Pumpernickel’s is Spreading its Franchising Wings

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Shlomo (Soly) and Zvia Ziv were well ahead of the freshness trend when they opened their first Pumpernickels at Toronto’s First Canadian Place in 1986. “They have always taken pride in everything being fresh and made from scratch in-store,” says Joel Friedman, franchise consultant with Pumpernickel’s.

It was the veal sandwich that put Pumpernickel’s on the map, but the owners have since expanded the menu considerably, ranging from Asian-inspired combinations to recently introduced slow-cooked roast beef.

They have also grown the brand’s footprint to 13 stores within the Greater Toronto Area. For the first few years, additions were corporate stores; with the first franchise opening in 1995. To date, there are six corporate stores and seven franchises.

Most locations are strategically located in Toronto’s underground office towers, with a small handful of street fronts with office components. A huge part of the brand’s business is catering, which can account for 40 to 70 per cent of its revenue.

After 20 years of steady growth in the GTA, Pumpernickel’s is now ready to expand its franchising efforts in earnest, Friedman reports. In order to make the move beyond the GTA, he says branding needed to be nailed down. “We have been working for the past four years on rebranding our current locations and were waiting for that to finish before going out and franchising actively.” The brand has recently updated its operational manuals to ensure consistency across all the locations, as well as upgraded its systems for
deliveries and catering-order processing.

For a franchise fee of $35,000, Pumpernickel’s franchisees receive a 6.5 per cent royalty, plus two per cent for brand development, along with six to eight weeks of training and two weeks of in-store support. “There’s nothing unusual in the terms, but we do give territories based on postal codes for catering and delivery orders to avoid any confusion,” Friedman explains. The franchise agreement is for 10 years, but can be renewed for 10 additional years.

Until now, Pumpernickel’s has worked solely with independent franchisees, but that will change as it strikes out to other regions, Friedman says. “Going forward, we would look for multi-unit franchisees to get the economies of scale and skills needed to be in markets outside of Ontario.”

He adds the company is exploring opportunities in Ottawa, Calgary, Vancouver, Quebec and Halifax.

As part of the plan, the company joined the Canadian Franchise Association — a move that has accelerated requests exponentially, he says. “I received about 50 enquiries last month and we’re working with five of them. We’re getting a lot of interest from investors and operators looking for a fresh and healthy product.”

Volume 49, Number 11
Written By Denise Deveau 

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