A staple for holiday dinners, Honey Baked Ham is looking to expand by attracting franchisees through a new incentive program.
Around the holiday season, Honey Baked Ham is a household name. But customers aren’t always aware of the brand’s “everyday meal” options the rest of the year, said Scott Temme, franchise sales and development manager.
“We’re not just a seasonal, holiday-centric brand,” said Temme. “I do see us as relevant the rest of the year, what we’re starting to call the everyday meal period.”
With a new incentive program for franchisees and new partnerships, Honey Baked Ham is ready to push franchise expansion.
“Having been around the brand for a significant period of time like I have, we’ve absolutely put the gas pedal on growing this brand in a way I have really never seen us before,” said Temme. “I thought, ‘How do we put the pedal to growth?’”
Scott Temme, franchise sales and development manager for Honey Baked Ham.
So, the brand started offering financial incentives to attract franchisees.
Temme has worked with Honey Baked Ham on and off over the last decade and came back because of his love of the brand. Having fond memories of his own experience as a child, he not only wants to bring those same memories to families, but get the brand into the daily consideration set for consumers.
The plan for development is to emphasize new franchised units while opening corporate locations too. The company expects to open eight new locations by the end of 2023.
Related: Franchisors Get Creative with New Incentives to Draw Franchisees
With the help of lending partnerships with ApplePie Capital and BoeFly, Honey Baked Ham’s franchisees can leverage their current capital to add locations.
Under the brand’s incentive program, franchisees who sign a single-unit agreement will pay no royalties for the first year. Then franchisees will begin paying 6 percent, Honey Baked Ham’s full royalty rate. Multi-store agreements are much the same, but the second year is 3 percent instead, while the third year open brings them to the full 6 percent.
The caveat in the first year is a boost in marketing spending, which is normally 3.25 percent of net sales. The franchisee gets to choose how that marketing money is spent.
“What we’re saying to the franchise community is we want to grow, and we don’t just want to open stores,” said Temme. “We want to open stores strong.”
Though this means less cash in the short term for Honey Baked Ham when new stores open, the long-term benefits are what motivated the company, Temme said. Ultimately, for the company and Temme, growth is always beneficial and strong openings mean overall success for the brand and franchisees.
Temme said a franchisor implementing these incentives sends owners a message: The company is making sacrifices for franchisees’ benefit and forming a community, Temme said.
The initial cost of opening up a Honey Baked Ham ranges between $431,050 to $718,200 according to its franchise disclosure document. In 2022, average net sales were $923,046 across 210 stores, each open for at least three years, according to its Item 19. In the same year, Honey Baked Ham opened 31 new stores, all but six of which are company owned, according to its Item 20.
“In the last couple of years, we’ve said, ‘Hey let’s ramp up efforts from a development standpoint,’” said Temme. “It’s been a blast leading efforts to help people realize their dream of becoming a franchisee and business owner. It’s absolutely what fuels me.”