Franchise At 'Producer-only' City Market Draws Complaints

CHARLOTTESVILLE | Monday, May 07, 2012

The local manifestation of a national bakery chain has started setting up shop every Saturday at the Charlottesville City Market, sparking a debate over the rules that determine who gets a spot at a market that's short on space.

This season's arrival of Great Harvest Bread Co., a corporate franchise, at a market touted as "a producer-only market since 1973" has rubbed some people the wrong way, but the local owners say they've gotten a warm welcome from customers eager to buy their bread, muffins, cookies and other baked goods.

Charlottesville's Great Harvest opened last June at a regular storefront in McIntire Plaza, but its expansion to the City Market has been met with questions and criticism from some market participants.

The market is overseen by managers in the city's Parks & Recreation Department, who approve applications from qualified vendors. Once given a space, vendors pay site fees and sales taxes to the city.

The concerns about Great Harvest reached the city attorney's office, which has advised market managers to honor the agreement with Great Harvest for the current season and develop a clearer policy on franchise vendors for the future.

The Great Harvest parent company, which operates out of its home state of Montana, has launched 197 bakeries nationwide, including seven in Virginia, according to a company spokesperson.

Some market vendors are upset that they have to compete with a national brand that's been given a coveted space while more than 100 farmers and vendors are still on a waiting list.

Market officials didn't know that the local Great Harvest was a franchise when the bakery successfully applied for a reserved space for this year's season, according to Market Manager Stephanie Anderegg-Maloy.

"I can't say that we background searched this place," Anderegg-Maloy said. "But we don't typically do background searches on vendors." "There's nothing forbidding me from being there," said Matt Monson, who co-owns the local Great Harvest along with his wife, food blogger Kath Younger. "Also, the market managers are pretty enthusiastic. Apparently I'm the top-selling bread vendor that they've ever had I think that most customers are speaking their mind with their wallets We're doing great business there. Which is great for the market and great for the city, as well." Multiple vendors voiced their frustrations about Great Harvest in interviews with The Daily Progress, but declined to be named publicly.

The vendors fear that allowing corporate chains into the market sets a bad precedent. According to the Great Harvest rationale, said one source, a Subway restaurant could claim to be serving local food just because the sandwiches are made in Charlottesville.

Another vendor said that if the market had more space to begin with, there wouldn't be any arguments about new people coming in.

Monson said other Great Harvest bakeries participate in farmer's markets, and his high-quality product is the reason for his popularity at the market.

"What I think might be going on is one person is really bothered by it. Let's just say a very, very small minority are bothered by this and are going around trying to raise some trouble," Monson said. "You'd think if this were a big issue, I wouldn't be selling anything and I definitely would've gotten some complaints to my face. And none of that has happened." Cecile Gorham, chairwoman of the local nonprofit Market Central Inc., said it can be tricky to decide which businesses should qualify for market space and which should be excluded, and Great Harvest isn't the only company with a regular storefront to be given a market spot. Still, she said, the franchise issue raises some questions.

"Would it be just like Panera [Bread] coming to the market or something? I guess that's the question," Gorham said. "That would be pretty weird to have Panera at the market, I would think." Great Harvest, founded in the 1970s in Great Falls, Mont., offers a "freedom franchise" model, which stresses independence for local owners backed up by the expertise and resources of a larger operation and network of bakeries.

"We're not a cookie-cutter franchise. We encourage uniqueness," said Kate Ord, the company's director of marketing. "We don't want the bakeries to look alike. We want them to have the local flavor and to be a neighborhood bakery." Each Great Harvest location is independently owned and operated and owners are free to use local ingredients, Ord said.

Franchisees pay royalties to the corporate parent starting at 7 percent of gross sales, but the royalty percentage drops as bakeries get older.

Ord said most of the company's wheat comes from growers in Montana and Colorado, but bakery owners are encouraged to tailor their offerings to their local markets.

"Kath and Matt are highly creative and into food," Ord said. "And the recipes they create are just phenomenal." The market manager said Great Harvest was given a space partly because another bread vendor had left, but a decision clarifying the rules regarding franchise vendors which will likely be made with input from the Parks & Recreation Advisory Board and other vendors is still pending.

"I'm torn," said Anderegg-Maloy. "I like them as a vendor. They're good vendors. They're nice people. And I think their heart is in the right place and they're trying to do the right thing .... But I'm also in a bad spot." Monson, who said he puts in 80 hours per week trying to build a successful local business, feels he deserves a space.

"This is definitely a business that I've worked really hard for," Monson said. "And I think if anyone were to come into our store not having any idea who we are, you would never guess we were a franchise."

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Great Harvest Franchising Inc.
28 S. Montana St.
Dillon, MT

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