In this FDD Talk 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 2019 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 2019 FDD
- Section IV – Number of franchised and company-owned Pretzelmaker 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 Pretzelmaker’s financial performance representations, based on Item 19 of the company’s 2019 FDD, including information on the:
- 2018 average and median net sales and average same-store sales growth for the 107 franchised Traditional Stores that had been continuously in operation for the entire calendar year of 2018 and that were not co-branded with another concept or supplemented with a Satellite
- 2018 average and median cost of goods sold, labor costs, and rent for the 15 franchised Traditional Stores that had been continuously in operation for the entire calendar year of 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
- 2018 average and median net sales and average 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
12 Things You Need to Know About the Pretzelmaker Franchise
Celebrates National Pretzel Day with Free Pretzels and Launch of New Catering Offerings
1. In mid-April 2019, Pretzelmaker announced that it planned to celebrate National Pretzel Day (April 26) by offering its Rewards App members a free original soft pretzel (salted or unsalted). Customers needed to already be a member to redeem the offer. Additionally, the brand said that it would be surprising lucky members with the gift of a pretzel party featuring Pretzelmaker’s new catering offerings. Twenty-five lucky rewards users received a free Pretzel Bites tray, a 16-ounce container of sauce of their choice, and a half gallon of fresh-made lemonade.
2. Pretzelmaker created its new catering program to encourage guests to bring their favorite pretzel products to parties, gatherings, office events, and all of the occasions in life worth celebrating. The catering menu features piping hot trays of Pretzel Bites in a variety of flavors, Mini Pretzel Dogs, Stuffed Pretzel Bites (Mozzarella and Bacon & Mozzarella), pretzels by the dozen available in assorted flavors, sauces, and all-natural lemonade by the half gallon. The menu can be found on Pretzelmaker’s website.
3. Steve Thomas, executive vice president of Pretzelmaker, said, “National Pretzel Day is worthy of a party and with our annual free pretzel giveaway plus the launch of our new catering menu, we’re helping people celebrate with the most delicious pretzels in the nation. This year we have a new twist on the day with the inclusion of our new and improved Pretzelmaker Rewards App. It’s now easier than ever to earn rewards for free pretzel items and we are looking forward to welcoming pretzel lovers to our stores on April 26 and celebrating with them throughout the year – everyone needs a little pretzel in their party!”
Adds New Bacon & Mozzarella Stuffed Bites to Permanent Menu
4. In mid-September 2018, Pretzelmaker invited customers to celebrate the launch of its new Bacon & Mozzarella Stuffed Bites at its Bacon for Bacons event, offering free Bites for anyone with the last name “Bacon” on Saturday, September 22, 2018. The fun continued with a Bring Home the Bacon Sweepstakes in which one lucky winner received $1,000 cash and Bacon & Mozzarella Stuffed Bites for a year.
5. The “Bacon for Bacons” giveaway took place on Saturday, September 22 and anyone who presented a valid ID with the last name “Bacon” received a free 8-piece Bacon & Mozzarella Stuffed Bites Combo. The Bring Home the Bacon Sweepstakes started on September 13 and ran through October 12.
6. An extension of Pretzelmaker’s popular Mozzarella Stuffed Bites, the new Bacon & Mozzarella Stuffed Bites are made with crispy bacon and melty 100% Wisconsin mozzarella cheese. The new bites are available in 8-piece ($5.50) and 16-piece ($8.95) counts (suggested retail price), and also as a combo, with the sauce of choice and a regular drink.
7. Initially, the Bacon & Mozzarella Stuffed Bites were a limited-time menu available until December 31, 2018. However the bites were added to Pretzelmaker’s permanent menu in 2019.
8. Lisa Cheatham, director of marketing for Pretzelmaker, said, “If you’re a bacon fan (and who isn’t?), now is the time to visit Pretzelmaker and try our new Bacon & Mozzarella Stuffed Bites. The addition of Bacon to our already delicious Mozzarella Stuffed Bites is what snack dreams are made of, and our ‘Bring Home the Bacon’ campaign celebrates not only our delicious new bites, but lucky people with the last name Bacon.”
Company History
9. Pretzelmaker was founded as Pretzelvania in 1991 by Jeffery Tripp. However, Tripp quickly changed the company’s name to Pretzelmaker when he began franchising the concept the following year. Within a few short years, Pretzelmaker had sold over 100 franchises and by 1995, 40 stores were already in operation.
10. That same year, Pretzelmaker was acquired by Don Cox, Marc Geman, Tony Joseph, and Dale Fowler with a small group of other investors. Under the new ownership, Pretzelmaker jumped from a few dozen stores to 288 locations.
11. Despite Pretzelmaker’s success, the new owners decided to sell the company in 1999 to Mrs. Fields Famous Brands. Over the next few years, Pretzelmaker continued to grow and the company was sold once again to NexCen in 2007 for $29.7 million. Global Franchise Group (GFG) purchased NexCen Franchise Management in 2010, and merged Pretzel Time and Pretzelmaker into one brand as Pretzelmaker. The brand is still owned by Global Franchise Group and there are locations across 40 states, Canada, Guam, Mexico, the Philippines, Saudi Arabia, and Qatar.
Entrepreneur’s Franchise 500
12. Pretzelmaker did not rank on Entrepreneur’s 2019 Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of Pretzelmaker 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 Pretzelmaker’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: 222
- Outlets at the End of the Year: 217
- Net Change: -5
2017
- Outlets at the Start of the Year: 217
- Outlets at the End of the Year: 205
- Net Change: -12
2018
- Outlets at the Start of the Year: 205
- Outlets at the End of the Year: 192
- Net Change: -13
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
- In the chart below, Pretzelmaker discloses the average and median Net Sales generated over the 2018 calendar year (the “Measurement Period”) for the 107 Traditional Stores that (a) continuously operated over the entire Measurement Period, and (b) are not co-branded with another concept or supplemented with a Satellite.
- In addition to this Net Sales data, the table below discloses the average and median of certain costs incurred over the Measurement Period by the 15 Traditional Stores that: (i) met the conditions discussed in subparts (a) and (b) of the prior paragraph; and (ii) reported their respective cost information to Pretzelmaker in time for such information to be included in this Item.
- There were 192 franchised Stores open and operating as of December 31, 2018. Of these, 107 were Traditional Stores that operated for all of 2018, 23 were Non-Traditional Stores, 58 were Co-Branded Stores, and 4 Stores were not open for the entire 2018 calendar year.
Overall Sample
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