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

• Section I – Background information on the Fleet Feet franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Fleet Feet 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 Fleet Feet franchise, based on Items 5 and 6 of the company’s 2019 FDD

• Section IV – Number of franchised and company-owned Fleet Feet 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 Fleet Feet’s financial performance representations, based on Item 19 of the company’s 2019 FDD, including information on the:

• 2017 and 2018 average, median, lowest, and highest gross sales (as well as the gross sales for the 25th and 75th percentile) for all franchised, affiliate-owned, and franchised and affiliate-owned (combined) Fleet Feet store locations in operation for at least 24 months

• 2017 and 2018 average, median, lowest, and highest store growth for all franchised, affiliate-owned, and franchised and affiliate-owned (combined) Fleet Feet store locations in operation for at least 24 months

• average, median, lowest, and highest first year gross sales for all franchised (new single-unit and new multi-unit, separately stated) and affiliate-owned stores beginning operation between January 1, 2013 and December 31, 2017

Section I – Background Information

22 Things You Need to Know About the Fleet Feet Franchise

Debuts Innovative App with Revamped Customer Rewards

1.  At the end of February 2019, Fleet Feet launched its revamped customer rewards program in conjunction with a new app. In addition to a traditional spend-and-get purchase-based program, the Fleet Feet Rewards Program features a system that incentivizes running, community engagement, localization, and more, allowing customers to earn “Miles” to redeem for running trips, race entries, branded apparel and gear, and other running-related items.

2.  According to Ben Cooke, vice president of operations for Fleet Feet, “We wanted the rewards and opportunities customers could earn to include offerings both nationally and locally that would excite, inspire, or delight. We’re offering incentives that signify a new age for the retail rewards program – everything from Fleet Feet branded apparel to a chance to win an entry to sold-out running events like the Chicago Marathon or Leadville Trail 100 Run.”

3.  Through the app, customers create an account and select their local Fleet Feet as their home store for access to local offers and special events. Customers can also link their account to their Strava or Garmin profile, and accrue Reward “Miles” for the physical miles logged from running or walking. Customers earn additional “Miles” specifically through engagement on Fleet Feet’s social media channels, checking in at store training runs, or by attending local in-store special events.

4.  Customers accumulate “points” on purchases from any Fleet Feet store or online at fleetfeet.com. Every dollar spent creates one “point.” For every 150 points accrued, customers earn a fifteen dollar reward for redemption at any Fleet Feet location and at fleetfeet.com. The Fleet Feet app also features both a journal tab and events tab, where customers can browse the latest informational blog posts, search for upcoming fun runs or training sessions, access exclusive content, and answer trivia questions for additional “Miles.”

5.  App users have the opportunity to enter the sweepstakes offerings to both the Leadville Trail 100 Run and the Chicago Marathon through April 20 and June 19, respectively, by redeeming 50 accrued “Miles” apiece.

6.  Cooke added, “Our customers are passionate and engaged, and it was a big goal of ours to create a program that celebrated and encouraged their efforts and participation in our local running communities, not just those related to purchases. The app and program allows us for the first time in brand history to recognize and reward our customers based on how they both choose to shop and engage with us, making this program truly customer-centric.”

Captures One-Millionth Customer Foot Scan Through In-Store 3D Scanning Technology

7.  In late March 2019, Fleet Feet announced that it had scanned its one-millionth pair of feet as part of its exclusive in-store outfitting experience known as fit id™, less than two years after introducing the 3D scanning technology at its stores.

8.  Joey Pointer, CEO and president of Fleet Feet, said, “The fit id experience is the intersection of both technology and our outfitters’ expertise and passion. We have over 40 years’ experience outfitting and now with fit id, 3D foot scanning and one million foot scans and counting, we can harness those insights and information in ways that no other retailer in the world can in order to create better outcomes for customers.”

9.  Introduced in June 2017 in collaboration with Fleet Feet’s technology partner Volumental, 3D foot scanning has created a collective and ever-growing data hub of insights regarding aggregate customer foot shape and size, fueling both innovation and enhanced customer personalization of solutions and advice.

10.  Data from the 3D foot scans has allowed Fleet Feet to identify trends and insights that inform better purchasing decisions. Specifically, Fleet Feet found that over the course of 2018, twice as many women as men need a wide shoe; that 40 percent of both men and women have high arches; and that nearly one in five customers scanned have at least a half size difference between their right and left foot lengths. This information has led to changes in purchases, with the brand seeing increases in the sale of insoles and wider shoes across the system since June 2017.

11.  According to Victor Ornelas, director of brand management for Fleet Feet and project lead for fit id implementation, “It’s one thing to be told you have a wide foot; it’s another thing to have a 3D scan of your foot, along with data identifying how much wider your foot shape is compared to the rest of the population, showing you have a wide foot. In the case of fit id, ‘seeing is believing,’ and our outfitters, now having the data and the visual aid of the scan, can create a great experience for our customers grounded in both technology and service.”

12.  The customer foot scans taken during the fit id experience also fueled the creation of the first running shoe constructed from the data points of over 100,000 customer foot scans. Done in partnership with Karhu, the 100-year-old Finnish running shoe brand, Fleet Feet debuted the Ikoni in August 2018. This fall, Fleet Feet and Karhu will debut two additional running shoe models also shaped by 3D foot scanning data.

13.  Pointer added, “We ask ourselves one question when it comes to incorporating technology, and that is ‘Will it make the customer experience better?’ From our 3D scanning technology to the recent introduction of our app, Fleet Feet is using technology in a way that amplifies our strengths to provide best-in-class support for our customers. Now working with Superfeet and Volumental, we will soon incorporate digital gait analysis. This will output additional measurements beyond 3D shape alone, like heel rotation and knee pressure patterns, paving the way for even more personalized product solutions and advice. It’s an exciting time for Fleet Feet and for our customers.”

Launches National Partnership with SoleMates by Girls on the Run

14.  In mid-July 2019, Fleet Feet announced that it had signed on as the official retail and sporting goods partner of SoleMates, a Girls on the Run® (GOTR) program that empowers adults to achieve fitness and running-related goals while raising money, support, and awareness for Girls on the Run. As a national partner of SoleMates, Fleet Feet locations across the country will work individually with local GOTR councils to support current SoleMates and encourage new ones through personalized gear outfitting, training programs, special products, and in-store events.

15.  Joey Pointer, CEO and president of Fleet Feet, said, “In understanding the resources Girls on the Run needed for its SoleMates program, we knew we could form a meaningful partnership that would help inspire, empower, and support SoleMates and Girls on the Run councils across the country in a very personalized, high-impact way. We celebrate today’s launch while looking forward to the road ahead, where I know the combined efforts of Fleet Feet and Girls on the Run will help change lives for the better through running.”

16.  Theresa Miller, chief engagement officer of Girls on the Run, added, “Fundraising is critical for us in supporting more girls and more councils. Fleet Feet’s commitment to the running community and their ability to use the sport as a way to give back to others will have a huge impact on our efforts. We’re proud and grateful to have both a program in place and a partner in Fleet Feet that allows people to support Girls on the Run while also achieving a personal fitness goal, all while aligning with our mission and company values.”

17.  The SoleMates program began in 2009 and has helped over 14,000 people raise over $8 million for Girls on the Run councils. The partnership announcement with Fleet Feet coincides with a relaunch of the branding and marketing for the SoleMates program, and includes refreshed assets, positioning, and an updated website.

18.  Local Fleet Feet owners and stores will drive awareness of the program as well as leverage staff expertise, training programs, and head-to-toe product solutions for SoleMates to complement the existing resources in place at local GOTR councils. SoleMates will have exclusive opportunities for running engagement and rewards through Fleet Feet’s new app, as well as the opportunity for 3D foot scans, data-driven insights, and expert one-on-one advice from Fleet Feet’s professional outfitters.

Company History

19.  Fleet Feet was founded in 1976 by Sally Edwards and Elizabeth Jansen in Sacramento, California. Prior to starting Fleet Feet, Edwards and Jansen were teachers, but they saw an opportunity to open a running shoe store during the height of the sport. At the time, there were very few running shoe stores and all of them were owned by men. Although they had no business experience, Edwards and Jansen were athletic and into shoes and took a chance on their idea. Edwards and Jansen’s gamble paid off and that first Fleet Feet store was a success.

20.  Not long after opening the first store, Edwards and Jansen decided to open a second Fleet Feet in Chico, California. Instead of opening a third company store, Edwards and Jansen decided to start franchising in 1978. The friends and business partners didn’t just sell franchises to anyone though, they made sure to only sell to people who loved running and their communities. The first franchises were opened around California and the company grew steadily over the next few decades.

21.  In 1993, Edwards and Jansen sold Fleet Feet to Tom Raynor, who then moved the company’s headquarters to Carrboro, North Carolina, where it remains today. Over the years, Fleet Feet has evolved to keep up with the changing retail landscape. In 2003, Fleet Feet developed a proprietary fit process to better help customers find the shoes they needed. From there, brand partnerships evolved with New Balance, then Superfeet, then Balega and, soon after, many more (brand partnerships are a still-evolving program today). Today, there are Fleet Feet stores across the country.

Entrepreneur’s Franchise 500

22.  Fleet Feet ranked No. 104 on Entrepreneur’s 2019 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of Fleet Feet 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 Fleet Feet’s 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:  127
• Outlets at the End of the Year:  131
• Net Change:  +4

2017

• Outlets at the Start of the Year:  131
• Outlets at the End of the Year:  142
• Net Change:  +11

2018

• Outlets at the Start of the Year:  142
• Outlets at the End of the Year:  143
• Net Change:  +1

Company-Owned

2016

• Outlets at the Start of the Year:  31
• Outlets at the End of the Year:  36
• Net Change:  +5

2017

• Outlets at the Start of the Year:  36
• Outlets at the End of the Year:  31
• Net Change:  -5

2018

• Outlets at the Start of the Year:  31
• Outlets at the End of the Year:  32
• Net Change:  +1

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

Part 1 – Statement of Average Annual Sales of Franchised and Affiliate-Owned Stores

• The following table provides the annual average, median, high, and low Gross Sales for the periods ending December 31, 2017 and December 31, 2018 for all franchised and affiliate-owned locations in operation for at least 24 months.

• Additionally, the Gross Sales numbers are shown for 2017 and 2018 by franchisee-owned and affiliate-owned subcategories.

• The table also lists the number of stores included in the average Gross Sales figure as well as the 25th, 50th, and 75th percentiles.

• A percentile is a value on a scale that indicates the percent of a distribution that is equal to it or below it. For example, a Gross Sales at the 50th percentile is equal to or better than 50 percent of all Gross Sales amounts during the sample time period.

• “Gross Sales” reflects the total average annual sales for the stores included in the sample and Fleet Feet does not include sales tax or revenue from online sales through its affiliate’s, FFS Digital LLC, revenue sharing program.

• “Number of Stores Operating During Sample Time Period” means the range of the number of franchised and affiliate-owned locations in operation during the sample period.

• Variations among franchisees may be caused by a variety of factors such as location, demographics, general economic conditions, weather conditions, inventory mix, competition, and other seasonal factors as well as the efforts of the individual franchisees and their staffs.

2018

Franchise-Owned and Affiliate-Owned