A Fresh-popped Franchise Idea

The Doc Popcorn company wants to do for popcorn what Auntie Anne's did for pretzels and Mrs. Fields did for cookies. The Boulder, Colo.-based company is opening kiosks and stores in New Jersey designed to convince snack buyers that fresh-made is better when it comes to popcorn.

DON SMITH /STAFF PHOTOGRAPHER BUY THIS PHOTO Erin Goss, assistant manager at the Doc Popcorn franchise in Paramus.

The company also is seeking to convince North Jersey entrepreneurs that a Doc Popcorn cart or kiosk is a lower-cost way to become a food franchisee.

Pop economics What it costs to get popping as a Doc Popcorn franchisee: Franchise fee: $37,500 (For a single location; multiple locations charged a sliding rate).

Start-up costs: Range from $70,000 for a cart to $130,000 for a kiosk or small store.

Net worth required: $250,000 Royalty fee: 7 percent of sales Doc Popcorn prices: (At Paramus location) $3.90 for small bag, $4.50 for large bag, $40 for 3.5 gallon tin.

Popcorn popularity: According to the Popcorn Board, Americans consume 16 billion quarts of popcorn annually. Popcorn producers sold 985 million pounds of popcorn kernels in 2010.

The first Doc Popcorn kiosk in North Jersey opened at Westfield Garden State Plaza in Paramus in November. David Coonin, franchise owner of the Paramus Doc Popcorn and regional director of "poperations" and development for the New York metro region, said he is hoping that having a kiosk in a high-traffic mall such as the Plaza will fuel future franchise growth in North Jersey. A Doc Popcorn kiosk opened at Palisades Center mall in West Nyack, N.Y., last week, and there are kiosks and carts in New Brunswick and Woodbridge and on the boardwalk in Asbury Park.

Coonin said he is seeking additional locations at North Jersey malls, as well as at sports arenas, train stations and college campuses.

Doc Popcorn has 45 locations around the country, and more than 200 under development. It has landed leases in some of the leading shopping centers in the country, including the Mall of America in Minnesota, and King of Prussia mall in Pennsylvania, as well as at South Station in Boston, and the Jacob Javits Convention Center in New York.

Familiar concept Doc Popcorn is not the first company that's tried to build an empire on popcorn shops. Dale & Thomas Popcorn, based in Englewood, originally had hopes of opening as many as 3,000 franchised popcorn shops when it was launched in 2004, but soon switched its business model to catalog and online orders, and wholesale and corporate sales. The company at one point had 10 stores, including one in Teaneck, but stopped operating retail stores in 2009.

Chicago-based Garrett Popcorn has 10 shops in Chicago that feature fresh-popped popcorn, as well as one location in Manhattan.

But Doc Popcorn founders Rob and Ren�e Israel believe they have an edge that will allow them to succeed where other popcorn franchises have failed.

"Popcorn's one of the most popular snacks in America, but it's not done very well," said Ren�e Israel. "We took a very commoditized product and we branded it." The company created a popping machine that allows store owners to pop kernels in very small spaces, and in mobile pushcarts, lowering the start-up costs and giving franchisees better odds of a quick return on investment.

"This operating model is very flexible, and it can go in virtually anyplace there is high foot traffic," Coonin said. "We have everything from an in-line store to a kiosk, to a hybrid cart-kiosk to one of our popping carts. It's fully self-contained. We just need some electricity and we're good to go." Start-up costs can be as low as $70,000 for a cart and average about $130,000 for a full-size kiosk or store, Coonin said. The company does not release average revenue for its kiosks and stores, but Ren�e Israel said franchisees "have seen quick-to-market ROIs (returns on investment)." While one franchisee said he made his investment back in under a year, Israel said she could not say what the average ROI was. Popcorn prices vary by location, but the Paramus kiosk charges $3.90 for a small, 6-cup bag and $4.50 for a large, 9-cup, bag.

Healthy reputation The company also touts its popcorn as a healthier snack. The savory versions, such as the salt and pepper, or better butter flavors, have 62 calories per cup and the sweet flavors have 79 calories a cup.

According to the Snack Food Association, snacks perceived as healthy, such as non-sweet popcorn, have been gaining market share in recent years. The market share of healthy snacks grew to 37 percent in 2009 from 29 percent in 2005, according to the association.

Nationwide, sales of popcorn kernels have stayed relatively stable in recent years, but annual sales are almost triple what they were in 1970, according to industry statistics published by the Popcorn Board, a trade association based in Chicago. The popularity of microwave popcorn is cited for boosting popcorn sales in the 1980s and 1990s.

Weny Boersema-Rappel, a spokeswoman for the Popcorn Board, said popcorn has been turning up on lists of trendy foods for 2012. She said she has been seeing "a little tick up in trends for restaurants serving more gourmet versions of popcorn, either as part of an entr�e, or as an appetizer item, with things like bacon popcorn, or truffle popcorn � things that had sort of an upscale epicurean appeal."

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