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Case study · Auntie Anne’s

How Auntie Anne’s grew from a $250-a-month farmers market stand to 1,200 locations

TL;DR

Anne Beiler rented a 12 by 20 foot pretzel stand in a Downingtown, Pennsylvania farmers market for $250 a month in 1988, equipped with $6,000 borrowed from her in-laws. Franchising began in early 1989 and the first mall store opened that November. The lesson: franchise a simple product from small, cheap locations and let the system grow.

How it started

Anne Beiler and her husband Jonas opened the pretzel stand in 1988. According to Encyclopedia.com, she rented a 12 by 20 foot space in a Downingtown, Pennsylvania farmers market for $250 a month. She borrowed $6,000 from her in-laws to buy equipment, and the stand opened in February 1988.

Sales were slow at first, about $350 a weekend. The recipe was based on a friend’s, and early results were not strong. The stand became Auntie Anne’s, a name that fit her many nieces and nephews.

How they got the first customers

The first customers were shoppers at the farmers market. The stand sold a fresh, freshly baked product to people already out shopping.

In July 1988 Beiler raised $5,000 more to open a second stand in Harrisburg. The first seven stores were all in farmers markets, which kept rent low while she improved the product and the system.

What drove growth

Franchising began in early 1989. The first franchise went to her brother, Jake Smucker, in Middletown, Pennsylvania. The company had eight stores in 1989, and the first mall location opened in November 1989.

According to Encyclopedia.com, there were about 90 stores in 1991, 279 in 1994, 408 in 1996 and 558 in 1998, when the company accepted 10 of 6,000 franchise applications. The first international store opened in Jakarta in 1995. System revenues passed $100 million in 1995.

Focus Brands, now GoTo Foods and a portfolio company of Roark Capital, acquired the company in 2010. Wikipedia reports more than 1,200 locations as of August 2023, including more than 600 international.

Lessons you can copy

  1. 1Start small and cheapA rented stall and a few appliances cost thousands rather than hundreds of thousands. Low risk let her learn before expanding.
  2. 2Open a second location once the first worksThe Harrisburg stand opened five months after the first. Repeating your model in a nearby market shows whether it travels.
  3. 3Franchise the system, not just the productBeiler’s first franchisee was a family member. Documenting and teaching the process is what makes a franchise possible.
  4. 4Follow the foot trafficFarmers markets led to malls, airports and train terminals. A grab-and-go snack belongs where people are already moving.
  5. 5Be selective with franchiseesIn 1998 the company accepted 10 of 6,000 applications. Quality control protects the brand.

Frequently asked questions

How did Auntie Anne’s start?

Anne Beiler rented a pretzel stand in a Downingtown, Pennsylvania farmers market in 1988, using $6,000 borrowed from her in-laws for equipment.

When did Auntie Anne’s start franchising?

Franchising began in early 1989, when Beiler licensed the first franchise to her brother in Middletown, Pennsylvania.

Who owns Auntie Anne’s now?

Focus Brands, now GoTo Foods, acquired it in November 2010. GoTo Foods is a portfolio company of Roark Capital.

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