How Much Does It Cost to Open Edible Arrangement Franchise?

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Do you want to open a gift shop business by buying edible arrangement franchise? If YES, here is how much it cost to open a edible arrangement franchise successfully. Edible Arrangements through its unique business concept, appealing products, relentless innovation, cutting – edge technology, and supply chain solutions, has achieved unprecedented growth, delivering market-leading results in the gifting industry.

With the company’s ongoing commitment to delivering a “WOW”, it has propelled itself into a powerful global brand with over 1,200 stores in multiple international markets. Edible Arrangements has also been named one of America’s fastest – growing privately held businesses in America by Inc. Magazine, and one of the top franchise systems in Entrepreneur Magazine’s Franchise 500.

The general gifting industry is an enormous and growing sector, estimated at over $20 billion in the U.S. alone. Edible Arrangement in its own right has driven tremendous growth over 16 years by combining handcrafted artistry and gourmet quality ingredients, striking the perfect balance between health and indulgence.

Owing to the company’s advertising, word of mouth, online presence and impressive store networks, its brand affinity is exceptionally high. The company enjoys 82% Brand Awareness in the U.S. Due to the universal appeal of gifting, fresh fruit, and chocolate, the Edible Arrangements brand translates amazingly well across borders.

Edible Arrangements is also renowned for its large portfolio of proprietary and vigorously protected intellectual property. This includes technology, equipment, supplies, business processes, patents and trademarks. Due to years of commitment to shaping and protecting Edible Arrangements differentiated brand, franchisees can invest in the brand knowing the barriers for a new entrant are very high.

Financial Requirements of Opening an Edible Arrangement Franchise

According to the company’s FDD, here are key fees to understand when looking to franchise with Edible Arrangement.

1. Initial Franchise Fee: $15,000 to $30,000

You are expected to pay Edible Arrangements a substantial sum initial franchise fee when you sign the Franchise Agreement. Its standard initial franchise fee for new franchisees presently is $30,000.
But if you or your principal owner is an existing franchisee acquiring another franchise, the initial franchise fee typically is $20,000 rather than $30,000. However, as a special incentive, Edible Arrangements may offer existing franchisees or their principal owners acquiring another franchise a reduced initial franchise fee of $15,000.

2. Royalty

5% of Business’s weekly Gross Sales or $200, whichever is more (Minimum Royalty may be up to $40 daily if Edible Arrangements requires daily Royalty payments)

Due Date: Due on Monday of each week on Gross Sales during previous week ending Saturday (unless Edible Arrangements specifies a different payment period or chooses to debit your account daily).
This “Gross Sales” refers to all of your revenue from operating the Business (including your share of customer sales made through the EDIBLE CONNECT Program), but excluding taxes collected from customers if paid to taxing authority and reduced by refunds, credits, and allowances the Business in good faith gives customers.
It also includes insurance proceeds you receive for loss of business due to a casualty or similar event at your store location.

3. Marketing Fund (“Fund”):

Presently 2% of Business’s weekly Gross Sales (Edible Arrangements may increase this up to a total of 5% of Gross Sales if it concurrently and proportionately reduces your minimum local advertising and Area Cooperative obligations)

Due Date: Due on Monday of each week on Gross Sales during previous week ending Saturday (unless Edible Arrangements specifies a different payment period or chooses to debit your account daily).
Note that your total minimum Fund contribution and local advertising and Area Cooperative obligations will not exceed 5% of your Gross Sales (but see “Special Advertising and Promotional Programs” below).

4. Local Advertising: 3% of Store’s weekly Gross Sales

5. Area Cooperative: Cab reach up to 5% of Store’s Gross Sales

Due Date: As Area Cooperative directs.

6. Special Advertising and Promotional Programs:

As Edible Arrangements periodically directs based on franchisee vote, but Presently 3.85% of Store’s Gross Sales

Due Date: As generally incurred, but presently due on Monday of each week on Gross Sales during previous week ending Saturday (unless Edible Arrangements specifies a different payment period or chooses to debit your account daily).
Aside your Fund contributions and local advertising and Area Cooperative obligations described above, you are expected to participate in any national, regional, or local advertising or promotional programs approved by a majority of franchisees operating within the particular geographic area and, to the extent there are insufficient monies in the Fund or one or more Area Cooperatives available for or allocated to these programs, pay the necessary funds.
Note that these potential expenditures are not included in the 5% cap referenced above.
Since late 2007, Edible Arrangements franchisees annually have approved additional weekly payments (up to 4% of Gross Sales) for annual National Television Advertising and On – Line Campaigns.
Edible Arrangements also collects the additional amounts until it covers the campaign’s costs, which are estimated before the vote is taken based on Edible Arrangements’ research of advertising sources.
The present participation level is 3.85% of Gross Sales, which Edible Arrangements expects to remain in place through 2017.

7. EDIBLE CONNECT Program Fees

(including “Edible For Business” fee, formerly referenced as the “Edible Concierge” fee): Edible Arrangements reserves the right to charge up to 30% of price paid for order

Edible Arrangements presently charges 2% on total payment for each “standard” customer order placed through the on – line ordering system on its Website.
Edible Arrangements presently charges 20% (but reserves the right to charge up to 30%) on total payment for each order its call centre takes (an “Edible For Business” order) if a customer call is re – routed back to call centre for handling after a store location does not pick up original call forwarded to it.
Due Date: As incurred.
Edible Arrangements and/or third party may deduct the fee from customer’s payment for order and pay you the balance.

8. EMV Fees: All costs of service

Due Date: As incurred.
You might have to pay Edible Arrangements or bank processor a monthly fee or per – transaction cost.
EMV, which stands for “Europay, MasterCard and Visa,” is a global standard for cards equipped with computer chips and the technology used to authenticate chip – card transactions.

9. Computer Software and Technology, Support, and Upgrades:

Presently $165 to $300 per month (depending on number of users and locations)

Due Date: As incurred.
Edible Arrangements and/or its affiliates reserves the right to charge you up – front and recurring (e.g., weekly, monthly, or other) fees for proprietary software or technology licensed to you and related support services.
Note that this fee may increase as costs increase.
These fees are different from fees Edible Arrangements and its affiliates may charge for your presence on or participation in the Franchise System Website and any EDIBLE CONNECT Program fees.

10. Computer Systems, Maintenance, and Support: All costs of service

Due Date: As incurred.
Note that this covers computer system support (besides the items identified in the previous line – item).
Edible Arrangements does not now provide these services and therefore does not have a set charge.

11. Franchise System Website:

Present charge is up to $200 per month (not to exceed $300 per month)

Due Date: As incurred.
Edible Arrangements reserves the right to charge you a separate fee to be on or participate in the Website if the Fund or Edible Connect, LLC does not cover these costs. Edible Connect, LLC Presently pays for maintaining and updating the Franchise System Website.

12. Training for Additional or Replacement People When You Attend Initial Training Program:

Presently $2,750 per person (not to exceed $5,000 per person)

Due Date: Beginning of training.

13. Additional Training or Assistance During Franchise Term:

Presently $400 per day plus expenses for training at Edible Arrangements’ location; Presently $500 per day plus expenses for training at your location (in both cases not to exceed $1,500 per day)

Due Date: When training or assistance begins.
Edible Arrangements offers initial training for 2 people at no additional cost; it may charge you for training more than 2 people during initial training program (see previous line – item); for training newly – hired personnel; for refresher training courses; and for additional or special assistance or training you need or request.

Owner Re – Training (Decennial) for Renewal of Franchise: Presently approximately $500 per person for 2 days (not to exceed $1,500 per person)

Due Date: Beginning of training.

Manager Certification: Presently approximately $400 per person for 2 days (not to exceed $1,500 per person)

Due Date: Beginning of training.

Sales Certification: Presently, approximately $400 per person for 2 days (not to exceed $1,500 per person)

Due Date: Beginning of training.
This is optional continuing education offered to all franchisees.

Multi – Unit Owner/Manager Certification: Presently, approximately $400 per person for 2 days (not to exceed $1,500 per person)

Due Date: Beginning of training.

Renewal: $5,000

Due Date: Upon franchise renewal.

Transfer of Franchise Agreement or Controlling Ownership Interest: $10,000

Due Date: Generally, ½ due (and non – refundable) when you request transfer approval; balance due before transfer completed.
Due on transfer of Franchise Agreement or controlling ownership interest in you or your owners, except no charge if, upon a spouse’s death, the spouse’s interest in Franchise Agreement and Business, or the spouse’s ownership in you, is transferred to surviving spouse.

Transfer of Franchise Agreement or Controlling Ownership Interest (Netsolace): $1,200

Due Date: Due to Netsolace (and non – refundable) for set – up of Netsolace system with buyer; generally charged to buyer.
Due on transfer of Franchise Agreement or controlling ownership interest in you or your owners, except no charge if, upon a spouse’s death, the spouse’s interest in Franchise Agreement and Business, or the spouse’s ownership in you, is transferred to surviving spouse.

Transfer of Non – Controlling Ownership Interest: $500

Due Date: Due (and non – refundable) when you request transfer approval.
Due on transfer of non – controlling ownership interest in you.

Incorporation Fee: $350

Due Date: Due (and non – refundable) when you request approval.
Due once you decide to assign Franchise Agreement held by you individually to a legal entity for convenience of ownership.

Entity Name Change Fee: $350

Due Date: Due (and non – refundable) when you request name change.
Due once you want to change name of franchisee legal entity.

Product and Service Purchases

Due Date: As incurred.
You are expected to acquire products, supplies, and services from (i) Edible Arrangements or its affiliates, (ii) designated and approved vendors whose items meet Edible Arrangements’ standards and specifications and (iii) other suppliers to the industry in which Edible Arrangements Businesses operate.

Testing: The cost of testing when you make request

Due Date: When billed.
Note that this covers costs of testing new products or inspecting new suppliers you propose.
Edible Arrangements Presently has no set fee for this because it has not done this testing.

Convention: Tend to vary under circumstances (not to exceed $2,500 per person; does not include your actual out – of – pocket attendance costs)

Due Date: As incurred.
You (or your designated representative Edible Arrangements approves) are mandated to attend Edible Arrangements’ annual or biennial franchise conventions and pay an attendance fee.
Edible Arrangements will charge this fee even if you do not attend.

Franchise Resale Assistance: 5% of sales price (but capped at $10,000) (you also must pay transfer fee)

Due Date: As incurred.
You are expected to pay this amount if you want to sell your franchise and Edible Arrangements finds a buyer for you. You are expected to sign its Franchise Resale Agreement or a similar document specifying Edible Arrangements’ and your obligations if Edible Arrangements helps you sell your franchise.

National Advisory Council Fee: Reimbursement of costs for Council’s administration and operation

Due Date: When billed.
You are expected to participate in any National Advisory or similar council Edible Arrangements establishes, and pay assessments and dues.
Edible Arrangements presently does not charge any assessments or dues.

Audit: The cost of inspection or audit, which may be up to $2,500 per day

Due Date: 15 days after billing.
Due once you fail to give Edible Arrangements reports, supporting records, or other required information, or you understate required Royalties or Fund contributions by more than 3%.

Late Fee: $50 for each 30 – day period a payment is late (under Franchise Agreement); 1 ½% interest due on late payments under Netsolace Software License and Maintenance Agreement

Due Date: When billed.

Non – Approved Opening: $200 for each day Business operates without Edible Arrangements’ approval

Due Date: When billed.
Due once you begin operating Business before Edible Arrangements approves.

Non – Compliance Fee: $250 per violation

Due Date: When billed.
Due (at Edible Arrangements’ option) once you deviate from contractual requirements, including System Standards. This compensates Edible Arrangements for administrative and management costs, not for its damages due to your default.

Records Deficiency Fee: $250 per violation

Due Date: When billed.
Due (at Edible Arrangements’ option) for each category of required records you fail to maintain for each year (or portion of a year) for which Edible Arrangements seeks to perform an examination or audit.
Note that this compensates Edible Arrangements for administrative and management costs, not for its damages due to your default.

Reconciliation Fee: $50

Due Date: When billed.
Due if Edible Arrangements must reconcile your account because you did not submit a weekly report.

Daily Close – Out: $50

Due Date: When billed.
Due once you fail to close out your sales daily.

Processing Fee: Can reach up to $250 per day

Due Date: When billed.

Processing fee applies if Edible Arrangements must apply incoming customer payments against your past due balance to it or others or must manually push funds to your account because of your customer service issues or order fulfilment issues.

Proprietary Materials Non – Return Fee: $5,000

Due Date: As incurred.
Due for each piece of proprietary equipment or other materials you do not return to Edible Arrangements when required.

Operations Manual: The cost reimbursement (not to exceed $500)

Due Date: 15 days after billing.
Once you lose access to Operations Manual due to your own fault, you are expected to reimburse Edible Arrangements’ costs for regaining access for you.

Management Fee: $400 per person per day (plus costs and expenses)

Due Date: As incurred.
Due when Edible Arrangements manages the Business after you or your managing owner’s death or disability, or after your default or abandonment.

Costs and Attorneys’ Fees: Tend to vary under circumstances (depending on extent of your noncompliance)

Due Date: As incurred.
Due when you do not comply with the Franchise Agreement.

Indemnification: Tend to vary under circumstances

Due Date: As incurred.
You are expected to reimburse Edible Arrangements if it is held liable for claims from your Business’s operation or incurs costs defending them.
Similar indemnification obligation exists under Netsolace Software License and Maintenance Agreement.

Store Maintenance Costs: will vary under circumstances (depending on extent of your noncompliance)

Due Date: As incurred.
You are expected to reimburse Edible Arrangements if it incurs costs to maintain your store location’s condition because you fail to do so.

Insurance Reimbursement Costs: will vary under circumstances (depending on extent of your noncompliance)

Due Date: As incurred.
You are expected to reimburse Edible Arrangements if it obtains insurance coverage for you.

Tax Reimbursement: out – of – pocket cost reimbursement

Due Date: As incurred.
You are expected to reimburse Edible Arrangements for any taxes it must pay to any state taxing authority on account of either your operation or your payments to Edible Arrangements (except for its income taxes).

4 Steps on How to Open an Edible Arrangement Franchise

Anyone interested in opening an Edible Arrangements’ franchise or purchasing one of its “ready to own” locations is expected to meet specific franchising requirements. If you meet these requirements, here are steps to take to acquire Edible Arrangement Franchise.

a. Contact the Company

The first step in owning an Edible Arrangements’ franchise is to contact the organization’s development team. The team will answer any questions you have about the company and what it takes to get started. At this point, you are expected to complete a franchise application, in which you must disclose your education, work experience, available financial resources and your overall motivation for wanting to open the franchise.

Also take time to review the franchise disclosure document. This is a pre – sale document that describes important information about the Franchise Company and opportunity.

b. Create a Business Plan and Perform Due Diligence

Immediately the franchise application has been completed, you are advised to go through a due diligence process. During the due diligence period, you should write a business plan and attend a “discovery day” at the company’s corporate office in Connecticut.

Remember that the discovery day provides additional information about the Edible Arrangements’ brand and gives you the opportunity to meet senior executives. The due diligence period is also the time when you can secure financing for the franchise investment.

c. Franchise Approval Process

At this stage, the company will issue a final approval of your franchise application and execute a franchise agreement. Have it in mind that Edible Arrangements has a real estate team that will help you find the right location within your market for the new store. The team is also charged with helping you negotiate real estate terms and finalize the lease agreement for your space. Prior to opening your business, you must complete a grand opening plan as well as attend training.

d. Prepare for Costs and Starting your Business

You are expected to make a substantial financial investment to own an Edible Arrangements’ franchise. The total investment cost for a location including equipment and real estate can range between $230,000 and $390,000. Consult the financial requirement section mentioned above to get a clear picture of the fees you are expected to pay.

Conclusion

Edible Arrangement offers fresh fruit products arranged in creative bouquets as well as fruit juices, smoothies and dipped fruit. With over 1,200 locations that continue to expand through worldwide franchise opportunities, this franchise might be ideal for any willing candidate in the United States.