Franchising with Powell`s Sweet Shoppe

Franchising with Powe l l ’ s Swe e t Shop p e
POWELL’S SWEET SHOPPE USA
A LIMITED LIABILITY COMPANY
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WHO WE A RE
Powell’s Sweet Shoppe is an old-time, old-fashioned, old-world candy store taken
from America’s imagination at the turn-of-the-previous-century. Everyone has an
extremely vivid and pleasant memory of where they went as a child to get their
favorite candy - whether it was the corner market or their Grandma’s candy dish. We
are a nostalgic recreation of that classic and bygone era. On the surface we sell ice
cream and sweets, but you don’t have to stand in the Shoppe too long before you
realize that what we really offer are whimsy and memories. “I feel like a kid again!”
and “I haven’t seen that since I was a kid!” are far and away the most common
things we hear. And that is precisely our goal. We want to walk our customers down
memory lane and remind them of good things and good times.
Powell’s Sweet Shoppe opened in late September 2003 in Windsor, California—a
small rural town of about 25,000 located just north of Santa Rosa in the heart of the
Sonoma County wine country. The Shoppe has been an amazing success, serving
almost 100,000 customers during its first year. In our busiest month of 2004, we
served 11,195 customers – or one purchase every two minutes during open store
hours. Powell’s Sweet Shoppe has been featured on the regional TV show, Evening
Magazine, and written about as one the great candy stores of the Western United
States in Sunset Magazine. In 2004, Michael Powell was named “Business Person of
the Year” by the Chamber of Commerce.
Like retail businesses of the past, Powell’s is a local business with very close ties to
its community. The store is located in a “Main Street USA” style development
designed in the style of Victorian America, with shops on the ground level and
condominium residences above. Powell’s faces a 5-acre town green where families
gather on warm summer evenings for movies, concerts, and festivals.
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MER CHANDIS ING
Powell’s offers a very large selection of bulk, gourmet, and novelty candies (all in all,
nearly 3,000). We plan to introduce Powell’s private-label candies in 2005. We also
serve 24 gelato flavors and various old-time non-alcoholic bottled beverages.
Candy-themed gifts complete our selection.
Each Powell’s store is required to carry a core group of candies, which will be ordered
from Powell’s through our central warehousing and distribution operation in Santa
Rosa or from authorized vendors. Centralized warehousing and distribution allows
Powell’s to virtually eliminate middle-men distributors from the process so we can
purchase product direct from manufacturers at significant discounts, saving our
franchisees both time and cost. A typical store will purchase about 80% of its
merchandise direct from Powell’s Sweet Shoppe USA.
In addition to the core products, you will also have the opportunity to include a
selection of local and regional favorites in your store, as long as all merchandise
meets Powell’s quality standards.
A very important factor in the operation of your store is the way products are
displayed, merchandised, and sold. The Powell’s Sweet Shoppe USA corporate team
will work closely with you during the initial training period and give ongoing support
to ensure a complete understanding of this critical area.
In addition to retail in-store sales, you will have the option of participating in Powell’s
mail order, corporate sales, and community fund-raising programs, if and when
these programs are introduced in the future. These types of programs normally have
tremendous potential for increasing store sales and profitability.
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THE P OWELL’S BUSINESS SYSTEM
STANDARD OPERATING PROCEDURES
We have developed an Operating Manual with policies, procedures, checklists, forms,
and other assistance designed to ensure that each Powell’s store operates efficiently
and provides the same great experience to customers. The Table of Contents for the
Operating Manual is included in our Uniform Franchise Offering Circular. However,
the Manual itself is provided at the franchise management training course required of
all new franchisees.
TRAINING AND SUPPORT
We believe that training and continuing support are central to the success of our
franchisees. You and your manager(s) (if applicable) will be required to successfully
complete a comprehensive management-training program at the corporate
headquarters in Windsor, California. The Powell’s Sweet Shoppe management
training program covers the functions that are critical for you to master in order to
operate your store efficiently and according to company standards. The training
program includes a detailed review of the Powell’s Sweet Shoppe Operations Manual,
and of inventory and cost control procedures, merchandising techniques, quality
standards, personnel management, financial management, customer service,
marketing and sales, and emergency response management. The training program
also covers required software and systems.
You will train in the classroom and in our retail store. Training continues with the
opening of your store where our Support Team will assist and guide you in all areas
of operation to ensure a smooth store opening. All training expenses for this period
are covered in the franchise fee. You are responsible, however, for transportation,
lodging, meals, and entertainment while in Windsor.
In addition, we plan to hold a National Franchisee Conference annually, offering
seminars and workshops on subjects relevant to the successful operation of your
store and to bring our franchisee partners together for information sharing and social
activities.
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RECORD KEEPING AND REPORTING
Our software and systems are designed to help you maintain proper control of your
operation. The system generates detailed reports on sales, inventory, accounts
receivable and payable, cash flow, and payroll. With our help, you will be able to run
your operation efficiently and effectively from Day One.
STAFFING
The number of staff in your store will vary depending upon location and season.
A typical Powell’s Sweet Shoppe has two full-time managers (usually the owners),
four part-time supervisors, and four to six part-time associates.
FRANCHIS ING
TYPES OF FRANCHISES AVAILABLE
Single-unit franchises are available to owner/operators or, if approved by Powell’s
Sweet Shoppe USA, to owners who plan to hire a full-time manager to operate their
store. Powell’s Sweet Shoppe USA offers full-store concepts of various sizes (1000 2000 square feet) depending on the retail environment you are interested in.
Future expansion to multiple unit ownership is an option for single-unit franchisees
that are in good standing.
FRANCHISE FEE
The franchise fee is $30,000, which is payable at the time the Franchise Agreement
is signed. The initial term is ten years with an option to renew for an unlimited
number of subsequent ten-year terms, as long as you are in good standing at the
time of renewal. There is no additional franchise fee due upon renewal; however a
renewal fee of $2,500 is required to cover administrative and legal fees incurred by
Powell’s Sweet Shoppe USA.
TOTAL INVESTMENT
The total estimated initial investment required to obtain a Powell’s Sweet Shoppe
franchise and open a retail store is between $256,931 and $422,112 depending upon
store size and location. These figures are based on our historical experience, and
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include the franchise fee, architectural and design fees, leasehold improvements,
furniture, fixtures, displays, equipment, opening inventory, supplies, insurance, lease
deposits, first month’s rent, working capital, and travel and living expenses for the
initial training session in California. More information is provided in the Powell’s
Sweet Shoppe USA Uniform Franchise Offering Circular.
FINANCING
Powell’s Sweet Shoppe USA does not provide financing, but we will assist you in
putting together a financial package and work closely with you and your bank. The
Powell’s Sweet Shoppe Pre-Opening Manual contains information that should help
with the preparation of a business plan for financing.
ROYALTIES
On Friday of each week, franchisees pay 6% (six percent) of their gross revenues as
a royalty. In addition, each store pays 2% (two percent) of gross revenues into
Powell’s National Marketing Fund (Powell’s company-owned stores also pay the 2%
marketing royalty). Funds for marketing and promotion are accounted separately
and are not commingled with other royalties. The marketing fund is used to develop
special promotions, point-of-purchase materials, public relations and advertising
campaigns, our website, and other projects designed to enhance awareness of the
Powell’s Sweet Shoppe brand and store system.
EARNINGS
Once we make a determination of your interest and qualifications, you will receive
our Uniform Franchise Offering Circular (UFOC). We do not supply earnings
information other than sales data, if any, compiled in the UFOC. Powell’s Sweet
Shoppe USA cannot guarantee what earnings you may make; however, we feel that
the success of your store depends a great deal upon how you monitor and manage
inventory and payroll expenses. If you follow the established Powell’s Sweet Shoppe
system and utilize available resources through our field and corporate staff, your
opportunity for success will be substantially improved.
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STORE LOCATIONS
Target store locations include “Main Street USA” shopping districts, tourist-oriented
retail areas, resorts, retail districts near Universities, and specialty retail locations
such as Children’s hospitals and airports. Accessibility and rental rates for good
locations will vary depending on general economic conditions, competition for real
estate, and the size of the market area. Extensive site selection criteria have been
established by our management. After you sign the Franchise Agreement, we will
provide you with the Powell’s Sweet Shoppe Pre-Opening Manual, which includes a
step-by-step guide to finding and securing a location and negotiating the lease. Prior
to committing to any location, you must identify several potential sites that meet our
site criteria, and submit them for our review, inspection, and final approval.
STORE DESIGN AND CONSTRUCTION
Powell’s Sweet Shoppe store sizes vary depending on store type and location
because it is difficult to dictate the exact size of available retail space in any given
market. Powell’s full-concept stores average about 1200 square feet of actual retail
display area. In order to maintain consistency of design, quality of store build-out,
and to ensure that each store is designed for maximum operational efficiency,
Powell’s Sweet Shoppe USA maintains strict control over the design and finish
materials of all stores.
Complete fixture and finish design specifications and detailed guidance regarding the
build-out process (including required permitting) is included in the Powell’s Sweet
Shoppe USA Pre-Opening Manual, which is provided after you have executed the
Franchise Agreement and paid the franchise fee. The manual includes checklists,
recommended orders, and other helpful information. Powell’s specifications create a
clear picture of the steps necessary to build out your store and provide guidance to
you, your architect (if applicable), and your general contractor. In addition, our
Design and Development Department staff will work closely with you and your
construction team.
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AN OVERVIEW OF THE PROCESS – FROM APPLICATION TO STORE OPENING
After reviewing this information package, call our franchise development team at
(707) 237-2688 (or email [email protected]) with questions.
If you decide to apply, go to our website (www.powellssweetshoppe.com) , download
and complete the Powell’s Sweet Shoppe Franchise Application, and email it to
[email protected] or fax it to (707) 324-8555. The Application is
a preliminary statement of your interest and qualifications.
We will review your application and, if you meet our preliminary qualifications, we
will send a copy of our Uniform Franchise Offering Circular (UFOC), which contains
more specific information about the franchise opportunity offered by Powell’s Sweet
Shoppe USA The UFOC includes a copy of the Franchise Agreement, our audited
financial statements, and a list of existing franchisees with contact information. Once
you have received the UFOC, we urge you to review it carefully with your attorney or
accountant to determine whether the opportunity is compatible with your personal
goals and current financial position.
Upon receipt of the UFOC please call our franchise development team to discuss any
questions you may have and to assess your interest in pursuing a franchise. If you
wish to continue the process, you must complete and return for our review the
detailed financial statement attached to the UFOC. At this time, you should also be
prepared to discuss possible location(s) with our franchise development team.
Once you are approved by Powell’s Sweet Shoppe USA, the next step will be
preparation and execution of the Franchise Agreement and payment of the
franchise fee.
Once the Franchise Agreement is executed and the franchise fee has been received,
we will issue a copy of the pre-opening manual. The next step will be to finalize a
site for your store. Once a site has been inspected and approved by our Design and
Development Department, we will provide you with CAD drawings of your
preliminary floor plan (based on the actual approved site) and an example set of
plans for your architect to utilize in preparing blueprints. Our Design and
Development Manager will be in close contact with you during the design and
construction process.
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At the next scheduled opportunity (within 90 days of confirming the store site and
beginning construction); you and your manager(s) will attend the franchise
management training program in Windsor.
The Field Support Team will provide direction and support throughout the preopening phase and on a continuing basis after the store is opened. When your store
opens for business, a member of our Field Support Team will be there to assist you.
Website: www.powellssweetshoppe.com
Email: [email protected]
Telephone: (707) 237-2688 – voice, (707) 324-8555 – fax
THIS COMMUNICATION IS NOT DIRECTED TO ANY PERSON IN THE FOLLOWING
STATES: CA, FL, HI, IL, IN, KY, MD, MI, MN, NE, NY, ND, RI, SD, TX, UT, VA, WA
AND WI, BY OR ON BEHALF OF THE FRANCHISOR OR ANYONE ACTING WITH THE
FRANCHISOR’S KNOWLEDGE. THE FRANCHISOR MAY NOT OFFER OR SELL
FRANCHISES IN THE STATES LISTED ABOVE UNTIL A FILING HAS BEEN MADE AND
DECLARED EFFECTIVE BY THE APPROPRIATE REGULATORY AUTHORITY AND A
FRANCHISE OFFERING CIRCULAR HAS BEEN DELIVERED TO THE INTERESTED PARTY
PRIOR TO THE SALE AND WITHIN THE TIME FRAME REQUIRED BY LAW.
THANK Y OU
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