DISCLAIMER: The following questions and answers are for INFORMATIONAL PURPOSES ONLY. The responses provided by Snyder’s-Lance, Inc. are not representative of a specific route’s value or productivity. For route-specific information, please refer to the route detail summary. The profit or loss an Independent Distributor Partner (“IDP”) will recognize is dependent on a variety of factors, including the quality of the IDP operations and ability to successfully service its customers.
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ROUTE PRICING AND SALES
How is the route purchase price determined?
For IDP to IDP route sales, the seller will determine the sales price. All SL owned route sales are calculated by a ratio based on a weekly gross sales average.
Why is a particular route for sale?
There are any number of reasons SL may be offering a route for sale. A re-engineering project may have resulted in the creation of additional routes. An IDP may have voluntarily terminated its contract due to medical or personal reasons that preclude the owner or operator from servicing the territory. At times, it is necessary for SL to terminate the distributor agreement with an IDP for serious or repeated violations of the distributor agreement.
How does an IDP recognize a profit?
As an independent distributor, IDPs receive a profit margin on products purchased and sold. Profit margins vary depending on the items sold but are generally between 15% and 21%. Margins and product mix will fluctuate by sales market and by route. The margin is earned on the net sales ticket. This is equal to the gross sales ticket less any off-invoice promotions.
By way of illustration, if a route operated on an 18% margin with average net weekly sales of $6,636, the estimated weekly earnings for the route would be $1,194 per week.
What is the route’s profit potential?
The amount of profit an IDP realizes is largely dependent on its ability to effectively manage its business. Many variables will affect the success or failure of an IDP. Areas of potential profit growth include the opening of new customer locations, the addition of available product lines, and expansion of the product mix or quantity a customer purchases from the IDP.
Can IDPs finance the purchase of a route?
There is no requirement that an IDP finance the purchase of a route. If an IDP is interested in financing the route purchase, it may do so through a financing entity of its choice. SL has established a relationship with three independent lenders to assist with route financing for IDPs that meet their credit qualifications. If an IDP wishes to explore financing through one of the lenders with which SL has an established relationship, SL will coordinate this process between the IDP and the potential lender. If financing is approved, SL will provide for automatic settlement deductions to the lender for repayment of the loan post-closing.
Is there a down payment requirement?
The necessity and amount of down payment will depend on the route, purchase price, IDP and IDP guarantor credit and funding source. Generally, a minimum of ten percent (10%) of the purchase price is the down payment requirement.
Do IDPs have to sign a contract?
In order to clearly define the responsibilities, obligations, rights and remedies of the parties, it is necessary to enter into a written agreement. The distributor agreement will be provided as part of the closing paperwork. IDP representatives are encouraged to review the distributor agreement and associated purchase documents with appropriate professionals, such as an attorney and/or certified public accountant.
EXPENSES, OVERHEAD AND SERVICING CUSTOMERS
What are potential expenses and overhead an IDP may incur?
Each IDP’s expenses will vary depending on its business structure, operating procedure and market requirements. Examples of potential expenses and overhead an IDP may incur include, but are not limited to, loan repayment (if an IDP elects to finance the route purchase), fuel, stale or damaged product, equipment, employee wages and benefits, health insurance, and general liability, automotive and workers’ compensation insurance
Do IDPs need a specific type of delivery vehicle?
SL does not provide IDPs with a vehicle nor does it impose any vehicle requirements on IDPs. An IDP is responsible for providing its own vehicle. Common delivery vehicles used for this type of business are step vans, box trucks or trailers, but IDPs are free to utilize whatever type of vehicle it deems best fits its business needs.
Do IDPs have to pay for inventory or purchase product upfront?
SL does not offer product on consignment. IDPs generally purchase product from SL at its warehouse locations. At the time of such purchase, title and risk of loss is transferred to the IDP. However, SL offers credit terms wherein an IDP is able to make the payment for the product a specified number of days after purchase. IDPs are expected to settle their accounts with SL on a weekly basis. Failure to make timely payment may result in SL’s refusal to sell additional product to the IDP until its account balance is paid.
How does an IDP determine its net profit?
To determine Net profit subtract the IDP’s variable operating expenses from the Gross profit.
How many days a week, and what hours do IDPs operate?
It is up to each IDP to determine what days and hours its employees will work. Most IDPs operate 5 days a week, usually taking Wednesdays and Sundays off. Service hours for most accounts range from 5 a.m.-1 p.m. The days and hours of operation are subject to any specific customer requirements. When SL receives notice from a customer of service expectations, SL will promptly notify affected IDPs. It is up to each IDP to develop its operational cadence in order to comply with its customers’ requirements.
Do IDP owners, officers and/or employees receive vacation time?
IDPs are responsible for determining any benefits offered to its owners, officers and/or employees, including vacation time, while maintaining effective customer service and sales. SL may be able to provide temporary coverage for an IDP when its normal operator is on vacation or ill if SL personnel are available. There is no guarantee that SL will have personnel available to provide route coverage nor any guarantee of the length of time SL will be able to provide such coverage. A standard fee, outlined in the Suggested Operating Guidelines, is charged by SL for this service. Due to the uncertainties surrounding the availability of SL personnel, and in order to secure definitive coverage, IDPs often hire temporary employees or engage other IDP companies to provide coverage of its territory. Be advised, the IDP that owns the territory is ultimately responsible for the service provided to its customers even when a temporary employee or IDP is providing coverage.
MISCELLANEOUS
What is a re-engineering?
SL monitors the various regions across the United States to evaluate market saturation. When territories become too dense, IDPs often struggle to properly service customers and are unable to seek out new opportunities to grow their business. SL will review the various territories and realign route boundaries to provide a better opportunity for IDPs to provide exceptional service and further develop the market. Prior to the realignment of boundaries, SL will repurchase the existing routes from the IDPs in the region in accordance with the terms of the distributor agreement. After the realignment, IDPs will be offered an opportunity to purchase a new territory. Re-engineering projects frequently result in the creation of additional routes. Qualified IDPs are encouraged to explore the expansion of their business into multiple route ownership.
What is the company background of SL?
In 2010, Snyder’s of Hanover, Inc. and Lance, Inc. completed a merger that resulted in the creation of the second largest salty snack manufacturer in the country! The newly formed company, Snyder’s-Lance, Inc., is the parent company of SL. Snyder’s-Lance, Inc., its affiliates and subsidiaries, including SL, continue to gain market share through their commitment to provide consumers delicious snacks made with quality ingredients for every occasion.
What products are available for purchase and distribution?
SL offers a wide variety of both Snyder’s-Lance, Inc. branded products as well as partner brand products to IDPs to provide a greater mix and opportunity for profit in each IDPs territory. Examples of Snyder’s-Lance, Inc. brand products include Snyder’s of Hanover®, Lance®, Kettle Brand®, Cape Cod Potato Chips®, Stella D’oro® Krunchers!®, Archway®, Eatsmart®, Emerald® and PopSecret®. Please note product availability may vary by warehouse. Not all Snyder’s-Lance, Inc. products are considered Authorized Products under the distributor agreement. For a listing of current Authorized Products, please consult the DSD Price List under the IDP Information tab.
