texas, but kept the one in the mall. Roy said whether the mall store remains there depends on renegotiating the lease, which expires in 2022.

5.  Roy added, “If the terms are favorable, we’d love to stay.” Roy also has franchise agreements for stores in Pineville and Natchitoches. He’s also looking at three other cities in the area. He said, “I’ve always had this idea of taking Great American Cookies outside the mall.”

Gave Away Free Cookies on National Cookie Day

6.  December 4, 2018 was National Cookie Day and to celebrate the occasion, Great American Cookies once again treated customers to one free original chocolate chip cookie at participating stores.

7.  David Kaiser, executive vice president of Great American Cookies, said, “The holidays are officially here and Great American Cookies is thrilled to treat America to one of our famous and delicious original chocolate chip cookies. Great American Cookies is your one-stop holiday bake shop and we believe that everyone deserves a little sweetness this season.”

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Company History

8.  Great American Cookies was founded in 1977 by Michael Coles and his business partner Arthur Karp in Perimter Mall in Atlanta, Georgia (this location is still open today). Coles and Karp each invested $4,000 to develop a business selling gourmet cookies on the strength of an old family recipe passed on to Karp by his grandmother. Initially, Coles and Karp were turned down by mall owners and managers, who believed that a standalone cookie store was not a sound business idea.

9.  The first Great American Cookies store was an immediate success and Coles and Karp began franchising the concept, which was initially called The Original Great American Chocolate Chip Cookie Company. In 1985, as national franchising rolled out, the company changed its name to Great American Cookies. Coles and Karp continued to own and run the company over the next decade, but decided to sell Great American Cookies to Mrs. Fields Famous Brands in 1998.

10.  Great American Cookies remained under Mrs. Fields Famous Brands for the next 10 years before being acquired by NexCen Brands Inc. for its Quick Service Restaurant portfolio, which included sister companies Marble Slab Creamery, MaggieMoo’s Ice Cream & Treatery, and Pretzelmaker. Since July 2010, this portfolio of brands has been owned by Global Franchise Group, LLC, an affiliate of Levine Leichtman Capital Partners, and managed by GFG Management.

11.  While there are more solo Great American Cookies locations, the franchise is sometimes co-branded with Global Finance Group’s other treat brands, especially MaggieMoo’s Ice Cream & Treatery and Marble Slab Creamery.

12.  Levine Leichtman Capital Partners sold Global Finance Group to an undisclosed buyer in November 2018.

Entrepreneur’s Franchise 500

13.  Great American Cookies ranked No. 186 on Entrepreneur’s 2019 Franchise 500 list.

Section II – Estimated Costs

  • Please click here for detailed estimates of Great American Cookies franchise costs, based on Item 7 of the company’s 2019 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 2019 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2016

  • Outlets at the Start of the Year:  341
  • Outlets at the End of the Year:  349
  • Net Change:  +8

2017

  • Outlets at the Start of the Year:  349
  • Outlets at the End of the Year:  360
  • Net Change:  +11

2018

  • Outlets at the Start of the Year:  360
  • Outlets at the End of the Year:  368
  • Net Change:  +8

Company-Owned

2016

  • Outlets at the Start of the Year:  0
  • Outlets at the End of the Year:  0
  • Net Change:  0

2017

  • Outlets at the Start of the Year:  0
  • Outlets at the End of the Year:  0
  • Net Change:  0

2018

  • Outlets at the Start of the Year:  0
  • Outlets at the End of the Year:  0
  • Net Change:  0

Section V – Financial Performance Representations (Item 19, 2019 FDD) and Analysis

Part 1 – Financial Information for Single-Brand Stores

  • The data below presents historical revenue and limited expense information for calendar year 2018 for certain franchised 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 2018, 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 2018.
  • There were 368 franchised Stores open and operating as of December 31, 2018. Of these, 166 Stores are Traditional Stores that were open the entire calendar year of 2018 and were included in the computation. Of the 202 Stores that were not included in the computation, 40 Stores were Non-Traditional Stores, 116 Stores were Co-Branded Stores, and 46 locations were not open for the entire calendar year of 2018.
  • 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.

Overall Sample



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