How fruit bouquets blossomed into a $500M business

Edible Arrangements' owner explains the keys to the company's growth, from small florist to global success.

By MSN Money staff Apr 9, 2014 6:35PM

By Clare O'Connor, Forbes

Forbes on MSN MoneyTariq Farid was a junior in high school when he bought his first business: a small flower shop in his adopted hometown of East Haven, Conn., purchased with a $5,000 loan from his parents.

At that point, his experience in the floral industry amounted to an after-school gig watering plants, helping his Pakistani immigrant family make ends meet (his father worked multiple jobs, including night shifts at McDonald's).

He was simply acting on a hunch and a love of fresh cantaloupe when, a few weeks before Easter in 1999, he and his younger brother and business partner, Kamran, decided to devote a corner of that 600 square-foot space to fruit rather than flowers.

Fruit baskets were certainly not a novel concept, but Farid's plan was to arrange shaved melon balls, slices of pineapple and skewers of grapes into a bouquet, so they looked beautiful and made for an original gift.

"Fruit is as universal as it gets," said Farid, now 45, on his inkling that his new business might just take off. By 2001, he'd opened two standalone Edible Arrangements stores in nearby Connecticut towns.

Fifteen years later, Farid's fruit bouquet business has somewhat improbably blossomed into a 1,200-store chain with outlets in 14 countries. In 2013, the company hit $500 million in system-wide sales for the first time, having overcome what Farid calls a "challenging" five or six years.

The economic downturn of 2007–08 made a $39 box of a dozen chocolate-dipped strawberries rather a tough sell. Farid also spent three years on the receiving end of a lawsuit brought by an independent group of franchisees, who alleged that corporate HQ implemented unfair system-wide changes without consulting them. The two parties settled in 2013.

Farid talked Forbes through his path from $500,000 system-wide sales in 2001 to $500 million in 2013.

1. Encourage franchisees to be entrepreneurs

Farid still runs a handful of Edible Arrangements outlets; he and his brother "always own two or three or five", he said. He treats his stores (currently, a few in the Orlando, Fla. area) as a testing ground for new products or marketing schemes.

"We have to try things before giving them over to franchisees," he said.

Farid encourages successful operators to snap up more than one store in his or her corner of the country. Now, about 80 percent of Edible Arrangements franchisees own more than one outlet.

"These are true small-business owners," said Farid, who offers entrepreneurial training and asks franchisees to share ideas with the corporate office based on local observations. "An owner in-store can do so much better than managers."

Edible Arrangements’ Fun in the Sun-tini. Courtesy of Edible Arrangements via Facebook, Localize, but be consistent

Farid recognizes that regional preferences for both fruit and gifts will always differ, especially given Edible Arrangements' international presence everywhere from Ottawa to Dubai. Some stores offer kosher fruit, for instance. Others facilitate Sunday deliveries.

While he's happy for franchisees to "be that neighborhood location," Farid is emphatic about the consistency of his company's fruit bouquets no matter the market.

"When you have people in Connecticut wanting to send to California, it's a marketing as well as an entrepreneurial challenge," he said. "It has to be a great experience. When it comes down to it, people are looking to impress."

His number one question from customers looking to send an arrangement to family or friends concerns the quality of his company's fruit over the winter months.

It's partly for this reason that all Edible Arrangements outlets use the same ever-bearing variety of strawberry, the Albion, known not just for its longevity and resilience but for its sweetness.

3. Be methodical in your growth

Farid aims to double the number of Edible Arrangements stores over the next few years, with plans to open between 110 and 120 a year — mostly in North America and all owned by franchisees.

"There were times when we were building 300 a year," he said. "Now we're more methodical and analytical in our growth. We've done 1,200 stores, so there's nothing to prove."

He's funding this growth partly with an undisclosed minority investment from Catterton Partners, a consumer-focused private equity firm with $4 billion under active management.

The Greenwich, Conn., outfit owns stakes in retail operations as diverse as Restoration Hardware and Outback Steakhouse. They joined forces with Edible Arrangements in 2012.

Farid remains the majority shareholder in his 15-year-old business.

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