Fannie May offering candy franchises

By Becky Yerak
Posted June 23, 2010 at 3:20 p.m.

Snowbirds and others outside the Chicago area might find it easier to get their Fannie May fix in the future. 1-800-Flowers.com, which in 2006 bought the Chicago-based maker of Pixies, Trinidads and Meltaways, has begun what it says is the first franchising program ever for Fannie May.

“We’ve only just begun our outreach to potential franchisees,” Fannie May spokesman Joseph Pititto said.

Fannie May currently has 81 company-owned stores. It once had as many as 300 company owned stores, but it fell on hard times and its owner filed for bankruptcy protection in 2004. Alpine Confections had bought Fannie May out of bankruptcy in 2004 and two years later sold it to 1-800-Flowers.

1-800-Flowers has bolstered Fannie May’s e-commerce business but also sees more retail opportunities.

1-800-Flowers envisions more than 100 franchised Fannie May locations in the next several years, Pititto said. Its initial push will be to fill in Midwest gaps from St. Louis to Minneapolis, but locations as far away as Arizona and Florida could be set up, he said.

Indeed, in January in Miami Beach, Fannie May Franchise LLC will attend the Franchise Expo South, where entrepreneurs can learn about franchise concepts.

But becoming the owner of a Fannie May store won’t come cheap.

For an average market, the estimated required investment for a startup franchise ranges from $260,000 to $460,000.

Fannie May’s 81 company-owned stores are currently mostly in Illinois, with a sprinkling in such states as Ohio, Iowa, Indiana and Missouri. Fannie May continues to open company-run stores, and another eight company-run stores are slated to open in the Chicago area this year.

The first Fannie May store was opened in 1920 at 11 N. LaSalle St. in Chicago. For more than 80 years Fannie May chocolate was made at a plant on West Jackson Boulevard.

The plant was shut down in 2004, and now Fannie May chocolate is made in Canton, Ohio. The Canton facility currently makes 10 million pounds of chocolate but has the capacity to make more than 15 million pounds, Pititto said.

To find out more information about Fannie May franchising, click here and here.

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One comment:

  1. Keith Carleton CFE June 25, 2010 at 12:12 pm

    Becky,
    Responsible journalism demands credible, balanced research…something which I feel that you failed to represent in your article about Fannie May Chocolates. Your comment about the opportunity not coming cheap is ill-informed and presents a negative view about investing in the franchise. The investment range that you quoted is in fact inclusive of: the franchise fee, headquarter training & startup training, equipment, point of sales system, construction & leasehold improvements, furniture & fixtures, professional fees, deposits for rent or utilities, supplies, opening inventory, and working capital. If you tried putting all of that together on your own, what do you suppose it would cost you? Additionally, with the investment in a franchised concept you will have a storied, recognizable brand, operating system, and supporting infrastructure behind you that seeks to minimize your missteps and mistakes along the way (keep in mind that they have a vested interest in keeping you fiscally happy). This, they accomplish through tested, structured processes and practices, and ongoing education of the brand and the business concept. Few individuals or mom and pop startups can do all of that for less than that quoted investment range, unless they have stumbled into perfection, where every decision was a good one and not one dollar spent was ever wasted.

    In order to offer franchises, the franchisor by law, must disclose ALL costs relating to the startup of the business to interested individuals, which is something that you never realize up front when you are starting up an independent business and concept on your own. They are directed to do so through the issuance of a Franchise Disclosure Document (FDD); a document that contains very specific information about the concept, its principals, its costs, and the obligations of each party in the franchise relationship. With a little more research (perhaps through contacting the International Franchise Association or their website) of other opportunities in their industry category you might find that for a retail or food service brand, Fannie May has achieved what is considered a “sweet spot” for their investment range. It is challenging to have the investment range be considerably less than what they have represented, without losing the integrity of the brand image (appearance, decor, location) or the operating capacity (equipment, furniture, fixtures, etc.), where the quality of the materials utilized actually make a difference in how the store functions.

    Perhaps your article was edited to the form that it is; where you have accomplished little more than revealing the failures of the brand, or that your own entrepreneurial views got in the way of presenting an objective viewpoint. Either way, your article which seemed to be composed of bullet points of bits and bytes, was not a flattering portrayal of the opportunity or the company…nor of what franchising brings to the table and the world economy.

    Keith Carleton, CFE
    Atlanta, Georgia