Farm Stores prepares for explosive growth with its efficient, low-cost franchise model
of drive-thru ‘convenient’ stores.
By Janice Hoppe-Spiers
Catering to consumers with busy lifestyles and families always on the go, Farm Stores prides itself on being the convenient last stop store on the way home. A hybrid grocery store, bakery and restaurant with a double drive-thru makes Farm Stores concept one-of-a-kind.
“We are really the only concept of its kind, which is a double drive-thru convenient store,” CEO Maurice Bared says. “I say ‘convenient’ rather than a ‘convenience store,’ which tends to be a boxed in definition and we are the opposite. We cater primarily to moms and families for food items they need for home and offer a high level of freshness. Almost everything we do is made just-in-time and we designed our concept to revolve around that. Our main staple is hot, freshly baked bread, for example.”
Farm Stores was founded in Miami in 1935 as Land O’ Suns Dairies Inc. and produced milk, ice cream and butter under the brand. In 1957, the company created its drive-thru stores to deliver fresh dairy products directly to the consumer. By the late 1960s, Farm Stores had become recognized as the premier convenient store for quality dairy products and groceries in Florida. Today, it is the oldest and largest drive-thru convenient store in the United States.
“Bakery, dairy and grocery items are what we focus on and anything mom needs,” Bared says. “We have fresh hot soups you can enjoy and also offer 32-ounce soups to take home. Mom can drive up and get hot, fresh baked bread and 32-ounce lobster bisque for dinner for her family. We have expanded into immediate consumables, but I would say about 60 percent of the business is still take home.”
In 2004, Farm Stores converted many of its company-operated stores to retail-dealer stores that operated under license agreements, but about three years ago the company converted into a franchisor. “Right now, we have over 25 franchised stores operating and over 30 dealer locations throughout the state of Florida, but the dealers are being converted to franchises,” Bared says. “It’s a gradual process as old contracts begin to expire.”
Farm Stores is rapidly expanding throughout the country. In addition to its locations in Florida, the company is breaking ground this year on a 50-store development contract in Houston and a single unit in Lafayette, La. A 50-unit contract was recently signed for Connecticut to go alongside a previous 50-unit deal in New York’s Hudson Valley. This summer, the company will be breaking ground on a 100-store development contract in New Jersey.
“Some of our stores have been in continuous operation for 60 years, and many for 40 years,” Bared says. “We are the foremost experts in ‘convenient’ double drive-thru retailing, and we are now teaching others how to do it through franchising.”
Farm Stores developed a prefabrication building process, repurposing shipping containers for its stores, which is not only a greener construction method but also increases efficiency and reduces development time dramatically, Bared says. “This green concept has lowered our development cost 40 percent, which decreases the monthly cost for the franchisee,” he explains. “We also designed a development model similar to car leasing because it’s sometimes difficult for franchisees to get financing. So we do the work for them and their initial investment is reduced radically.”
Farm Stores purchases the land, builds the store and ships the building to the site and then sells the franchise. “We sell brand new, fully equipped stores from $50,000 to $150,000 all in,” Bared says. “Franchisees get a brand new location that’s turnkey delivered to them and it’s done at a low rent rate because of our buying power so they don’t have to focus on development and can focus on the operation of the business.”
The company’s business model works best in suburban areas as it mostly appeals to busy families. About 80 percent of Farm Stores’ customers are repeat customers, returning to the store at least once weekly.
To accelerate its expansion, Farm Stores is looking at a $50 million real estate development fund to focus on new stores in the Northeast and in Texas. “We have 380 stores under development over the next six years and my goal is 1,000 stores under development contract within the next 24 months,” Bared says. “That’s the purpose of the real estate development fund: to continue to attract development investors and speed up growth.”
Bared consulted with Subway founder Fred DeLuca to develop Farm Stores’ franchise model. Area representatives provide comprehensive on-site training leading up to the grand opening and ongoing support, including ensuring each store is neighborhood-centric and set up for success.
The secret to Farm Stores’ success is catering to the neighborhoods in which they are located. “Each neighborhood dictates how the store is merchandised,” Bared says. “Eighty percent of the merchandise is common items like milk, bread and other fresh products that we know will sell in every store and state. The remaining 20 percent is localized items. For example, we sell a tremendous amount of ceviche in south Florida, but we wouldn’t sell it in Katy, Texas. That’s the advantage of the model and allows franchisees to feel entrepreneurial.”
Farm Stores equips its franchise locations with a cloud-based POS system. The company is also rolling out its app so customers can order from the drive-thru or at home and speed up the process. The app also allows customers to take a deeper look inside the store’s menu of products, something not so easily done from the car.
The company is also quickly expanding its delivery services, partnering with UberEats, Postmates, Grubhub and Delivery Dudes. “UberEats contacted us because they realized it is the most efficient delivery mechanism for them – they can drive up to the store and we go out to the car,” Bared notes. “As customers’ needs continue to evolve, Farm Stores will evolve with them. Our model is built around convenience, quality and service, not a locked down product that may go out of fashion.”
The Perfect Fit
Farm Stores ideal franchise owner is someone who has a desire to bring good, old-fashioned customer service to their community and own multiple locations. “It’s people who are very capable of operating these types of businesses and may not have the wherewithal to come up with $500,000 in investment,” Bared says. “With our new development model, more than 85 percent of franchisees now own multiple locations. They can have two or three stores in close proximity and that takes them out of the traditional employee wage to a well compensated business owner.”
Franchisees are capped at owning three stores per person or six per family. “That’s an unwritten rule, but what I’m trying to do is ensure maximum efficiency for each family member,” Bared explains. “You don’t want to spread them thin and we teach them how to develop the store and create different vehicles to grow their personal wealth. In terms of operations, I’m very picky about it and don’t want their returns diminished. For a family to make $250,000 a year out of a low-cost and simple operation, it can change their life.”