Ham It Up

Making a holiday time favorite a lunch time success
Magazine Contributor
3 min read

This story appears in the October 2000 issue of Entrepreneur. Subscribe »

Every time the Maddocks household springs for a big, glazed, spiral-cut ham, we can count on sustenance for at least one week-assuming Kathy and I are able to guard this bounty from the little fingers incessantly trying to pinch a bite. The feasting begins with the traditional ham dinner, followed by ham sandwiches and the occasional "handful o' ham" when no one's looking. The remaining bits end up in a scalloped potato casserole, and we ultimately bid our sweet farewell to the remains when we drown the bone in split pea soup. For the next few days, the family hibernates, awaking only to drink water.

Ham is the other pink meat, and at Heavenly Ham they want you to know ham is not just for Easter anymore. In fact, the franchisor of more than 191 Heavenly Ham stores has recently changed its entire method of operation to support this belief, and the strategy seems to be working.

A few years ago this chain franchised stores that used about 2,000 square feet of strip-center space, conducting almost 60 percent of their business during the Easter, Christmas and Thanksgiving holidays. Then an ambitious franchisee by the name of Felix Mirando began testing a concept, with the franchisor's assistance, known as the box lunch program. At that time, the stores weren't selling many sandwiches, but when Mirando started offering a sandwich, a side dish, a big cookie and a can of soda for just under $7, America's corporations responded.

Today, about 40 percent of the gross sales of any Heavenly Ham store comes from the box lunches, most of which are delivered to businesses in the surrounding areas. And, in discovering this whole new sandwich profit center, Heavenly Ham found a way to introduce its products to those who might not have purchased big hams in the past.

To build on this big improvement in store performance, the company is rolling out a prototype store, introduced in 1997, that uses an additional 500 square feet for a sandwich line and limited seating. Franchisees are responding by adding space and remodeling-they're also selling products from Omaha Steaks. Consequently, stores that have opened since 1998 that have taken advantage of these innovations are reporting stronger results much earlier than the older Heavenly Ham stores, says Wade H. Brannon Jr., senior vice president of franchise development.

The chain's published earnings claims show that average gross sales for 159 stores were $459,520 in 1999; however, as most of the chain remains to be renovated, I suspect this will increase in the future.

The initial cost to open a store is estimated at between $184,900 and $289,000, including the $30,000 initial franchise fee. Franchise candidates should have net worths of $250,000, including liquid assets of approximately $180,000. If you can find a location with retail visibility and great access to office buildings, you're on the right track.

This is a hands-on business with decent store hours most of the year (10 a.m. to 6 p.m., Monday to Saturday). Holidays are the obvious exceptions; expect to stay open for extended holiday hours when ham and smoked turkey lovers descend upon your store.

If this doesn't deter you, you'll be delighted to find out territories nationwide are open for further development. Your competition comes from other food-service establishments as well as The Honey Baked Ham Company, the leader in the market for spiral-sliced baked ham.

Todd D. Maddocks is a franchise attorney and small-business consultant who is presently the CEO of The Worldlink Group LLC. You can reach him at TMaddocks@aol.com.

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