Say Cheese!

What's Heartburn, the California Coast, the Big Dipper, the Little Dipper, a Yoga Teacher, Nasal Drain, A Green Sailor, and a French Kiss have in common?

Well unless you live in the Denver area you'll probably never guess - but CHEDD's Franchising Corporation is hoping to change that as they begin to franchise - Chedd's Gourmet Grilled Cheese.  Oh yeah, they are just a few of the Grilled Cheese sandwiches which you can get at Chedd's for $6.25 or for $2 more you can make it a meal.

CHEESE BIZ HOPING TO GO NATIONALLocal Sandwich Entrepreneurs Look to Make a Grilling in FranchisingBy AJ Miranda, Denver Post Staff Writer

Dirk Bruley and his wife, Wendy, opened their first Chedd's Gourmet Grilled Cheese restaurant in Denver's Uptown neighborhood in the spring of 2003. Now, with two locations and four years of experience, the Wisconsin-themed grilled- cheese joint, with its 35 cheeses, 12 breads and various meats and vegetables, is looking to go national.

Bruley, a Wisconsin native, and business partner Jamie Jalazo are finalizing the approval that would allow Chedd's to franchise in all 50 states.

By franchising, the group hopes to join a long list of homegrown success stories. The International Franchise Association, which assists and advocates for franchisers and franchisees, has 50 Colorado- based members spanning various sectors.

The most successful among them are major players in their industries: Quiznos Sub in Denver has 4,000 sandwich shops around the world; real estate company Re/Max, also from Denver, has more than 6,000 offices in 63 countries; and Centennial-based tire retailer Big O Tires has 540 locations in 21 states and Canada.

READ MORE

According to Chedd's website:

The estimated initial investment for a single location including the franchise fee ranges from $126,500 to $273,500.Royalty Fee: 6% of Gross Sales paid weekly.Advertising Fee: 3% of Gross Sales to be spent on local advertising per month.

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Comments

2 units 4 yrs

Tinker:

I brought the comment(s) back over here where they belong.  In reference to your comment:

However, the people who might fall prey to this silly concept might not be.......but don't let that concern you.

As you previously pointed out the principals have operated 2 locations and  have 4 years of experience in doing so.  It may or may not prove to be as you say a "silly concept" however one thing is certain, they have far more experience than many other franchise opportunities in the market today.

I am neither recommending or FRANWHACKing CHEDD's as a viable franchise opportunity.  In fairness neither can be done without a lot more information.

Believe & Succeed,DaleFranSynergy, Inc.Synergizing Franchising!www.fransynergy.com

2 units 4 yrs

Tinker:

I brought the comment(s) back over here where they belong.  In reference to your comment:

However, the people who might fall prey to this silly concept might not be.......but don't let that concern you.

As you previously pointed out the principals have operated 2 locations and  have 4 years of experience in doing so.  It may or may not prove to be as you say a "silly concept" however one thing is certain, they have far more experience than many other franchise opportunities in the market today.

I am neither recommending or FRANWHACKing CHEDD's as a viable franchise opportunity.  In fairness neither can be done without a lot more information.

Believe & Succeed,DaleFranSynergy, Inc.Synergizing Franchising!www.fransynergy.com

ROYALTY FEE PAYMENTS ARE CRAZY

6% OF GROSS PAID WEEKLY...WEEKLY....I HOPE THEY HAVE THE CASH FLOW

Cash Flow is King!

In business 'Cash Flow' is KING!  You can fool profit, but you can not fool the KING!  A business can survive a long time with little or no profit - but without the KING --- financial disaster lingers around every corner.

With proper pricing and money management principles in place royalties should NEVER be an issue or concern and CASH FLOW should have nothing to do with paying royalties.  The royalty should ALWAYS be builty into your pricing - No Exceptions (see Increase Profits: Stop Paying Royalties) and therefore collected and allocated as part of your daily receipts.

Too many franchisees FAIL TO DO CASH BUDGETS, and without it they DO NOT SEE the peaks and valleys which all businesses must contend with from time to time.  CASH FLOW is the #1 ZEE Killer, for 2 basic reasons.

  1. ZEEs are not realistic in predicting their income and expenses!  They oversetimate income and underestimate expenses.
  2. ZEEs don't see the CASH CRUNCH coming - they fail to prepare for it and as a result RUN OUT OF MONEY!

Most ZORs fail to invest enough time in educating their ZEEs in how to implement proper money management in their business.  ZORs should be teaching ZEEs to do CASH BUDGETs AT LEAST 3-Months out (at FranSynergy we teach subscribers to do 12-Months).

TIPS FOR IMPROVING CASH FLOW

  1. If you don't NEED it - don't buy it!  My grandaddy always said "Use it up, wear it out, make it do, or do without!"  Before you buy it ask yourself - Do I REALLY need it?
  2. Expect the Best - Plan for the Worst!  Always - Always calculate your projected income LOW and your expenses HIGH.  Your cash budget should ALWAYS be the 'Worst Case Scenario', because if you know you can make it through the worst-of-times, you'll have no problems when things go right.
  3. Chase the Money.  If you have 'Accounts Payable' start going after the money THE DAY that the invoice goes into past due.  We teach people how to treat us, and if you teach your customers that it's okay to pay you late - guess what you'll always be the last to be paid.
  4. Current Cash Flow.  Keep your cash budget up-to-date at all times.  You should up date your cash budget AT LEAST once a month - I prefer once a week.
  5. Cut Expenses.  If it's not necessary cut it, if it can be reduced - reduce it.  Saving a little bit here and there each month adds up quickly.  It's true 'a penny saved is a penny earned' but in business a penny saved is closer to 2 penny's earned, because you do not have the expense associated with earning it - so save it.
  6. Don't Pay Late Fees.  Pay your bills on time.  My grandaddy always said "It's expensive to be poor".  One of his examples was paying late fees, he would say "if you can't afford to pay a $100 bill on time and as a result have to pay a $10 late fee - being poor just cost you an extra $10.
  7. Pay Early.  If and when you get a discount for doing so, unless you know your money can earn more during the same time period. 

These are just a few of the many ways one can improve cash flow, and if you focus on these you'll soon discover many more.  Remember, Cash Flow is KING and as the owner of your business managing CASH FLOW should always be your #1 priority. 

Believe & Succeed,DaleFranSynergy, Inc.Synergizing Franchising!www.fransynergy.com

ARE YOU KIDDING

Does anyone even have to look closely at this. Aside from crapola terms, just how long do you think a grilled cheese concept is going to last and be profitable, even if as of today it's the hottest thing since sliced bread (which it isn't)?

Like Cereality, it may be momentarily clever sounding (not clever, just clever sounding), but this is not under any stretch of imagination a concept that is investment worthy, in my other than humble opinion. Sounds cheesy (in the investment sense) to me.

Just the abuse factor of the franchisor being able to rip you off on supplies makes this poisonous.  

The first fraud issue here is the matter of what these poor folks were told by some "franchise consultant" about why this business is franchiseable.

Richard Solomonwww.FranchiseRemedies.com

Cash Flow is King!

In business 'Cash Flow' is KING!  You can fool profit, but you can not fool the KING!  A business can survive a long time with little or no profit - but without the KING --- financial disaster lingers around every corner.

With proper pricing and money management principles in place royalties should NEVER be an issue or concern and CASH FLOW should have nothing to do with paying royalties.  The royalty should ALWAYS be builty into your pricing - No Exceptions (see Increase Profits: Stop Paying Royalties) and therefore collected and allocated as part of your daily receipts.

Too many franchisees FAIL TO DO CASH BUDGETS, and without it they DO NOT SEE the peaks and valleys which all businesses must contend with from time to time.  CASH FLOW is the #1 ZEE Killer, for 2 basic reasons.

  1. ZEEs are not realistic in predicting their income and expenses!  They oversetimate income and underestimate expenses.
  2. ZEEs don't see the CASH CRUNCH coming - they fail to prepare for it and as a result RUN OUT OF MONEY!

Most ZORs fail to invest enough time in educating their ZEEs in how to implement proper money management in their business.  ZORs should be teaching ZEEs to do CASH BUDGETs AT LEAST 3-Months out (at FranSynergy we teach subscribers to do 12-Months).

TIPS FOR IMPROVING CASH FLOW

  1. If you don't NEED it - don't buy it!  My grandaddy always said "Use it up, wear it out, make it do, or do without!"  Before you buy it ask yourself - Do I REALLY need it?
  2. Expect the Best - Plan for the Worst!  Always - Always calculate your projected income LOW and your expenses HIGH.  Your cash budget should ALWAYS be the 'Worst Case Scenario', because if you know you can make it through the worst-of-times, you'll have no problems when things go right.
  3. Chase the Money.  If you have 'Accounts Payable' start going after the money THE DAY that the invoice goes into past due.  We teach people how to treat us, and if you teach your customers that it's okay to pay you late - guess what you'll always be the last to be paid.
  4. Current Cash Flow.  Keep your cash budget up-to-date at all times.  You should up date your cash budget AT LEAST once a month - I prefer once a week.
  5. Cut Expenses.  If it's not necessary cut it, if it can be reduced - reduce it.  Saving a little bit here and there each month adds up quickly.  It's true 'a penny saved is a penny earned' but in business a penny saved is closer to 2 penny's earned, because you do not have the expense associated with earning it - so save it.
  6. Don't Pay Late Fees.  Pay your bills on time.  My grandaddy always said "It's expensive to be poor".  One of his examples was paying late fees, he would say "if you can't afford to pay a $100 bill on time and as a result have to pay a $10 late fee - being poor just cost you an extra $10.
  7. Pay Early.  If and when you get a discount for doing so, unless you know your money can earn more during the same time period. 

These are just a few of the many ways one can improve cash flow, and if you focus on these you'll soon discover many more.  Remember, Cash Flow is KING and as the owner of your business managing CASH FLOW should always be your #1 priority. 

Believe & Succeed,DaleFranSynergy, Inc.Synergizing Franchising!www.fransynergy.com

AGE - Matters!

Richard:

I have not seen the 'terms' offered by CHEDD's.  I assume that you have since you refer to them as "crapola".  So could you share with us the terms you've seen and why you find them to be 'crapola'.

As for 'how long a concept like this will last and be profitable' I guess that will be in direct proportion to the quality of their product, the quality of their marketing, their ability to attract quality ZEEs, their ability to support their ZEEs, the competition that might enter into the market, and a million and one other things.

As one explores their menu, they have a nice variety and allow the customer to create an almost endless variety of sandwhich combinations.  My concern and first reaction in learning about CHEDD's was $6.25 for a 'grilled cheese' sandwhich.  However, a quick look at the menu and you realize that they offer far more than the traditional Kraft Single pan grilled in butter betwen two pieces of wonder bread.  However with a name like CHEDD's Gourmet Grilled Cheese, the question is how many are going to do as I did and imagine "Gourmet = Expensive" Grilled Cheese Sandwhich without ever giving it a try.

Another major question must also be their strategy for controlling the ever rising and fluctuating cost of cheese.

It will be interesting to watch this concept.  It has been said that "Cheese is Milks leap toward immortality".  Will Chedd's reach immortality or just mold?  Only time will tell - but AGE does matter when in comes to good Cheese and franchise opportunities.

Believe & Succeed,DaleFranSynergy, Inc.Synergizing Franchising!www.fransynergy.com

AGE - Matters!

Richard:

I have not seen the 'terms' offered by CHEDD's.  I assume that you have since you refer to them as "crapola".  So could you share with us the terms you've seen and why you find them to be 'crapola'.

As for 'how long a concept like this will last and be profitable' I guess that will be in direct proportion to the quality of their product, the quality of their marketing, their ability to attract quality ZEEs, their ability to support their ZEEs, the competition that might enter into the market, and a million and one other things.

As one explores their menu, they have a nice variety and allow the customer to create an almost endless variety of sandwhich combinations.  My concern and first reaction in learning about CHEDD's was $6.25 for a 'grilled cheese' sandwhich.  However, a quick look at the menu and you realize that they offer far more than the traditional Kraft Single pan grilled in butter betwen two pieces of wonder bread.  However with a name like CHEDD's Gourmet Grilled Cheese, the question is how many are going to do as I did and imagine "Gourmet = Expensive" Grilled Cheese Sandwhich without ever giving it a try.

Another major question must also be their strategy for controlling the ever rising and fluctuating cost of cheese.

It will be interesting to watch this concept.  It has been said that "Cheese is Milks leap toward immortality".  Will Chedd's reach immortality or just mold?  Only time will tell - but AGE does matter when in comes to good Cheese and franchise opportunities.

Believe & Succeed,DaleFranSynergy, Inc.Synergizing Franchising!www.fransynergy.com

The Velveeta Families might buy at $6.25

Hard to tell!

Kids will eat cheese sandwiches, McDonald's and Pizza and the kids usually get to pick out where they want to eat. Eating out is "family recreation" today but will the kids choose Chedds? What else will Chedds offer to make it attractive to families and Mom and Dad at $6.25 a sandwich. I think Quiznos in the pricing of their sandwiches is driving the family business away. When families are paying more for gas, they look for bargains in food. Market forces!

I tend to agree with Richard Solomon on this one.

I agree

Time isn't necessary to figure this one out........common sense is all that is required.  What disturbs me is the nonchalant attitude about putting this out there and allowing time to tell.  For God's sake......................you're talking about promoting this as an investment for people who may not be so damn nonchalant about their 401K, home equity, or life's savings. 

Rhino Super Center

I agree

Time isn't necessary to figure this one out........common sense is all that is required.  What disturbs me is the nonchalant attitude about putting this out there and allowing time to tell.  For God's sake......................you're talking about promoting this as an investment for people who may not be so damn nonchalant about their 401K, home equity, or life's savings. 

Rhino Super Center

I am Chedd's

Hello all,

I have to say that I really appreciate everyone's comments. My name is Jamie and I am one of the partners in Chedd's. I am not here to change anyone's mind in terms of how the feel about our concept, but I would like to point out a few things so you have some extra information.

1. We have been open for over 4 years. Franchising isn't something we did the day we opened our doors. We have slowly created this concept, tweaked it along the way, started to see lines forming for lunch, continue to try new things, opened a second location, worked for nearly two years to put this offering together properly on the front side, and feel that we have surpassed many of the "road bumps" associated with trying something different.

2. We believe in our product. We only use Wisconsin Cheese (one of my partners is from Wisconsin) and we consider ourselves more of a cheese shop that makes grilled cheese than a sandwich shop that makes grilled cheese. This approach has resulted in being recognized by every major media outlet (both in print and on the web), multiple times in some cases, by people in the community and editors. I am also not afraid to point out that not every person has had the greatest experience with us as it is hard to be perfect all of the time, but we continue to improve and overall we get great feedback that we actually take and use.

3. As business partners, our management experience represent different skill sets. We each have been in the business world for many, many years. Although we each love grilled cheese and really love what we do, we have very specialized skills in marketing, operations, customer service and training from other industries. We think the combination of those skills represent an excellent balance of making a successful support structure for everyone who wants to be a part of Chedd's.

We have seen and expect to see certain people (some in this very article) who aren't convinced of what we are doing and to be quite honest, we like it that way. It has been a life rewarding journey for us and we will continue to break the mold (no pun intended for those who get it).

Regards,

Jamie

Greetings Chedd's - I am Pizzaguy

There are some fairly experienced contributors to this site / blog and you will have to go some to convince them.

There will be natural scepticism about a 2 location concept saying that they are going to franchise in 50 states.

Aside from the obvious questions about what the USP is what research is there to support any expectation of success outside of Denver? Can it transcend the current demographic, are their regional taste preferences, how can any benefits be offered such as bulk purchasing ( 2 stores ? ), scale in marketing ( scale in anything ? ).

How would a franchisee in San Francisco and a franchisee in Miami be supported?

Belief is one thing , sustainable ROI is another.

Managed controlled growth in the same city, followed by adjacent cities, then neighbouring states would seem more plausible.

If the current locations are succesful and belief is high why franchise? You can treble in size with normal commercial finance and if those outlets are succesful treble in size again. By then you will have a better idea of what it takes for more widespread success.

You can offer unit managers the opportunity to buy their locations and become franchisees. Alternatively if you are hell bent on franchising so early you can take a serious look at the JVP model which never gets much attention ( Joint Venture Partnership ).

In this model you would have joint ownership and shared risk with the franchisee, it seems more appropriate for an unproven concept.

Who knows, with a JVP model, a franchise agreement written by Richard Solomon and approved by the AAFD you could be the next big thing - but not now - in 2010 

Good Luck

PizzaGuy

MORE NONSENSE

First of all, you are not appreciative of everyone's comments, since just about everyone thinks your franchise is not investment worthy (to put it mildly).

Secondly, every bozo franchisor has the same thing to say about its offering - about how hard they worked and that they have a line at lunch. FORGETABOUTIT.

As if the food business weren't risky enough, the sandwich segment is the toughest. What you describe is not an adequate road test for long term investment.

If there weren't already so many bozo concepts in line for the Fran Whack top ten, you would take the place of Cereality, which I understand is now in total failure (four units selling breakfast cereal using pajama clad waiters and waitresses).

Whoever sold you on franchising your cheese sanswich business ought to be an immediate defendant in your first lawsuit. But don't take my word for it.  Lets all wait until you find some poor suckers to fleece and they all fail in the first two years and the lot of you can charter a bus and go to bankruptcy court together.

Richard Solomonwww.FranchiseRemedies.com

Jamie/Chedd's Welcome

Jamie:

Welcome to Bluemaumau and for sharing a little more information with us about CHEDD's.  Simply by taking the time, having the intestinal fortitude, and the interest in doing so -- has set you apart from many other franchisors, in my opinion.

I introduced CHEDD's to Bluemaumau as an interesting new concept - please do not hold that against me.  It was not my intent for the concept to be -slammed or FranWhacked - perhaps I should have anticipated such a reaction, but again it was not my intent.

I found it very interesting that you're positioning CHEED's as a Cheese Shop that sells Grilled Cheese Sandwiches, as opposed to a sandwhich shop that makes Grilled Cheese.  To me that is a very important distinction which was not adequately communicated in the original Denver Post Article and that opens up many potential avenues for profit.  As I'm sure your market research has shown many of the 'Wine Franchises' retail wine and sell food and beverage'.  Because they sell wine by the glass in the restaurant portion of the shop they always have open bottles which allow people to try new wines before buying bottles of wine to take home.  I can see how someone who experiences a new cheese on a sandwhich might choose to take some home with them.

You have an interesting concept.  Franchising can be a tough business and Bluemaumau can be a 'tough' place.  Franchising can be very rewarding for both franchisor and franchisee - when done right!  Bluemaumau can be a great place for both franchisors and franchisees to learn about franchising and more importantly gain an insight from the perspectives of the other and the mistakes made by others.  I'd encourage you to give consideration to those questions, which are worthy of consideration that have been and will be raised.  Do not allow them to discourage you, but rather help prepare you for success.  In sales it's important to see things from the perspecitve of your customer, in franchising it's important that both franchisee and franchisor have the ability to see things from the others perspective.  Bluemaumau can provide you with great insight - quickly.

The suggestions by PizzaGuy regarding MANAGED CONTROLLED GROWTH is something I think you should give real consideration.  Often the best compromise is, single unit sales expanding outward from a central point as described by PizzaGuy; and distant sales limited to multi-unit ZEEs who have the financial and human resources to quickly open 5+ units in a specific region.

Those first 20 franchise sales will be the hardest - they'll also lay the foundation for your future success.  Commit now to doing more to help them succeed than they'll do themselves to succeed.  If you know you have the right business model, you'll take comfort in knowing that many great businesses have been accomplished while others stood around saying it could not be done.  Good luck - and keep us posted.

Believe & Succeed,DaleFranSynergy, Inc.Synergizing Franchising!www.fransynergy.com

Not cheesy

Jamie, congrats and best wishes for success.

As one of the people who is not convinced, I do appreciate your willingness to consider differing points of view. That ability to listen and respond in a civil and logical manner puts you miles ahead of most franchisors.

Greetings Chedd's - I am Pizzaguy

There are some fairly experienced contributors to this site / blog and you will have to go some to convince them.

There will be natural scepticism about a 2 location concept saying that they are going to franchise in 50 states.

Aside from the obvious questions about what the USP is what research is there to support any expectation of success outside of Denver? Can it transcend the current demographic, are their regional taste preferences, how can any benefits be offered such as bulk purchasing ( 2 stores ? ), scale in marketing ( scale in anything ? ).

How would a franchisee in San Francisco and a franchisee in Miami be supported?

Belief is one thing , sustainable ROI is another.

Managed controlled growth in the same city, followed by adjacent cities, then neighbouring states would seem more plausible.

If the current locations are succesful and belief is high why franchise? You can treble in size with normal commercial finance and if those outlets are succesful treble in size again. By then you will have a better idea of what it takes for more widespread success.

You can offer unit managers the opportunity to buy their locations and become franchisees. Alternatively if you are hell bent on franchising so early you can take a serious look at the JVP model which never gets much attention ( Joint Venture Partnership ).

In this model you would have joint ownership and shared risk with the franchisee, it seems more appropriate for an unproven concept.

Who knows, with a JVP model, a franchise agreement written by Richard Solomon and approved by the AAFD you could be the next big thing - but not now - in 2010 

Good Luck

PizzaGuy

Jamie/Chedd's Welcome

Jamie:

Welcome to Bluemaumau and for sharing a little more information with us about CHEDD's.  Simply by taking the time, having the intestinal fortitude, and the interest in doing so -- has set you apart from many other franchisors, in my opinion.

I introduced CHEDD's to Bluemaumau as an interesting new concept - please do not hold that against me.  It was not my intent for the concept to be -slammed or FranWhacked - perhaps I should have anticipated such a reaction, but again it was not my intent.

I found it very interesting that you're positioning CHEED's as a Cheese Shop that sells Grilled Cheese Sandwiches, as opposed to a sandwhich shop that makes Grilled Cheese.  To me that is a very important distinction which was not adequately communicated in the original Denver Post Article and that opens up many potential avenues for profit.  As I'm sure your market research has shown many of the 'Wine Franchises' retail wine and sell food and beverage'.  Because they sell wine by the glass in the restaurant portion of the shop they always have open bottles which allow people to try new wines before buying bottles of wine to take home.  I can see how someone who experiences a new cheese on a sandwhich might choose to take some home with them.

You have an interesting concept.  Franchising can be a tough business and Bluemaumau can be a 'tough' place.  Franchising can be very rewarding for both franchisor and franchisee - when done right!  Bluemaumau can be a great place for both franchisors and franchisees to learn about franchising and more importantly gain an insight from the perspectives of the other and the mistakes made by others.  I'd encourage you to give consideration to those questions, which are worthy of consideration that have been and will be raised.  Do not allow them to discourage you, but rather help prepare you for success.  In sales it's important to see things from the perspecitve of your customer, in franchising it's important that both franchisee and franchisor have the ability to see things from the others perspective.  Bluemaumau can provide you with great insight - quickly.

The suggestions by PizzaGuy regarding MANAGED CONTROLLED GROWTH is something I think you should give real consideration.  Often the best compromise is, single unit sales expanding outward from a central point as described by PizzaGuy; and distant sales limited to multi-unit ZEEs who have the financial and human resources to quickly open 5+ units in a specific region.

Those first 20 franchise sales will be the hardest - they'll also lay the foundation for your future success.  Commit now to doing more to help them succeed than they'll do themselves to succeed.  If you know you have the right business model, you'll take comfort in knowing that many great businesses have been accomplished while others stood around saying it could not be done.  Good luck - and keep us posted.

Believe & Succeed,DaleFranSynergy, Inc.Synergizing Franchising!www.fransynergy.com