Strong Macroeconomic Underpinnings
The U.S. Commerce's most recent report confection products projects retail sales in 2002 at $24.3 billion and a 2.7% increase in yearly sales. There already exists substantial demand for bulk candy (a multi-billion dollar market in itself). Candy Express® is the retail delivery vehicle to not only fill, but also further stimulate this demand.
Ability to Acquire Prime Locations and Enthusiastic Response from Major Shopping Center Owners and Developers
Site ownerships view Candy Express® as a very contemporary, retail designed concept and most appropriate to center court locations, positively affecting their tenant mix, image, "entertainment" requirement and revenues.
Experienced Management
Management has substantial experience in the development and operation of impulse-oriented, specialty retail, multi-unit operations.
Simplicity of Candy Express® Store Operations
Self-service, low labor costs, shelf life up to one year, and highly effective operating systems.
Candy Express® is well suited to continue its Success Even in a Recessionary Climate
Instant gratification for the customer, low average transaction price, convenience of purchase, quality of presentation, and the entertainment factor all appeal to the mall frequenter (who will be present in good times and bad) and particularly during recessionary times.
Rapid Roll-Out Capability
The ability to rapidly roll-out Candy Express® stores is facilitated by many factors, including the experience of the management, the relative simplicity of store operations, the strong cash flows generated by the stores, the relatively low break-even point, and the availability of prime store sites.
Opportunity Analysis
The confection industry has succeeded in attracting more customers to purchase more frequently, thereby significantly stimulating total consumption. Major factors contributing to the industry's growth are indicated in trends in consumer lifestyles, with dual income families producing more disposable income, less time for food preparation and increasingly hectic lifestyles. Sales of convenient ready-to-eat indulgent foods are at an all time high and growing rapidly.
Candy Express® is tapping this explosive market by employing effective purchasing and merchandising strategies with a unique and creative store environment. The Company has developed a specialty retail concept that generates high volume sales in an efficient and effective operating system. Candy Express® has acquired a unique level of knowledge and expertise few businesses can rival - a vital advantage in specialty retailing where market conditions change rapidly.
There are at least hundreds of locations within the United States with economic characteristics sufficient to support a Candy Express® store. Other business derivatives, such as mail order, specialized gift merchandising, and international licensing could increase the potential market even further.
The enthusiastic and aggressive response from national shopping center owners and airport leasing representatives to Candy Express®’ concept provides the Company with the ability to continually obtain prime locations. The Company's existing prime location location inventory validates Candy Express®' unique appeal to developers of prime retail projects throughout the country.
The financial opportunity for participating in the growth of Candy Express® is supported by the following additional factors:
Candy represents a $13.5 billion plus retail market in the U.S., projected to grow at almost 5% per year (see Markets and Competition). There already exists substantial demand for bulk candy (a multi-billion dollar market in itself). Candy Express® is the retail delivery vehicle to not only fill, but also further stimulate this demand. Candy Express® has the capability to do so in the nation's most concentrated and pervasive shopping environment.
Management has substantial experience in the development and operation of impulse-oriented specialty retail multi-unit operations.
The dramatic, striking colorful store design, which was created by management with the help of the internationally renowned design firm, Fitch, captivates consumers and site ownerships alike. Management believes that the unique Candy Express® designs would be difficult and costly for a potential competitor to improve upon or legally duplicate.
Few national firms utilize a sophisticated program similar to Candy Express® with a professionally designed, fashion oriented presentation.
Candy Express® currently has the opportunity and ability to preempt meaningful competition.
Instant gratification for the customer, low average transaction price, convenience of purchase, quality of presentation, and the entertainment factor all appeal to consumers equally in both economic boom times and recessionary times.
Silver lining for well-positioned retailers: 1) more and better regional shopping center locations and airport locations become available and on more favorable terms; and 2) ability to increase market share.
The ability to rapidly roll out Candy Express® stores on a national basis is facilitated by many factors, including the experience of the management group, the relative simplicity of store design and operations, the strong cash flows generated by the stores, the relatively low break-even point, and availability of prime store sites.
In summary, Candy Express® has the potential and current positioning to be one of the most successful specialty retail confectionary formats in the United States over the next ten plus years.
The Investment
Listed below are the total projected expenses involved in opening a Candy Express® franchise. Although many of the items are fixed prices from suppliers, some items may vary from store to store. This projection is based on the typical Candy Express® store being 1,000 square feet in size. Prices can not be guaranteed and may vary according to size and conditions of the space at the time of construction, geographic location and time of year.
Although we feel this is an accurate projection of the investment we cannot guarantee the costs.
| ITEM |
Low Estimate |
Medium Estimate |
High Estimate |
| Store Construction |
$40,000 |
$80,000 |
$120,000 |
| Store Fixtures & Plexiglas Bins |
$30,000 |
$60,000 |
$90,000 |
| Cash Registers |
$5,900 |
$5,900 |
$5,900 |
| Chocolate Cases |
$8,256 |
$8,256 |
$11,580 |
| Light Fixtures |
$2,000 |
$5,000 |
$7,500 |
| Storefront Sign |
$3,200 |
$5,000 |
$6,500 |
| Opening Inventory |
$25,000 |
$35,000 |
$45,000 |
| Store Opening Supplies |
$5,000 |
$7,500 |
$7,500 |
| Freight |
$3,000 |
$3,000 |
$3,000 |
| Pre-opening Payroll Expense |
$2,000 |
$2,000 |
$2,000 |
| Franchise Fee |
$35,000 |
$35,000 |
$35,000 |
| Legal Fees -lease negotiations |
N/A |
$3,000 |
$3,000 |
| Real Estate Fee - site selection |
$5,000 |
$5,000 |
$15,000 |
| Architecture Fee - construction documents |
$1,900 |
$3,900 |
$7,500 |
| Design Fees-store design |
$5,500 |
$5,500 |
$5,500 |
| Additional Funds |
$3,000 |
$5,500 |
$8,500 |
| TOTAL |
$174,756 |
$269,556 |
$373,480 |
The Return
The franchisor makes no claims as to the earning potential of prospective franchisees. The company, however, is dedicated to providing the support and guidance franchisees need to open and successfully operate a Candy Express® store. Our success is intimately linked to the success of our franchisees. We urge prospective franchisees to contact current Candy Express® franchise owners to learn about the personal and financial rewards of owning a Candy Express® store.
|
