Monday, August 18, 2008

Global Madness & Chocolate Chips

What the heck is going on in the world? Russia has completely lost it and invaded Georgia. Pakistan's President resigned before he could be impeached. And Mrs. Fields Cookies is filing for Chapter 11. When will the madness end?

Apparently we shouldn't be surprised about Mrs. Fields. The chain has been losing money for years. Too much debt. The interest payments were killing them. Of course, those of you who would like to start a franchise apparently can still do so:

Below is an itemized list of costs associated with establishing a franchise with Mrs. Fields Famous Brands:

Initial Franchise Fee:
$30,000*

Ongoing Royalties:
6% of Gross Sales

Advertising Fee:
1-3% of Gross Sales

Initial Training Fee:
No charge for first two individuals

Initial Term of Agreement:
7 years (7 year renewal)

Total Estimated Initial Investment:
$179,900-$252,100**

*For full service store.**A complete inventory of associated cost is disclosed in item 7 of the Uniform Franchise Offering Circular. These figures do not include real estate lease costs, and may vary with actual circumstances.

Call me crazy, but I think there may be better ways to make dough. (bwah, ha, ha!)

I think this may be a story of a company getting away from what made it successful. Great cookies and amazing service fell by the wayside as empire building took over. The company bought TCBY, a couple of pretzel companies it has since unloaded, and strayed from its core values. I also think there may have been a lack of trend spotting. As a yogurt lover, I know that TCBY has been slipping for years. The ice cream companies jumped on the yogurt bandwagon and scooped (I can't help it) up any advantage TCBY might have had. Hey, if the whole family can get what they want at Baskin Robbins, why go to TCBY? Who was asleep at the TCBY wheel? That dog hasn't been hunting for years.

Lessons?

Need we revisit chocolate Pez? Know what you're good at and make the most of it. Was Mrs. Fields good at making cookies or good at running food stalls in the mall? I think someone got confused.

Bigger isn't always better. I bet the company would now rather have just 50 successful cookie stores than 500 cookie stores, 50 TCBY stores, etc. Little and profitable is better than huge and in debt. You might keep that in mind when manging your own finances.

Final lesson? Don't trust the Russians.

2 comments:

Heidi said...

You are one smart COOKIE.

HA HA HA HA HA!!!
(Maniacal laughter)

I couldn't help it, either!!!!

KiddoKare1 said...

Oh man, I loved TCBY when I was younger. I remember when they first became so popular. I haven't seen one of those stores in years. I didn't even know they were still around. I loved all your little puns. Very "punny". LOL.
Tracy