Oberweis branches out with first franchises |
|
Oberweis Dairy scooped up three franchisees Monday -- the first moves in the ice cream company's plan to expand nationally.
North Aurora-based Oberweis will get nine new locations under the deals, which are the first franchise agreements in the history of the privately held company. The stores will open starting in April, with each franchisee opening three. Executives at the dairy expect the new arrangements to give the company broader reach. While Oberweis currently owns 33 "Ice Cream and Dairy" stores, its plans call for 500 new stores over the next five years.
"It obviously allows us to grow faster," said Joe Oberweis, 24, president of Oberweis Franchise Systems. "Franchising is a lot more than just a financing tool, but at its core level, that is something that it accomplishes."
Oberweis started as a local dairy business in 1915. Family scion and dairy Chairman Jim Oberweis made an unsuccessful run for the Republican U.S. Senate nomination earlier this year. In August, the company unveiled its plan to franchise, enabling others to open Oberweis stores not owned by the company.
Franchisees will pay Oberweis an initial fee of $30,000, Joe Oberweis said. The initiation fee will rise to $40,000 in January. In addition, store owners will pay a royalty of 1 percent of sales up to $750,000. Franchisees will pay 17 percent of sales above $750,000. The store owners also will be expected to contribute to an advertising fund. The initial cost of opening a store will range from $500,000 to $750,000.
While the franchisees will own the restaurant and equipment, Oberweis Dairy will control what gets served and where the stores are located.
"We're looking for the right population, the right demographic," Oberweis said. "Frankly a big part of it is having a large number of families around."
The nine franchises will be located in Mundelein ; Vernon Hills; Lake in the Hills or Algonquin; DeKalb; St. Charles or Geneva ; Janesville , Wis. ; Fishers, Ind. ; Carmel , Ind. , and Noblesville , Ind.
