FDD Talk 2020: Ben’s Soft Pretzels Franchise Review (Financial Performance Analysis, Costs, Fees, and More)

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

• Section I – Background information on the Ben’s Soft Pretzels franchise opportunity, including relevant news updates

• Section II – Estimated initial investment for a Ben’s Soft Pretzels franchise, based on Item 7 of the company’s 2020 FDD

• Section III – Initial franchise fee, royalty fee, marketing fee, and other fees for a Ben’s Soft Pretzels franchise, based on Items 5 and 6 of the company’s 2020 FDD

• Section IV – Number of franchised and company-owned Ben’s Soft Pretzels outlets at the start of the year and the end of the year for 2017, 2018, and 2019, based on Item 20 of the company’s 2020 FDD

• Section V – Presentation and analysis of Ben’s Soft Pretzels’ financial performance representations, based on Item 19 of the company’s 2020 FDD, including information on the:

• 2019 actual and average gross sales for the 60 franchised Ben’s Soft Pretzels stores that were open and operated for at least one year as of the end of 2019, by venue type (mall, stand alone, Walmart, Meijer, venue, mobile)

• 2019 actual and average gross sales for the 9 company-owned Ben’s Soft Pretzels stores that were open and operated for at least one year as of the end of 2019, by venue type (mall, Walmart, Meijer, venue, mobile)

Section I – Background Information

19 Things You Need to Know About the Ben’s Soft Pretzels Franchise

Launches Pretzel Partner Program to Help Frontline Workers

1.  In late April 2020, Ben’s Soft Pretzels and its franchise partners teamed up with their communities to provide more than 6,000 free pretzels to the men and women battling on the frontlines, as well as to hungry kids. The Pretzel Partnership Program allowed members of the community to sponsor pretzel delivery to frontline workers of their choice.

2.  For a $30 sponsorship, Ben’s Soft Pretzels delivered 20 pretzels and 20 dipping sauces to a frontline organization. From hospitals, first responders, and delivery professionals, Ben’s has and will continue to deliver.

3.  Brian Krider, co-founder of Ben’s Soft Pretzels, said, “We are so grateful to the men and women who run in when we are running out. We are also very thankful to the communities that have become sponsors through our Pretzel Partners Program. Without them, we would not be able to financially put this many smiles on people’s faces. Some of the darkest times in our lives shed the brightest light on the greatness of the human spirit.”

4.  In addition to the Pretzel Partnership Program, several Ben’s Soft Pretzels bakeries elected to feed hungry kids by providing free pretzels to children 18 and under to help combat hunger in light of school meal programs being reduced or eliminated.

5.  Krider added, “We are not finished. We have thousands of more smiles to see. Our pretzels are not like anything else in the world. People just smile when they see a nearly ½ pound pretzel heading their way. We like it that way.”

Releases DIY Pretzel Kits at All Gordon Food Service Stores

6.  At the beginning of June 2020, Ben’s Soft Pretzels announced the expansion of its World Pretzel Domination plan with a partnership with Gordon Food Service Stores. All 176 Gordon Food Service Stores will be selling Ben’s Soft Pretzels DIY Pretzel Baking Kits. The pretzel kits are manufactured in Northern Indiana and are currently shipped all over the world.

7.  Each pretzel kit includes Ben’s secret recipe mix, imported German pretzel salt, cinnamon and sugar mix, baking soda, yeast, and easy-to-follow directions. Ben’s Soft Pretzels DIY Pretzel Baking Kits make it possible for fans to make their own fresh Ben’s Soft Pretzels at home with family and friends.

8.  According to Brian Krider, co-founder of Ben’s Soft Pretzels, “The only items left to add are butter and a whole lot of love. This is a great product to make with family and friends. These are the same legendary pretzels you know and love from our fresh bakeries, stadiums, and arenas throughout the US.”

Opens First Theme Park Location

9.  In mid-June 2020, Ben’s Soft Pretzels expanded its business model by partnering with theme parks. A new pretzel location at the Holiday World and Splashin’ Safari in Santa Claus, Indiana is the pretzel company’s first location inside a theme park and came to fruition as a result of the company’s membership in the World Waterpark Association and The International Association of Amusement Parks and Attractions.

10.  Pretzel fans at Holiday World can enjoy a legendary, nearly half-pound, Jumbo Soft Pretzel with imported German salt along with a variety of sweet and savory hand-dipped sauces.

11.  When considering who would be the ideal candidate to operate this new location, Ben’s Soft Pretzels chose Ron Williams, a multi-unit franchisee and previous “Franchisee of the Year” to lead the charge. Williams operates three traditional locations in Indiana and Kentucky, in addition to two stadium venues, as well as a mobile food trailer.

12.  Williams said, “I am honored and excited that we are able to be a part of the Holiday World experience. Our team at Ben’s would like to thank park management for allowing us to serve park guests hot, fresh, buttery Ben’s Soft Pretzel inside the park. We are looking forward to being a part of the Holiday World team.”

13.  Brian Krider, co-founder of Ben’s Soft Pretzels, added, “The Ben’s Soft Pretzels Family could not be more excited to serve pretzels at one of the most legendary parks in the world. Holiday World and Splashin’ Safari is a perfect fit for our world famous soft pretzels. Two of the most exciting Indiana brands coming together to offer the best visitor experience. If I was a kid today and knew I could get a Ben’s Soft Pretzel right after riding the Thunderbird, I would never go home!”

Launches Pretzel Prizza

14.  In late October 2019, Ben’s Soft Pretzels launched its new Pretzel Prizza. According to Ben’s, Pretzel Dough + Italian Toppings = Prizza. The new creation uses Ben’s Soft Pretzels dough, marinara sauce, mozzarella cheese, and customer’s choice of pepperoni, bacon, or meatballs. The Prizza is now available at participating Ben’s Soft Pretzels locations.

Company History

15.  Ben’s Soft Pretzels was founded in 2008 by Scott Jones, Ben and Liz Miller, and Brian Krider in the Concord Mall in Elkhart, Indiana. The Millers, who lived on an Amish Homestead, baked and sold delicious treats throughout Northern Indiana and Southern Michigan. Next door to one of the Millers’ booths was a small pretzel company. The owner of the pretzel company asked the Millers if they were interested in purchasing the company.

16.  Although the Millers had no experience baking pretzels, they eventually decided to purchase the company. However, the Millers realized that they were only purchasing the equipment and not the previous owner’s pretzel recipe. After extensive trial and error, the Millers came up with what they felt was the perfect pretzel recipe.

17. In 2003, Jones met the Millers and fell in love with their pretzels. He knew that they had to share it with the world. Around this time, Jones introduced the Millers to his co-worker Brian Krider, who would join in on their pretzel business venture.

18.  After opening in 2008, Jones, the Millers, and Krider started franchising Ben’s Soft Pretzels in 2013. By 2018, the chain had grown to 75 locations and master lease agreements were struck with Walmart and Meijer. Additionally, Ben’s Soft Pretzels has partnerships with athletic teams such as the University of Notre Dame, Auburn University, Purdue, Wisconsin, Indiana University, University of Wisconsin, Indiana Pacers, South Bend Cubs, and many more.

Entrepreneur’s Franchise 500

19.  Ben’s Soft Pretzels did not rank on Entrepreneur’s 2020 Franchise 500 list.

Section II – Estimated Costs

• Please click here for detailed estimates of Ben’s Soft Pretzels franchise costs, based on Item 7 of the company’s 2020 FDD.

Section III – Initial Franchise Fee, Royalty Fee, Marketing Fee, and Other Fees

• Please click here for detailed information on Ben’s Soft Pretzels’ initial franchise fee, royalty fee, marketing fee, and other fees, based on Items 5 and 6 of the company’s 2020 FDD.

Section IV – Number of Franchised and Company-Owned Outlets

Franchised

2017

• Outlets at the Start of the Year:  60
• Outlets at the End of the Year:  64
• Net Change:  +4

2018

• Outlets at the Start of the Year:  64
• Outlets at the End of the Year:  60
• Net Change:  -4

2019

• Outlets at the Start of the Year:  60
• Outlets at the End of the Year:  63
• Net Change:  +3

Company-Owned

2017

• Outlets at the Start of the Year:  20
• Outlets at the End of the Year:  18
• Net Change:  -2

2018

• Outlets at the Start of the Year:  18
• Outlets at the End of the Year:  17
• Net Change:  -1

2019

• Outlets at the Start of the Year:  17
• Outlets at the End of the Year:  9
• Net Change:  -8

Section V – Financial Performance Representations (Item 19, 2020 FDD) and Analysis

• This financial performance representation discloses historical information regarding the actual annual Gross Sales (defined below) for the stores that were open and operated at least one year as of the end of 2019 (the “Operating Stores”). Ben’s Soft Pretzels has included the 2019 Gross Sales for the period January 1, 2019 to December 31, 2019 (the “Measurement Period”).

• The Operating Stores are separated for Franchisee-Owned Operating Stores and Company-Owned Operating Stores.

• The Operating Stores do not include the 2 franchises which are for baseball parks and only sell pretzels when a game is played at the park, and the 6 stores that opened during 2019 but were not open for the entire Measurement Period.

• Ben’s Soft Pretzels also has not included the 5 franchised stores and 5 corporate/affiliate stores that closed during 2019, although none of those opened and closed during the 12-month period.

• If a store transferred as between two franchisees in 2019, the results are included for that store.

• The term “Gross Sales” means all sales or revenues derived directly or indirectly from the business, including on-premises sales and monies derived at or away from the business, whether from cash, check, credit and debit card, trade credit or credit transactions, including without limitation business interruption insurance proceeds and service charges in lieu of gratuity, but excluding (i) sales taxes collected from customers and paid to the appropriate taxing authority and (ii) the amount of all coupons redeemed.

• “Franchisee-Owned Operating Store” means a store operated under a franchise agreement that is not a Company-Owned Store.

• “Company-Owned Operating Store” means a store owned by Ben’s Soft Pretzels or any of its affiliates who are related to it by common ownership.

• “Stand Alone” store as used in the table below means a store operated at a street front or similar location rather than a location within a mall or a Walmart or Meijer store.

• References in the table to Walmart or Meijer means that the store is located in a Walmart or Meijer store.

• For a multiple store operator, Ben’s Soft Pretzels has included the Gross Sales for each store.

Part 1 – Franchisee-Owned Operating Stores

• The historical Gross Sales for the Measurement Period for the Franchisee-Owned Operating Stores is provided in the following table:

Single Store Operators