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Great Harvest: Rising to the Top [Business Life magazine]

by Hope Katz Gibbs
Business Life magazine
July 1998

It’s 6 a.m. at the Great Harvest Bread Company on Grandview Avenue in Greensboro. While most sane people are sound asleep, Dan Farley is wide-awake and elbow-deep in a ball of dough.

He and Jason Marshall, a loyal employee and early riser, have been milling 60 pound bushels of whole wheat into flour since 5: 10 a.m. By 6 o’clock, the two are likely to be mixing up a few hundred loaves of whole wheat bread as they jam to Led Zeppelin.

This is a morning ritual to Farley, the baker/businessman who opened the neighborhood bread store on April 5, 1995.

Before becoming a baker, he worked as a waiter at the Gate City Chop House in Greensboro. It was good, steady work, but Farley longed to own a business of his own. Then he started dating his childhood friend Mary Kate Brady. For years, it had been a goal of hers to open a Great Harvest Bread Company, a national franchise that treats owners more like entrepreneurs than employees.

She hadn’t been able to buy a franchise on her own, though, because Great Harvest rarely sells to single people. But when Mary Kate and Dan married in 1994, they put in an application and began rounding up the $24,000 seed money.

In August 1994 they got their acceptance letter. Then the hard work began. The Farleys had to gather more dough (on average, it costs about $180,000 to get a Great Harvest Bread Company up and running. They then embarked on the even more difficult task of finding a location for the breaderie.

“It took nine months to find a location,” says Dan, now 36. “We looked everywhere in Greensboro, but nothing seemed perfect.” Finally, they found a spot at Friendly Center, where the shop is currently located. “It is working out just fine,” says Mary Kate, 31.

It seems as if the store is doing better than fine, actually. The Farleys sell between 350 and 500 loaves per day of the eight types of bread baked fresh on the premises. The biggest seller is the honey whole wheat, which runs $2.95, plus tax. Other popular flavors include nine grain ($3.75), Dakota whole wheat ($3.95), and golden cheddar garlic ($4.95). Every Friday Great Harvest bakes a Challah ($3.75).

In early March, Dan mastered the store’s first hard-crusted bread and now sells the French-style loaf for $2.50. During the holidays, they bake up hundreds of loaves of Stollen bread—a preservative-free, healthy, fruitcake loaf with lemon icing ($6.75). The Farleys also bake a few varieties of cookies, and recently added to the repertoire the “breakfast bubba“—a whole-wheat bun with cinnamon and butter and raisins.

“It’s like a healthy jelly donut,” says Dan.

Like all the other stores in the Great Harvest franchising company, the Farleys consider themselves part of the community. And, they like to reach out. For example, on opening day in April 1995, they invited Father Mark Lamprich and Rabbi Elle, Havivi to come in to bless the store. Rabbi Havivi kosher-certified the bakery. And, Mayor Carolyn Allen was on hand to help with the ribbon cutting ceremony.

The Farleys have also reached out to community members in need, such as the nonprofit organization the Delancey Street Movers, which helps people, overcome drug and alcohol addiction. Every six weeks, the movers haul 200 60-pound bags of wheat up the stairs to the mill room. And every week, the Farleys donate bread to local churches, who use the bread for communion, and to other nonprofits such as the Women’s Only Race, which raises money for a cure for breast cancer, and Triad Health Project which raises money for AIDS patients.

Doing good by your community is just good business, the Farleys say.

“Our store has a very relaxed atmosphere, and that’s what the customers want,” says Dan. “They have plenty of pressure and responsibilities to deal with in their lives. We want our bakery to be a respite—a nice, clean place to come in and have something to eat. We want a trip to Great Harvest to be fun.”

MADE FROM SCRATCH

Having fun and being loose is quite literally the mission statement crafted by Great Harvest founders Pete and Laura Wakeman. That philosophy has made the franchise, based in Dillon, Montana, and a national success story. With annual revenues of about $60
million, average gross sales for each franchise owner are around $550,000.

Not bad for a company that started out as a roadside stand with a sandwich board which read, “Hot Bread, Free Slices.” That was 1972, when the Wakemans were still in college at Cornell University. They were selling the bread along the road in Durham, Connecticut, to raise money to put them through the agriculture program. Their dream was to start a dairy farm in Wisconsin.

They were sidetracked, though, when in 1975 they took a summer trip to Montana. On a hike from Yellowstone to Glacier Park, they fell in love with the state and decided to move to Great Falls. In January 1976 they opened their first bakery.

“The idea of a whole wheat specialty bakery was unheard of at the time, especially in a small rural city,” says Laura Wakeman. “During the first few weeks, lines formed outside the door before we even opened. The entire day’s baking —all done by hand—sold out in less than an hour.”

As the Wakemans perfected their methods, they were constantly asked to open new stores. By 1978, they came up with a franchising plan, and today their bakeries are located in 35 states, with one store in Canada.

The demand to create even more franchises is tremendous. Annually, the Wakemans receive more than 7,500 applications from potential franchisees. For those approved, the cost of opening a bakery ranges from $106,000 to $308,000, depending on the size of the store and its location.

However, only a handful do get approved each year.

Why such slow growth? Because it isn’t easy to meet all the criteria of owning a Great Harvest bakery, the Wakemans say. Some of rules include: All whole-wheat flour must be ground fresh on the premises. All bread must be baked on the premises, and it must be sold hot. Every customer must be greeted with a smile and a steaming slice the moment they cross the threshold of the store.

The Wakemans don’t want to go around scolding their owners, so to ensure the high standards are met, applicants are carefully screened. Those chosen are often self-starters with an entrepreneurial spirit. And once a franchise is sold, the owner is encouraged to learn at his or her own pace—and to learn from others in the company.

That’s what Dan Farley did when he wanted to make a new kind of bread. Fellow franchisee John Palmer, in Wilmington, NC, had perfected a hard-crusted French bread and shared it with his friend in Greensboro.

“Experimentation is part of the business,” says Dan Farley. “If it works in one place, it may not work in another. But we are willing to give it a try.”

Allowing each franchise to be an entrepreneur has been part of the reason the company has been able to stay in business for 25 years, says Great Harvest’s chief operating officer Tom McMakin.

“Traditionally retail concepts have a shelf life of five years,” MeMakin says. “After that, the concept goes stale. Consumers want to see change. They want their stores to stay fresh. It’s the Achilles heal of franchising.

“But, by creating a learning community among franchise owners, we beat the odds. We have all these people working with us who enable our concept to constantly mutate and develop. They come up with great ideas, try them out and share them with each other. More than 100 owners put their heads together to improve the business. It is that group effort that creates a competitive advantage for all of us in the long term.”

What is the key to breaking into such an elite and successful franchising company?

Dan and Mary Kate Farley say it helps a great deal if you share in the Wakeman’s philosophy: Bake phenomenal bread, run fast to help customers, create strong, exciting bakeries, and give generously to others. And of course, they say, be loose and have fun.

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"I get by with a little help from my friends," says Hope, who gives special thanks to:

• MICHAEL GIBBS, website illustration and design: www.michaelgibbs.com
• MAX KUKOY, website development: www.maxwebworks.com
• STEVE BARRETT, portrait of Hope on Bio page: www.stevebarrettphotography.com

Contact HOPE KATZ GIBBS by phone [703-346-6975] or email.

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