In this FDD Talk post, you’ll learn the following:
- Section I – Background information on the Pandora franchise opportunity, including relevant news updates
- Section II – Estimated initial investment for a Pandora 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 Pandora franchise, based on Items 5 and 6 of the company’s 2020 FDD
- Section IV – Number of franchised and company-owned Pandora 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 Pandora’s financial performance representations, based on Item 19 of the company’s 2020 FDD, including information on the:
- 2019 average, median, high, and low gross sales for the 233 franchised Pandora Stores located in the United States, which were continuously open and operating from January 1, 2019 through December 31, 2019
- 2019 range of gross sales by quartile for the 233 franchised Pandora Stores located in the United States, which were continuously open and operating from January 1, 2019 through December 31, 2019
Section I – Background Information
26 Things You Need to Know About the Pandora Franchise
Joins Forces with UNICEF to Raise Over $1 Million in Aid of New ‘One Love’ Initiative
1. In early July 2020, model and activist Halima Aden came together with Pandora in support of UNICEF’s One Love initiative, to reimagine a world fit for all children. With the goal of preventing the COVID-19 pandemic from becoming a lasting crisis for the world’s most vulnerable children, Pandora will match every dollar donated through One Love up to the value of US$1 million.
2. Members of the Marley family re-recorded the late Bob Marley’s iconic anthem One Love in support of UNICEF. Tuff Gong International and Amplified Music released a new version of the seminal song on July 17 with all proceeds from the song and related activities directly supporting UNICEF’s Reimagine campaign.
3. Originally recorded in 1977 by Bob Marley and the Wailers, One Love/People Get Ready is an iconic song for millions across the globe with its everlasting message to come together as one. The reimagined version of the song was a true global anthem for 2020 featuring members of the Marley family, established musicians from all corners of the globe, and artists from conflict zones around the world.
4. Cedella Marley said, “Over forty years ago, my father wrote One Love about unity, peace and universal love during a time when there was much trouble in the world. Even in a time when we aren’t able to get together, his message remains true today, we can get through this global crisis if we come together through one love and one heart.”
5. As an advocate for global change, model and activist Halima Aden raised her voice for the One Love initiative, encouraging the public to support and engage with donating functions across social media. With the first US$1 million donated by supporters across the world doubled by Pandora, the proceeds will help UNICEF provide necessary equipment and essential support to vulnerable children and young people.
6. Aden said, “As a Pandora Muse, I am so excited that Pandora supports the efforts of an organization that is so personal to me, UNICEF. As a UNICEF Ambassador, who was once on the receiving end of the services they provide to children around the world whilst growing up in a refugee camp, I know how detrimental the impact of COVID-19 will be if it hits refugee camps. The loss will be unbearable. In camps, there is no such thing as social distancing. UNICEF needs our help today more than ever and I’m so grateful to my Pandora family, as well as the Marley family, for coming together for this important initiative.”
7. Stephen Fairchild, chief product officer of Pandora, added, “Across the world, we need to stand together in these difficult times, not forgetting those who need it most. By coming together with Halima Aden and the Marley family in support of UNICEF, we can contribute together towards ensuring that the post-pandemic world is fairer and more equal for every child.”
8. Throughout the month of July, Pandora and UNICEF drove awareness by engaging with Pandora fans and influencers, raising funds in support of the One Love initiative. This included a “swipe-up” donation matching function, an AR Instagram filter where each interaction resulted in a UNICEF donation, and matching of all funds raised through activations on TikTok supporting the song launch.
9. Pandora’s partnership with UNICEF was a global call to action in response to a UNICEF estimate that, without urgent action, COVID-19 could cause an additional 6,000 children to die from preventable causes every day over the next six months. The collaboration on One Love is an extension of Pandora’s ongoing partnership with UNICEF that aims to support young voices around the world.
Announces All Jewelry Will Be Made from Recycled Silver and Gold
10. In early June 2020, Pandora announced that it will entirely stop using newly-mined silver and gold in its jewelry by 2025 and only buy from recycled sources. This will cut carbon emissions by two-thirds for silver and by more than 99% for gold.
11. “Silver and gold are beautiful jewelry materials that can be recycled forever without losing their quality. Metals mined centuries ago are just as good as new. They will never tarnish or decay. We wish to help develop a more responsible way of crafting affordable luxury like our jewelry, and prevent that these fine metals end up in landfills. We want to do our part to build a more circular economy,” said CEO Alexander Lacik.
12. Today, 71% of the silver and gold in Pandora’s jewelry comes from recycled sources. Shifting completely to recycled silver and gold will reduce CO2 emissions, water usage, and other environmental impacts, because recycling of metals uses less resources than mining new metals. The carbon emissions from sourcing of recycled silver are one-third compared to mined silver, while recycling of gold emits approximately 600 times less carbon than mining new gold, according to life cycle assessments.
13. Lacik added, “The need for sustainable business practices is only becoming more important, and companies must do their part in response to the climate crisis and the depletion of natural resources. For many years, Pandora has used recycled metals in our designs. Now we are ready to take the next step and stop using mined silver and gold altogether. This is a significant commitment that will be better for the environment and make our jewelry more sustainable.”
14. Silver is the most used material in Pandora jewelry, accounting for over half of all purchased product materials measured by weight. Pandora also uses smaller volumes of gold, palladium, copper, and man-made stones such as nano-crystals and cubic zirconia. The decision to use only recycled silver and gold covers all use of these metals in Pandora’s jewelry, including grains, semi-finished items such as chains, and other parts from suppliers.
15. Today, around 15% of the world’s silver supply comes from recycled sources. More than half of the recycled silver comes from industry, where the metal is used in chemical production, electronics, and for other purposes. Pandora will work with its suppliers to guarantee sufficient supply of responsibly sourced recycled silver, certified according to leading supply chain initiative standards such as the Responsible Jewelry Council. Pandora will also engage with key stakeholders in the supply chain to explore opportunities for increasing the availability of recycled silver and improve production standards.
16. The decision to use recycled precious metals follows Pandora’s ambitious decarbonisation targets announced in January. In 2020, Pandora will source 100% renewable electricity at its two jewelry crafting facilities in Thailand, and by 2025 the company will be carbon neutral across its entire operations. Pandora has also joined the Science Based Targets initiative – the leading corporate collaboration for action on climate change – and will publish a plan in 2021 to reduce carbon emissions in its full value chain in line with the Paris Agreement.
Appoints New Chief Supply Officer
17. At the end of June 2020, Pandora announced that Jeerasage Puranasamriddhi, senior vice president of manufacturing overseeing Pandora’s operations in Thailand at the time, had been appointed chief supply officer reporting to CEO Alexander Lacik and serving on Pandora’s executive leadership team. The appointment follows the passing in April 2020 of Thomas Touborg, Pandora’s previous CSO.
18. Jeerasage Puranasamriddhi joined Pandora in April 2020 after 12 years in charge of jewelry manufacturing in Thailand and Vietnam at Marigot, a subsidiary of Swarovski. He has also led supply chain and manufacturing operations for various multi-national companies in the watch industry across Switzerland, USA, Hong Kong SAR, China, and Thailand.
19. As part of the announcement, responsibility for supply and distribution will move from group operations to the commercial operations under CCO Martino Pessina to drive a strong connection between supply, distribution, and consumer demand. To further simplify the organization, Jeerasage Puranasamriddhi’s position as senior vice president of manufacturing will not be replaced. The changes support Pandora’s new operating model announced on March 4, 2020.
20. CEO Alexander Lacik said, “I would like to congratulate Jeerasage and welcome him to the Executive Leadership Team. Jeerasage holds a very strong track-record in managing jewelry manufacturing, and he will build on Thomas Touborg’s legacy. With supply and distribution moving closer to the demand side of the business, we strengthen collaboration across our value chain in support of growth. Our focus will be to work with close connections from product and crafting to marketing and retail, creating an organization that can act quickly to changing consumer demands.”
21. Pandora was founded in 1982 by Danish goldsmith Per Enevoldsen and his wife Winnie in Copenhagen, Denmark. The Enevoldsens often traveled to Thailand to look for pieces that they could import and sell back in Denmark. Eventually, demand for their products increased and the Enevoldsens shifted to being a wholesaler to clients back home.
22. Around 1987, the Enevoldsens transformed their business again and hired an in-house designer for the first time. Pandora began to design and sell its own unique pieces. Two years later, in 1989, the Enevoldsens began manufacturing their jewelry in Thailand.
23. Over the next few decades, Pandora grew around Denmark and the brand continued to make new pieces of jewelry. In 2000, Pandora launched its now-iconic charm bracelet in Denmark and consumers quickly took to the concept. Demand for the charm bracelets grew and Pandora began to expand internationally, entering new markets such as the United States in 2003 and Germany and Australia in 2004. After testing these concept stores around the world, Pandora began franchising in 2009, starting with franchised locations in Australia.
24. In order to increase its production capacity, Pandora opened a large scale, six story, fully-owned manufacturing facility in Thailand in 2005, which still forms a central part of the current production and infrastructure. Additionally, manufacturing facilities have been opened in the last decade to keep up with international demand.
25. Today, Pandora sells its products in more than 100 countries on six continents with more than 7,000 points of sale. Pandora is now one of the largest jewelry companies in the world in terms of sales.
Entrepreneur’s Franchise 500
26. Pandora did not rank on Entrepreneur’s 2021 Franchise 500 list.
Section II – Estimated Costs
- Please click here for detailed estimates of Pandora 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 Pandora’s 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
- Outlets at the Start of the Year: 301
- Outlets at the End of the Year: 268
- Net Change: -33
- Outlets at the Start of the Year: 268
- Outlets at the End of the Year: 244
- Net Change: -24
- Outlets at the Start of the Year: 244
- Outlets at the End of the Year: 240
- Net Change: -4
- Outlets at the Start of the Year: 46
- Outlets at the End of the Year: 113
- Net Change: +67
- Outlets at the Start of the Year: 113
- Outlets at the End of the Year: 154
- Net Change: +41
- Outlets at the Start of the Year: 154
- Outlets at the End of the Year: 156
- Net Change: +2
Section V – Financial Performance Representations (Item 19, 2020 FDD) and Analysis
Part 1 – Statement of Actual, Average, and Median Gross Sales for Pandora Stores
A. Actual and Average Gross Sales
- Below is a statement of actual and average Gross Sales compiled from 233 franchised Pandora Stores located in the United States (including the District of Columbia but not including Puerto Rico or the United States Virgin Islands) (“Franchised Stores”), which were continuously open and operating from January 1, 2019 through December 31, 2019 (“Accounting Period”) and which reported the results from their operations to Pandora.
- As used in Item 19, the term “Gross Sales” means all revenue and income from any source derived or received by the Franchised Stores from, through, by, or on account of the operation of the Store, whether received in cash, in services, in kind, from barter and/or exchange, on credit (whether or not payment is actually received) or otherwise, less the amount of any documented refunds given in good faith to customers by the franchisee and less any sales taxes.
- Pandora obtained this Gross Sales information from unaudited franchisee reports submitted to it consistent with its reporting requirements. Pandora has not audited or otherwise reviewed the Gross Sales information submitted to it.
- The Franchised Stores included in Item 19 are primarily located within regional shopping centers or malls.