STEPPING OUT

$1 million a year
selling flip-flops? Yes!

SBA’s FRANCHISE REGISTRY EXPEDITES LOAN PROCESS

The Franchise Registry (www.franchiseregistry.com) is a national online listing of approved franchise systems, like Flip Flop Shops, whose franchisees receive expedited loan processing when applying for financial assistance from the U.S. Small Business Administration (SBA). By centralizing the review process, the Franchise Registry allows the SBA to make consistent eligibility decisions regarding franchise systems, to cut red tape in the system, and to speed access to SBA financial assistance. Small business owners get better service and quicker loans.

Looking for a fun, seemingly recession-proof business to run that you can start with no experience, and receive guidance as you go? Consider opening your own Flip Flop Shop. The franchisor, Flip Flop Shops, will help you be in business for yourself, but not by yourself. People love flip-flops and the business is poised to boom.

While the economic climate throughout the past couple of years has left an increasing number of small businesses challenged, forcing some to pull the plug on growth and expansion all together, Flip Flop Shops, the nation’s first retail chain exclusive to flip flops and sandals, has defied the odds and grown its network of franchises at a record pace.

When the same group of major players who helped build such household brand names as Cold Stone Creamery and Moe’s Southwest Grill “joined toes” to franchise the concept, industry “experts” didn’t give them much of a chance, if any at all. But today, nearly two years later, and with the support of such partners as professional surfer Erica Hosseini and CEO Chris Zimmerman of the Vancouver Canucks, Flip Flop Shops has:

• accepted nearly 5,000 franchise applications
• generated more than $1 million in franchise fees
• grown the concept to 11 shops nationwide, with 30 more in the pipeline

The company’s mission is to provide the opportunity for anyone, in any climate, to “live, work and play with their toes exposed” while wearing the freedom of flip-flops on their feet. Once reserved only for poolside or beachwear, flip-flops have grown to become the “global youth uniform,” as well as accepted footwear for anyone ranging from surfers to high-level corporate executives. In fact, flip-flop sales exceeded those of athletic shoes for the first time in 2006, and flip-flop fever has continued to build momentum ever since.
Company plans call for more than doubling its presence throughout the United States and Canada in 2010 and having more than 200 shops by 2013.

The website tells the story of how “Todd grew up in Boston and was a business guy. He opened a tuxedo rental place...not cool, then a dry cleaner...cool if you need your clothes dry cleaned, I guess? Then he got hungry and opened a pasta joint...lots of carbs for Todd back in the day. Todd got smart and decided he was so good at opening, running and selling successful businesses that he should start his own deal to help others...very nice of Todd. The Gates Group was born! Then, this cool chick named Sarah, who also grew up in Boston and graduated from Boston College, meets Todd, Todd hires Sarah, Todd and Sarah consult with a bunch of franchise companies on franchise development and recruitment” and so on and so on and we invite you to visit www.flipflopshops.com to learn the entire saga.

Today, Flip Flop Shops is the authentic retailer of the hottest brands and latest styles of flip-flops and the first-ever franchise of its kind. Brands sold in the shops include O’Neill, Roxy, Volcom, Locals, Holeys, Hurley and Flojos.

The Investment
The total project costs to open and operate a single shop can be between $165,000 and $185,000, including $25,000 that must be paid to the franchisor as an initial franchise fee. (As of April 1, 2010, the franchise fee will be $28,000.) This investment will vary depending upon what type of venue you choose for your location, i.e. mall or lifestyle center. The amount will be substantially more if you are considering more than one shop, such as a franchise development agreement.

Single and subsequent single shop agreements in the United States: The initial fee for a single shop in the United States is $25,000 ($28,000 as of April 1, 2010). The weekly royalty is five percent (5%) of gross sales, which is paid weekly. In addition, one half of one percent (0.5%) of gross sales is contributed to the Brand Building & Marketing Support Fund on a weekly basis (see below).

Development agreement within or outside the United States: This agreement provides the ability for franchisees to commit to opening and operating multiple shops. We are interested in growing both internationally and domestically through development agreements with the right people.
What Is The Brand Building & Marketing Support Fund?

This fund provides franchisees with professional visual merchandising and local marketing materials. Fees contributed to the Brand Building & Marketing Support Fund are paid weekly and are currently one half of one percent (0.5%) of gross sales.

The company provides a franchise support system designed to support all of your business needs. Flip Flop Shops is committed to providing a superior level of service.

“With over 50 years of franchise experience, we have taken the best practices and applied them to Flip Flop Shops. More importantly, we have eliminated common mistakes made by most franchise systems. For more information, visit www.flipflopshops.com. The phone number for the Kennesaw, GA, headquarters is 770/424-0027. •