FRANCHISE INFORMATION PACKAGE
Table of CONTENTS 4 5 6 7 8 9 10 11 12 15 About Us Our Mission Our History Our Exciting Journey Are we the Right Business for you? KEY MILESTONES TRAINING PROVIDED SUPPORT OFFERED APPROXIMATE INVESTMENT AND FEES FAQs Next Steps
Oven to Table About Us Every day, in every bakery, COBS Bread bakers create a range of traditional and gourmet breads. All products are baked from scratch, fresh daily on the premises. At the end of each day, most unsold products are donated to local charities. COBS Bread bakeries are distinctive in appearance, branding, product quality and customer experience. We are committed to establishing and maintaining mutually beneficial and rewarding relationships with all our business partners employees, franchisees, suppliers, and customers. 4
Our Mission Real Bread, Real People, Real Delight The COBS Bread brand has been built on our commitment to the quality of our product, the development of our people and the delight the combination of these two elements brings to our customers. 5
Our History Our Exciting Journey COBS Bread is part of one of the most successful franchise bakery networks in the world - Bakers Delight. An Australian owned company, Bakers Delight has been in operation for more than 30 years, with more than 700 bakeries across Australia, New Zealand, and Canada. Bakers Delight (trading as COBS Bread in Canada), Australia and New Zealand s largest retail bakery business was established in 1980 as a single bakery on Glenferrie Road in the Melbourne suburb of Hawthorn. The founders of that bakery, fourth generation baker Roger Gillespie and his wife Lesley have since grown the company into one of Australia s most successful and celebrated retail operations. COBS Bread was launched in Canada on November 13, 2003, with the first location in Edgemont Village in North Vancouver. The family owned business has since grown close to 80 locations over four provinces. 6
Are we the Right Business for you? We see our growth through franchising and are thus seeking the right business partners. Selection of new franchisees is based on criteria established to maintain the COBS Bread standards of excellence and ensure the right fit for both parties. Qualities we are seeking include: Demonstrated team management and strong leadership skills Ask yourself whether you re ready to: Follow the COBS Bread system Commitment to being hands on within the business Work in a physically demanding environment Attitude of doing whatever it takes to make the business a success Be active in sharing your success and failures to the network Good business acumen Get involved with your local community 7
Key Milestones The COBS Bread recruitment process is designed to assess your suitability for becoming a Franchise Operator and it is also your opportunity to determine if we are the right fit for you. It involves the following: Submitting an online inquiry Speaking with our Franchise Manager Attend a Skype interview with our Franchise Manager If pre-approved, attend a face-to-face interview with one of our Area Managers If a possible fit is determined, attend a 2 day Bakery and Sales Orientation at a local bakery Conduct your own due diligence with existing franchisees Review of candidates qualifications and demonstration of talent during Orientation will be conducted If you have been successful with the recruitment process and you are excited and eager to move forward, you will be approved for training and the next step is to commence the training program Successfully complete the training program Purchase your bakery (see Approximate Investment and Fees) 8
Training Provided The COBS Bread training program is designed to provide Franchise Operators the tools to operate their business successfully. It is competency based and generally takes 12-16 weeks to complete. The program introduces you to all aspects of running a bakery and covers: Operational management including baking skills, product knowledge and handling and production management. Financial management including purchasing and inventory control Business management including marketing and promotions People management including bakery staff development, team training and customer service The program is completed on-the-job within an allocated training bakery and includes online training modules, focused one-on-one training sessions and dedicated courses. Training bakeries are selected from the existing network based on the location of the trainee. You will receive training as well as ongoing mentoring and support from a current bakery franchisee. Trainees are required to financially support themselves during the training program. The training program is overseen by a COBS Bread training consultant who is available for additional support throughout the entire program. 9
Support Offered COBS Bread offers hands-on support and proven business procedures and systems to assist in managing your business to success. These systems and policies are continually enhanced to provide franchisees with streamlined, relevant and timely support in a range of areas. Marketing Strategic marketing support in the areas of advertising, media, design, product pricing, public relations, merchandising, local marketing and market research. Training Franchisee training program conducted at one of our training bakeries during a 16 week period. Additional training and development provided on an ongoing basis when the need arises. Operations Provide ongoing support and guidance for effective business management. Property Locating viable precincts and negotiating leases directly with landlords. Purchasing The necessary economies of scale in place to offer group purchasing arrangements at superior pricing and service. Finance Financial assistance including rostering and payroll systems, disclosure of group reports and negotiating bakery liability insurance through group coverage. Human Resources Our systems drive best practices and policies, including information in the areas of employee relations and other relevant legislation. At the discretion of the franchise owner there is an option to take part in the established benefits program. Point of Sale Cash flow, reporting and customer loyalty programs. IT Department Offer assistance relating to hardware, software, general administration and requests. Network Providing opportunities to network with other franchisees and benchmark results provides an invaluable support system. 10
Approximate Investment and Fees When a candidate has been approved for training, a decision is required on the bakery to be purchased. There are opportunities to purchase new bakeries or existing bakeries. The key will be to match Franchise Operators with a suitable location. COBS Bread will provide assistance in identifying a suitable bakery, outline the purchase process and commence the legal settlement process. The following outlines the approximate investment costs: New Franchise Purchase Fee $25,000 Training Fee $6,500 Bakery Establishment Costs $475,000 - $595,000 Existing Training Fee $6,500 Approximate Purchase Price $300,000 - $1,000,000 on-going fees Royalty Fees 7% Advertising and marketing 3% 11
Frequently Asked Questions Do I need to be a baker or do I need any previous baking experience? No. Our training program covers all aspects of the business including baking. Successful franchisees come from many different career backgrounds. What is the term of the agreement and initial fees? The franchise agreement is a ten year term. Initial fees equate to $25,000 (equivalent to $2,500 per year). Will COBS Bread assist with financing? It is the franchisee s responsibility to secure financing. We expect all applicants to discuss financing with their financial advisor or financial institution. However, we have established franchise financial packages with several major Canadian banks. 12
Am I able to choose my own location? There are new and existing location opportunities available for purchase and it is our goal to match the Franchise Operator with the most appropriate location. As we expand across Canada, our experienced brand development team continues to provide new location opportunities. They undertake the site selection process, secure the real estate, provide and install equipment and carry out the construction and leasehold improvements on all new locations. Can I purchase multiple COBS Bread locations? COBS Bread currently has Franchise Operators who own and operate multiple locations. Typically, following the franchisees first year of operation, ensuring that the initial bakery has a successful team in place and that the franchisee is financially capable, COBS would consider granting an additional bakery. What is the average size of a COBS Bread retail store? COBS Bread locations typically range between 900 1100 square feet. What are the typical hours of operations? Store trading hours are typically from 7am-7pm; however, because our products are baked from scratch daily, the opening shift can start as early as 1am. Does the Franchise Agreement include any trade area/territory protection? COBS Bread does not offer any territory protection but it is in our best interest to ensure that all bakeries are successful. The COBS Bread team will determine the optimal locations to open new sites. How does COBS Bread spend the 3% marketing and advertising fee collected? The marketing and advertising fund is allocated into three categories (examples of different initiatives are provided below): a) National campaign kits, direct mail, public relations b) Regional resources that benefit three or more bakeries including direct mail, mass sampling, and large events c) Local an equal dollar amount is allocated to each bakery to spend on initiatives such as donations, sampling, gourmet tastings, and community events. 13
What are the staffing requirements? Each bakery is typically made up of a Franchise Operator, Production Leader, Sales Leader and baking team. The number of staff per bakery will range depending on the individual needs and the number of part time and full time employees. How long does the process take? It is our experience that from the time of application to the time that the Franchise Operator opens their bakery or purchases an existing site; the process usually takes between 4 to 6 month which includes the 16 week training program. Please note that this time can vary significantly if suitable real estate is unavailable. Does COBS Bread allow Franchise partnerships or Outside Investors? A partnership can only consist of the franchisee and their respective spouse or common law partner. No other partnerships will be granted. Is COBS Bread a member of the Canadian Franchise Association? Yes, we have been a member since 2008. Additionally, we were awarded the Bronze Award in recognition of excellence in franchisor/franchisee relationships in the category of Traditional Franchises New/ Emerging by the Canadian Franchise Association in 2010 & 2012. We were also awarded the Franchisee Choice Designation in 2011, 2012, 2013 and 2014 by the Association. 14
Next Steps Excited to join the COBS Bread Family?... We are sure that this document will raise a number of questions and we are excited about working with you during this due diligence stage in order to provide the answers needed for you to make an informed decision. Please visit www.cobsbread.com/franchising/ for further details and to apply online. Thank you for your interest and we look forward to receiving your completed application. For additional information please contact: Linda Kawasaki Franchise Manager 844-838-2627 franchise@cobsbread.com 15