Edible Arrangements Proliferates

All but two are franchised units, and Farid anticipates 150 more by the end of this year. Reach and scope matter when the product is perishable. While the company now operates a website and 800-number call center directing leads to stores, the stores can only sell within a very limited local radius. "The exact radius varies a little from market to market, depending on (automobile) traffic and climate," he says. "These aren't flowers; they must arrive fresh." On average, 75% or more of a unit's sales are delivery, although all units display product and encourage pick-up and impulse buys.

Farid came from the florist business and also ran a computer company. He knows that building the brand calls for a large national presence and is equally aware of the marketing benefits that come from major geographic expansion. The current stores are located from Connecticut to California with five in Canada. "Our strategy is to double the number of units every year over the next four years," he says.

The franchise cost ranges from $110,000 to $170,000, depending on size and location. Franchisees spend two full weeks in training at headquarters, learning not only how to create the fruit arrangements, but also how to master the company's proprietary computer system, which is at the heart of its operation.

Franchisees use the system to ensure that their early a.m. daily orders from vendors are both fresh and lean. "We have very little waste from spoilage," Farid says, "and we've simplified the system so franchisees can master it easily." Following headquarters' training, a company franchisee trainer works with franchisees at their own location for a week, and trainers are always on call.

The ideal Edible Arrangements' location is a strip mall with heavy traffic, near a supermarket, health food related retailer, or another franchise unit, such as a Subway or Quiznos, according to Farid. Typically, units range from 1,000 sf to 1,500 sf. Site selection may start with a franchisee, but all locations are visited and approved by management, which also negotiates lease terms.

Design of the units is "very standard," says Kristy Ferguson, VP of marketing. "We want all of them to have a unified look and feel. In addition, we provide layout drawings for the retail area, the computer system and make sure that all units meet the certification requirements of local health departments." The requirements are "not as elaborate as those needed by a restaurant, because we don't handle meat or fish," she adds.

There are 12 standard edible arrangements available at all times in stores, and they span a price spectrum from about $30 to over $100. "Customers can complement the standard arrangements," Farid says, "and every six months we introduced a new product (replacing an existing one)." Stores also offer a variety of edible gift items, such as chocolate-dipped strawberries, and everything is made on each store's premises.

Franchisees are encouraged to cultivate business-to-business clients in addition to walk-in traffic. Ferguson provides them with a wealth of promotional tools, including brochures, flyers and ad copy. "The emphasis is on getting noticed," she says.

As awareness of Edible Arrangements grows, so does the concept. "A lot of Mom and Pop competitors are cropping up," Farid says. The closest multi-unit competitor is Pennsylvania-based Incredibly Edible Delites, which opened in 1984 and, according to its website, now has approximately 40 stores.

Both praise and criticism of Edible Arrangements' growth plan emerged among members of a panel of analysts assembled by Inc. magazine. All three panelists agreed with the analyst of a California private equity investment firm, who said, "The product clearly has consumer appeal." All also agreed that rapid-fire expansion and a broad market are critical to raising awareness of both the concept and the brand.

A food and beverage analyst added, "They really need to figure out a way to tell consumers that their product is a better alternative than flowers," suggesting that demand could be confined to a limited niche.