Field Notes: Edible Arrangement Franchise

Evaluating Two Top-Performing Edible Arrangement Franchises For Sale in Florida

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These two Edible Arrangement franchises represent a compelling investment with a proven business model that have robust cash flows and significant market presence. The asking price seems justified by the business’s financial health and the strategic advantages of its locations. However, potential acquisition entrepreneurs need to conduct a thorough due diligence to understand the dynamics of franchise operations, including an analysis of franchise fees, contractual obligations, and any restrictions on resale by the franchisor (read the rest of this post for a well-known hack on obtaining the FDD). The operational track record and the seller’s offer of financing and training make the opportunity particularly attractive. (Also read: Should Acquisition Entrepreneurs Buy an Existing Franchise?)

TLDR:

• The asking price for the two Edible Arrangements franchises in Orlando and Jacksonville is $1,900,000. This price is 3.5 times the Seller’s Discretionary Earnings (SDE) of $546,000, considered a reasonable multiple for a high-performing franchise in retail.

• Both franchises demonstrate strong performance, with the Orlando location ranked as the #1 Edible Arrangements franchise in the US, and the Jacksonville location consistently ranked in the top 10.

• Financially, the franchises show stability and predictability of earnings, contributing to their valuation.

• The franchises benefit from a strong online presence, with 90% of sales generated online. They also boast strategic locations in high-traffic areas, further enhancing their visibility and customer accessibility. Customer loyalty is high, evidenced by a 40% repeat purchase rate.

CLOSER LOOK:

Let’s take a an in-depth look at some of the finer points from the listing:

Financial Overview

• Asking Price: $1,900,000
• Gross Revenue: $1,630,000
• Cash Flow (SDE): $546,000

Business Operations

• Established: 2001
• Locations: Orlando, FL and Jacksonville, FL
• Industry: Franchise, Edible gift baskets and treats
• Sales Breakdown: 90% online, 10% in-store
• Employees: 20 across both locations

Analysis

Valuation and Price Justification:

• The asking price is approximately 3.5 times the Seller’s Discretionary Earnings (SDE), which seems reasonable multiple for a high-performing franchise in the retail sector.
• The stability and predictability of earnings, combined with the strong brand presence of Edible Arrangements, contribute to the business’s valuation.

Strengths:

• High-performing franchises within a well-known brand, with Orlando location being #1 in the US.
• Strong repeat business due to brand loyalty and a high customer satisfaction rate, supported by a 40% repeat purchase rate.
• Strategically located in high-traffic areas, enhancing customer accessibility and visibility.

Risks and Considerations:

• Dependency on franchise corporate policies and marketing, limiting some aspects of autonomous business decisions. In addition, the franchisor may have additional requirements for resale.
• The need for continual investment in marketing and potentially increasing local marketing efforts to sustain growth.
• Competition in a bustling market like Orlando, particularly given its status as a hub for tourists and events.

Opportunities for Growth:

• Introducing more aggressive local marketing initiatives, such as partnerships with local businesses, schools, and community events, could drive additional sales.
• Enhancing in-store experiences to increase foot traffic and complement the strong online sales.

Market and Location:

• The Orlando store’s proximity to Disney and high-volume tourist areas presents unique opportunities for themed promotions and partnerships.
• Jacksonville’s consistent performance as a top 10 franchise indicates strong market penetration and customer demand in its region.

One thing you should do is take a look at the Franchise Disclosure Document (FDD), particularly to assess any restrictions the franchisor may have on reselling an existing franchise. It’s a well-known hack that you can obtain the latest FDD for most franchises by searching for it on Wisconsin’s Department of Financial Institutions.

What do you think? Check it out and let me know!

About: Silverwave Field Notes combs through and analyzes thousands of businesses available for sale that may be of interest to entrepreneurs looking to acquire an existing business. We are not affiliated with the business listed for sale unless otherwise disclosed.