A Gifted Team
Fannie May wasn't the first to court this multi-unit Wendy's franchisee. But like a box of chocolates, the deal proved too sweet to resist.
A wise chocolatier once opined, ”Chocolate makes everyone smile—even bankers.” Well, it seems the richness of chocolate in a retail setting makes multi-unit franchisees smile as well—all the way to the bank.
Balancing two operations is second nature to Mike Givens. As a 14 year old he worked from 6 a.m. to 6 p.m., six days a week, in the potato fields; hitchhiked home; took a shower; and then reported to his second job in a meat market. “I am very driven,” the Wendy’s multi-unit franchisee says. So driven, in fact, that the farmer who was his boss helped form a banking co-op and had to offer to give Givens time off work so he’d cash all the back paychecks he had been sticking in a drawer. He bought his first car at 16 and his first house at 19.
“The quality of the senior management at Fannie May is the same as Wendy’s,” says Mike Givens, with (front to back) Megan Givens, Dan Turnquist and Jerad Ducklow.
So it’s no surprise that when Fannie May decided to franchise its storefront candy stores, management began courting Givens, who clearly has the work ethic they are looking for.
Successful multi-unit restaurant operators are the franchise equivalent of rock stars. Everyone wants these talented operators to join their system, and many have more suitors than they can handle. Fannie May wasn’t the first, nor the only, to approach Givens about becoming a franchisee of their system, but when it came to a premium chocolate brand, Givens was thinking what’s inside the box is a pretty sweet deal.
Givens’ son Michael works on the Wendy’s side of the business and Givens was looking for a business his daughter, who attended the University of Denver on a basketball scholarship, would be interested in building. The brand had another plus: Unlike other candy stores where customers buy it by the piece for personal consumption, Fannie May chocolates tend to be gifted items.
“The quality of the senior management at Fannie May is the same as Wendy’s,” Givens says, “and that’s what I was looking for.”
He brought in two partners: Junior Bridgeman, a multi-brand franchisee, including Wendy’s, out of Louisville who had become a close friend, and Rod Burwell, an entrepreneur who owns scientific-testing laboratories, John Deere dealerships, hotels and various other ventures. Givens runs the Fannie May operation out of his offices in Oakdale, Minnesota.
Givens owns FourCrown, whose name was a tribute to the original four founders, with Dan Opitz. If you want to check out what kind of a Wendy’s franchisee FourCrown is, all it takes is perusing the large trophy case in the lobby of his spacious office suite. Almost out of view is the large, bronze bust of Dave Thomas, the most coveted honor in the Wendy’s chain. It’s on the bottom shelf, Givens explains, because it’s too heavy for a higher, more visible, glass shelf. Above it sits a gold statue of a young Wendy Thomas, the daughter the founder Dave Thomas named the chain after, and several glass bowls and plates and trophies, all engraved with the honor and the date.
That ability to run a top-notch organization is what Fannie May executives saw in him.
“Mike Givens, Mike’s partners and his company are proven multi-store operators,” said David Taiclet, president, Gourmet Food Group, a division of 1-800-Flowers.com, the parent company of Fannie May. “They are experienced and successful operators and are recognized as some of the best operators by their current franchisors.”
The three business owners formed GB Chocolates to develop 45 of the premier candy stores in a nine-state region that takes in the Midwest, where Fannie May has had a strong following since the first store opened in Chicago in 1920. The GB partnership also purchased 17 existing stores from the franchisor. All new stores are to be opened by year-end 2014.
Givens has put together an impressive but small team to run the candy side of the business. His daughter, Megan, 24, was responsible for opening the first three stores, all in the Minneapolis area, before moving on to tackle their gift business. On the day Franchise Times visited their office, she was putting together a number of gift programs, as varied as wedding favors where the bows on the gift boxes match the bridesmaids’ dresses to glass jars of candy with the Minneapolis Vikings’ logo stenciled on them for the football team to hand out to their hospitality suite holders.
Top photo, a worker prepares one of the candy molds in the artisan chocolate area of the Fannie May factory. Center, a tray of finished artisan chocolates labeled with the date. Bottom, strawberries dipped in white chocolate.
Dan Turnquist is the chief financial officer of Michael’s Holdings, which includes both FourCrown and GB Chocolates. And Jerad Ducklow was recruited to be director of operations for GB.
While both franchises deal with food—Givens admits to eating Wendy’s fare almost daily and Fannie May chocolate regularly—the businesses are as different as dinner and dessert.
“The largest challenge is seasonality,” Ducklow says. “There’s no easy way to plan.” But they do have a plan. As might be expected of a business owned by 1-800-Flowers.com, sales are seasonal, which means gearing up for large holidays and reducing staff levels during the slower months when customers are coming in for smaller orders. Stores still need to be in high-visibility areas, such as shopping centers anchored by a grocery store, so customers get used to seeing the signage and will remember it when a gift occasion presents itself.
Irregular, seasonal cash flow has to be accounted for, as well as how to gear up and then down for slower retail times. Which is why Megan Givens’ charge is to uncover every gift avenue out there, from placing chocolates on a hotel pillow to youth fund-raising projects to corporate holiday gift giving.
Everything’s coming up flowers
As a company, Fannie May fits nicely into the 1-800-Flowers.com grouping of businesses that all deal with gifted items that can be ordered online. The company was purchased in 2006, and Dave Taiclet became president of the Gourmet Food Group.
The owner of the online flower delivery business believed that expanding into the food gifting arena gave them a competitive advantage, Taiclet says, which includes The Popcorn Factory, Cheryl’s cookies and brownies and Fruit Bouquets. There’s even winetasting.com, and stockyards.com for people who like their gifts to be protein.
The company just started franchising Fannie May, a 90-year-old company, a little over a year ago. GB Chocolates is their largest franchisee so far.
Taiclet says they’ve found the brick-and-mortar business helps the online business. Products sold in the stores have a different recipe from the ones sold through other channels, such as drugstores, because the branded retail stores turn the products over more quickly and therefore the chocolates don’t require the preservatives needed for longer shelf life.
The 400 sku’s in the stores are divided into three price points: bins of individually wrapped candies that can be mixed and matched for $14.99 a pound; their “bread-and-butter” signature line that retails for $24.99 a pound and is either pre-boxed or customer selected; and the artisan chocolates that sell for $2.50 a piece.
Shelf life for the signature line is around 28 days, while the artisan chocolates have just 15 days in the store.
The chocolate factory
There’s nothing Willy Wonkaish about Fannie May’s chocolate factory in Canton, Ohio. And even though our tour was being given by a distinguished-looking man in a white lab coat and the mandatory hairnet, it was hard to not hope to see rivers of chocolate, lickable wallpaper and orange-faced Oompa Loompas, so memorable in the 1971 movie “Charlie and the Chocolate Factory.”
Instead we found a modern-day, 200,000-square-foot factory with vats of high-quality melted chocolate being shaped into various renditions and flavors for the boxes of candy someone will receive on Valentine’s Day, Mother’s Day or some other festive occasion.
More than 20,000 paying guests tour the factory each year, including school groups and tourists. A history of the company is wallpapered (alas, not lickable) on the wall leading into the tour, and visitors can see the workings of chocolate-making from a hygienic distance behind glass walls. The factory is the original Harry London facility, which is also part of the Fannie May offering. In addition to the factory store, the Harry London line is sold at Dillard’s and Macy’s department stores, and the factory also produces private-label chocolate for other retailers, according to Ed Fitzpatrick, our tour guide for the day and vice president of retail operations.
Ed Fitzgerald, Fannie May’s vice president of retail operations, stands at the beginning of the Canton, Ohio, factory tour, which includes history as well as samples of the premium product.
At the front of the building is an oversized retail shop, where the company’s various lines of chocolates are colorfully displayed for both tour attendees and locals in need of a chocolate fix or gift item. In the interest of full disclosure, we ate quite a bit of the product in order to be able to honestly say, it’s some of the best chocolate we’ve ever overeaten.
Above the public store and the corporate offices is the training store, where franchisees learn how to merchandise, run the POS system and box chocolates. The new store design is trending toward lighter-colored wood cases and shelving, along with some darker wood, to lighten up the space. Mobile display shelving can be wheeled into the stores during the heavy buying times, and rolled away when demand is down. The changing seasons are reflected in the displays—i.e. fall colors and pumpkins for Thanksgiving, spring colors and symbols for Easter.
Size of Olympic pool
The factory is able to run three shifts when needed and seven giant vats hold 90,000 pounds of chocolate, the same as an Olympic swimming pool, which then becomes 8 million to 10 million pieces of chocolate.
Workers wear hairnets, but no false fingernails or jewelry. And no colognes, since chocolate can take on the scents around it. Like a world-class traveler, the chocolate goes through a metal detector before being shipped—just to be sure nothing foreign made its way into the final product. Any pieces of chocolate deemed “seconds” because of size or shape are used for sampling, Fitzpatrick says.
One level down from the store is the artisan chocolate factory, where edible works of art are created by pouring chocolate and natural flavorings into cocoa-dusted molds. A sign on the stairway up reads: “Chocolate for the soul, exercise for the heart.”
Norman Love, a well-known chocolatier in charge of the artisan line, likes to take “everyday indulgences and put them into the experience of chocolate,” Fitzpatrick says. The visual is as important as the taste in artisan chocolates, he adds.
The chocolate shell is tinted to a variety of strong hues not normally associated with chocolate, in interesting shapes. The butter-rich ganache is flavored with unusual pairings of natural ingredients that become sinful when placed inside the thin chocolate shell. About 10,000 pieces of artisan chocolate are made by hand a day, Fitzgerald says. Love is sent samples every day—not as an indulgence, but for quality control.
Outside the cramped artisan production room, two employees carefully dip oversized, specialty strawberries in white and dark chocolate. Once the chocolate sets, the berries are shipped overnight to their destination.
Quality has always been Fannie May’s motto, even during World War II when the premium ingredients were hard to come by. The stores at that time would only open their doors the hours it took to sell what little candy they were able to make utilizing solely the premium ingredients they could secure from among the rationed items, Fitzgerald says.
Seeking solid franchisees
Today, scarcity of premium ingredients is not a problem. Fine chocolate not only has a cult following, it’s seen as one of our inalienable rights—inadvertently left out of the Declaration of Independence.
While Midwesterners indulged in Fannie May, Easterners were enamoured with its sister brand, Fannie Farmer.
Fannie May currently has three franchisees, GB with the largest territory by far. In addition, they’ve signed a three-unit deal in Florida, and a 15-store deal in the Calvary-Edmonton, Canada, area. But with product samples being handed out at numerous franchise expos and franchise conferences, expect to see one in your neighborhood soon. Or, if you’re a solid, multi-unit franchisee in the food business, perhaps you should be expecting a call.