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 2021 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 2021 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 2018, 2019, and 2020, based on Item 20 of the company’s 2021 FDD
- Section V – Presentation and analysis of Ben’s Soft Pretzels financial performance representations, based on Item 19 of the company’s 2021 FDD, including information on the:
- 2020 actual and average gross sales for the 8 single-store operators, 6 single-store operators with mobile/venue, 4 multi-store operators, 9 multi-store operators with mobile/venue, and 5 mobile/venue only operators of franchised Ben’s Soft Pretzels stores that were open and operated at least one year as of the end of 2020
- 2020 actual and average gross sales for the 7 company-owned Ben’s Soft Pretzels stores that were open and operated for at least one year as of the end of 2020
Section I – Background Information
15 Things You Need to Know About the Ben’s Soft Pretzels Franchise
Continues National Expansion
1. In mid-June 2020, Ben’s Soft Pretzels announced that it was continuing its growth across the United States. The company, which had more than 100 locations nationwide at the time of the announcement, expanded into its eleventh state with a new location in Arkansas. Financial details of the expansion were not disclosed.
2. The company said it has partnered with Illinois-based Road Ranger USA to open the new pretzel bakery inside the newly-opened Travel Center in Brinkley, Arkansas. The company also said that two new locations at Indianapolis International Airport were in the works.
3. Scott Jones, CEO of Ben’s Soft Pretzels, said, “People deserve excellent food that’s handcrafted right in front of them, especially when they travel, as is the case with Ben’s Soft Pretzels. By partnering with Road Ranger Travel Centers, we get to share our famous pretzels with hungry Road Ranger travelers no matter where their travels may take them.”
4. A year later, in June 2021, Ben’s Soft Pretzels has continued its expansion, despite the ongoing COVID-19 pandemic. The company said it was planning to open four new locations, including at the Eastland Mall in Evansville, Indiana, the company’s home state. The company is also opening locations in the Four Seasons Town Centre Mall in Greensboro, North Carolina, and Typhoon Texas in Katy and Pflugerville, Texas. At the time of this announcement, Ben’s Soft Pretzels said it had 132 locations open in 12 states.
5. Brian Krider, co-founder of Ben’s Soft Pretzels, said, “We are beyond excited about opening these 4 new locations. There is great demand for fresh-baked snacks and meals that are served safely and quickly without compromising food quality.”
6. The company said that it will be opening several more locations this year in traditional locations like malls and other retail outlets and also some non-traditional locations. Ben’s has also recently introduced multiple mobile trailers and food truck pretzel bakeries and said there are more to come.
Celebrates National Pretzel Month by Raising Money for Veterans
7. In October 2020, in celebration of National Pretzel Month, Ben’s Soft Pretzels announced that it was giving away free pretzels – one per customer – with a minimum $1 donation to the Intrepid Fallen Heroes Fund (IFHF) on Free Pretzel Day. All donations from Free Pretzel Day go toward building new Intrepid Spirit centers for military personnel who suffer from traumatic brain injury or psychological health conditions. Ben’s Soft Pretzels has raised more than $150,000 for the IFHF in the past six years.
8. With the minimum $1 donation, visitors received a Jumbo Soft Pretzel to celebrate National Pretzel Day and support those who have served their country. In continued support of U.S. service members, Ben’s Soft Pretzels also gives away free pretzels on Veteran’s Day to current and retired military members to show its support for the men and women who fearlessly defend our country.
9. In addition to Free Pretzel Day, the soft pretzel franchise also celebrated National Pretzel Month by giving away a free pretzel if you purchased a DIY Pretzel Baking Kit at one of their participating bakeries. Two new limited-time flavors, Pepperoni Bites and Cinnamon Powdered Sugar, were introduced last fall. Ben’s Soft Pretzels also had a sweepstakes that gave a year’s worth of free pretzels to one customer. A winner was chosen at random from the entries on November 10, 2020.
10. Scott Jones, co-founder and CEO of Ben’s Soft Pretzels, said, “This is our sixth year partnering with the honorable Intrepid Fallen Heroes Fund. We love to celebrate National Pretzel Month but we appreciate it even more by giving back to this country’s heroes in our own small way.”
11. 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. In 2003, Jones met the Millers after getting lost in Amish Country. Jones was directed to their house for help and he struck up what would become a life-long friendship with the Millers.
12. At the time, the Millers were selling their Amish baked goods at a local farmer’s market. 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. Initially, the Millers turned down the offer because they had no experience making and selling soft pretzels. However, the pretzel stand owner was persistent and eventually the Millers relented. Unfortunately, the Millers realized that they had purchased only the equipment and not the pretzel recipe.
13. The Millers were determined to make things work and after a lot of trial and error, they developed a soft pretzel recipe that they felt was perfect. Jones loved the pretzel that the Millers had created and he felt that they could turn it into a full-fledged business. Around this time, Jones introduced his co-worker Brian Krider to the Millers and they also became quick friends.
14. The first Ben’s Soft Pretzels stand was a success and a few years later, in 2013, Jones, the Millers, and Krider began franchising the concept. Within a few years, Ben’s Soft Pretzels had grown to 75 locations across 8 states. Master Lease agreements were struck with Wal-Mart and Meijer. Ben’s Soft Pretzels also has partnerships with many universities around the Midwest.
Entrepreneur’s Franchise 500
15. Ben’s Soft Pretzels did not rank on Entrepreneur’s 2021 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 2021 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 2021 FDD.
Section IV – Number of Franchised and Company-Owned Outlets
- Outlets at the Start of the Year: 64
- Outlets at the End of the Year: 60
- Net Change: -4
- Outlets at the Start of the Year: 60
- Outlets at the End of the Year: 63
- Net Change: +3
- Outlets at the Start of the Year: 63
- Outlets at the End of the Year: 62
- Net Change: -1
- Outlets at the Start of the Year: 18
- Outlets at the End of the Year: 17
- Net Change: -1
- Outlets at the Start of the Year: 17
- Outlets at the End of the Year: 9
- Net Change: -8
- Outlets at the Start of the Year: 9
- Outlets at the End of the Year: 8
- Net Change: -1
Section V – Financial Performance Representations (Item 19, 2021 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 2020 (the “2020 Operating Stores”). Ben’s Soft Pretzels has included the Gross Sales for the period January 1, 2020 to December 31, 2020 (the “2020 Measurement Period”).
- The Operating Stores are separated for Franchisee-Owned Operating Stores and Company-Owned Operating Stores. For the Franchisee-Owned Operating Stores, Ben’s Soft Pretzels obtained these sales figures from information provided to it by its franchisees for the periods noted.
- 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 7 new stores that opened during 2020 but were not open for the entire 2020 Measurement Period.
- The Operating Stores do not include the 8 franchised stores and 1 corporate store that closed during 2020, although none of those 9 opened and closed during the 12-month period.
- If a store transferred as between two franchisees in 2020, 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 2020 Measurement Period for the Franchisee-Owned Operating Stores is provided in the following table: