What It Takes to Own a Bread Route with Chad Johnson, Flowers Foods
In this episode of Industry Insights with Route Consultant, we sit down with Chad Johnson, VP of Franchise Services at Flowers Foods. Join us as we explore the process and requirements for becoming an independent distributor with Flowers Foods, including initial steps, financing options, business plan development, and the support provided by Flowers.
Chad offers invaluable advice for both new and existing distributors looking to expand. Gain exclusive insights into the logistics industry and discover the opportunities available with powerhouse brands like Nature's Own, Dave's Killer Bread, and TastyKake.
About Chad Johnson
Chad began his career as a bread route driver in Atlanta before climbing the ranks at Flowers Foods through roles in HR and communications. Today, he leads franchise operations and enablement, ensuring independent distributors are supported with data, training, and tools to succeed. Under his leadership, the franchise sales process has evolved to include candidate vetting, financial requirements, and business plan submissions to ensure mutual long-term success. Chad’s deep-rooted belief in entrepreneurship drives his work supporting Route Consultant and other partners in identifying strong operator-investors.
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Josh Gregory: [00:00:00] Welcome to Industry Insights with Route Consultant, your front row seat to the fast moving world of logistics and beyond. Each week, we bring you game changing insights, real world strategies and fresh perspectives to fuel smarter investments and build stronger businesses. Join us as we sit down with expert guests to explore emerging trends and pressing topics.
Across a wide range of industries. This is industry insights.
Chad Johnson, VP of Franchise Services at Flowers Foods. It is a pleasure to have you back here today. Thanks for being here. Thanks for having me back, Josh. Yeah, and we've talked about, you know, a wide variety of things on the flower side in previous episodes. What I really wanted to do is for anyone who's watching and really trying to figure out, you know, if they.
Want to be an independent distributor with flowers? What's really that process? What does it look like as they're trying to get started? So go to the website. Do I click on something? You know, what, what is the, how do people typically get started here? [00:01:00]
Chad Johnson: So, you know, we get contacted in numerous different ways.
Um, one. Popular way is we do have a website. Mm-hmm. It's called Flow Routes. Mm-hmm. Dot com. F-L-O-R-O-U-T-E s.com. And a nice thing that's on there is we list all of our company territories mm-hmm. That are for sale. So you can go on there, peruse them, see if anything fits into the geography that you'd like to service.
And then it just is a matter of contacting someone on our franchise sales team. To get more details about the process and what the minimum requirements are a day in the life. Yeah. So on and so forth. And I'm sure we'll talk about that today. Yeah.
Josh Gregory: Yeah. So, so let's do that. Let's say, you know, what are some of the minimum things, you know, before I ever reply, what are some of the things that you think are kind of not, you think I know that it's actually a standard of the things that they have to have [00:02:00] when they come in and,
Chad Johnson: yeah.
So Let's I mean, you know, just say the average territory costs The. A hundred thousand dollars. Okay. Okay. We'll just use that as a, as a nice round figure. Uh, you're gonna have to have 10% down. Mm-hmm. So you'd have to have $10,000, uh, down and you'd have to have 10% operating capital. 'cause we all have to plan for those rainy days.
Yeah. Right. And, uh, that's, that's some of the minimum requirements you are gonna have to supply. A truck, uh, a delivery vehicle. Mm-hmm. Uh, to get, uh, you know, something that's, uh, obviously, uh, reliable and
Josh Gregory: uh, serviceable. Yep. Okay. So whether you're buying from flowers directly, you know, a corporate route, or you're buying from somebody who's a, you know, a flower owner selling their routes on their own, that 10% down is, is typically what's expected.
And now I know that this is different from what a lot of people expect and what, what they [00:03:00] may not even know about. What, tell me a little bit about how the financing process works differently here than if you're buying a typical business and going through a bank.
Chad Johnson: Sure. Uh, you know, flowers does have its own, uh, financing mm-hmm.
Uh, through, uh, uh, subdepartment that we have called Flow Fin. Mm-hmm. So we can finance the territory for you. And obviously if we do that, then the, the, the territory note payment comes out of your weekly. Settlement.
Josh Gregory: Yeah. And that's huge for a lot of people. Uh, just knowing that, you know, there are gonna be people who want to go through their own banks who use a conventional lender if they choose to, but it's really nice to know that if you want to get into this, you need the 10% down.
And then there is a financing option there no matter what, essentially. I mean, there's probably gonna be requirements on them to get approved for the financing, but it is. An in place arm of financing specifically for these routes.
Chad Johnson: Yeah. Because you know, that's, that's part, that's the, you not, we're only talking about the financial part of it.
Yeah. But you know, you're gonna have, we're gonna [00:04:00] check your credit score. Yeah. You're gonna have to have a driver's license. Yeah. You're going to have to have a good driving record. You're gonna have to carry insurance. All the, you know, all the normal things that any business require. And then, you know, you're gonna, if this is something you really wanna pursue, you're gonna need to put together a business plan.
Mm-hmm. And which any, anybody that's buying a business needs to do that because they have to have a plan on what they are going to do to succeed. Who are their customers? What are the products they're carrying? What is their competitor activity? Who are their, the retailers that they're servicing? And what is, uh, the.
What do the sales look like now and, and how can you improve them and how do you expect to improve
Josh Gregory: them? Yeah. So if you're fresh coming in, you know, what are one of some of the ways you can learn some of these things to build a business plan? Or is it something where you benefit a lot from having some experience in this space?
Chad Johnson: Well, obviously you're gonna benefit if you have that prior knowledge. We have two things that we do. We have a franchise operations team [00:05:00] and what they're for any of the company territory sales, the, the, the territories that flower owns, we're going to sit down, have about an hour meeting mm-hmm. With that interested party and just walk them through what's what, what, what are you buying?
Yep. What's a day in the life look like? Uh, what's the growth potential? All of these, all of the, the, the knowledge anybody would want to know with what they're buying. And then what they're also setting you up to do is we're gonna have a discovery day. Okay. Okay. Let's say after that meeting you're like, yeah, this, this sounds interesting.
Yeah. I wanna
Josh Gregory: proceed still moving forward.
Chad Johnson: Absolutely. So we wanna get you out and be able to check out. A territory. Mm-hmm. So you're, you're gonna do a discovery day where you get to see from soup to nuts a day in the life of an in independent contractor, or maybe it's one of their employees. Right? Yeah.
Because we do have multi territory owners that aren't out there daily running a territory. [00:06:00] They're managing their business. Mm-hmm. Or businesses and. So we're gonna set you up to say, Hey, here's the things you need to look for. These are gonna be the things that we're gonna be looking for in the business plan.
So, you know, here's, here's what I think you should be looking for when you're on your discovery day.
Josh Gregory: Got it. Okay. So that discovery day is not that they're being quizzed, degraded. It's really a chance for that. You know, perspective buyer to, to just see what it's like and to hopefully take some of the things you've told 'em to look for, learn on that day, and then turn around and be able to apply it in the next follow up steps.
Chad Johnson: Yeah. Um, you know, it's. For a very overly simplistic analogy, it's almost like test driving a car, right? Yeah. Yeah. Do I like this car? Does it, is it fast enough? Is it safe enough? Is is the soundproofing good? All that stuff, you know, but it's, it's, it's your chance to really, you're not running the territory, but you're seeing somebody else run one and it lets you know what, what, again, what's gonna happen out there on a daily basis.
Josh Gregory: Yeah. 'cause there's always a difference [00:07:00] between. You know, the paper and the conversations you've had that, that reality, and then what does the day look like? What are the, the fun things that happen that you have to learn how to deal with as an owner that hopefully you'll just get some exposure on that day to really get a better sense of what you can expect.
Chad Johnson: Yeah. And you're gonna be out there and you're gonna be able to ask questions too and, and really see, uh, the nitty gritty details.
Josh Gregory: Yeah. Okay. So that's a day. That discovery day, what's next in the process?
Chad Johnson: So next in the process again, is it's do you wanna proceed, right? Yeah. Is this something you're interested in?
Yep. And if it is, you are then with your, uh, franchise sales person, they're going to, uh, you know, request financials. Mm-hmm. And they're gonna ask you to put that business plan together. Yep. Uh, they're, you know, you're going to obviously give proof that you have the operating capital, that you have, the, the.
The money that you can put down mm-hmm. Uh, on the purchase and, uh, insurance requirements, [00:08:00] things of that nature. And then, uh, the, the next step is, is you'll go through, uh, a process where we review your business plan. Mm-hmm. And, uh, we sit down and talk to you about it. And really, again, you're, then you're back with the one of the franchise operations coordinators.
You're not gonna be bounced around. You'll be meeting with the same one that you talked to, uh, for that first, uh, hour, and they're gonna review your business plan with you, and again, make sure that you're se you're setting yourself up and your future business for success. Mm-hmm.
Josh Gregory: Yeah, and I, I think it's important to see that those first few steps, the, you know, kind of the, the pre-interview that you, the franchise hosts, and then the, the discovery day, those are.
Just gut checks. Those aren't even necessarily evaluations yet. It's just a way for you as a prospective investor to kind of see a few things and decide, okay, does everything still check out? And then if [00:09:00] it does, then you get to kind of the, we've, I've created a business plan, let's go through it and have more of a formal kind of approval side of the equation.
Chad Johnson: Yeah. Yeah.
Josh Gregory: And so. At that point, you know, is that, is that really where they're being, you know, you said you review a business plan. Is that where there, that is more of a formal approval checkpoint in the process?
Chad Johnson: It is. That's, that's one of the, the, the big approval processes. Yeah. It's like once you're done having that conversation and going through your business plan and.
You know that operations coordinator and, and a lot of times the local sales teams mm-hmm. They participate as well because those are the people that are there to support you on a day-to-day basis. Yeah. They, they want, they're gonna give their opinion too, you know, they know the market and what it takes to be,
Josh Gregory: uh, a success.
We've got. You know, you, you're, you're finding the route on the initial side, however long that takes for you to decide to, to take the first step into bread. But once you've found something you want to go after, you kind of reach out. You go through the [00:10:00] initial. Kinda reach out process. And then you're going and you're doing the discovery days, the pre-interview, you do the kind of formal evaluation, then the training period after that, and then followed by the closing.
What do you typically see that process taking from a timeline perspective?
Chad Johnson: I mean, we like that to move as quickly as possible. Yeah. Um. You know, some of this is contingent upon the buyer. How quickly are they getting the, the following up on the steps, the information back to us? Mm-hmm. You know, with their, their driver's license, their credit score, their financials, the Yeah.
Really it's a case of the faster you move, uh, we'll, we will match your speed.
Josh Gregory: Yeah.
Chad Johnson: And you know, I mean, we'd like to see it happen in. You know, six to eight weeks. Yep. If possible. Yeah. Uh, and, but again, you know, there's always certain
Josh Gregory: circumstances of
Chad Johnson: things
Josh Gregory: that go on. There's all kinds of things that can happen.
Yeah. We can talk about a. Uh, hope, like the, the [00:11:00] timeline we want it to be in, that it should be, and then, you know, everybody's got their own challenges that can jump in.
Chad Johnson: That's
Josh Gregory: right. I
Chad Johnson: mean, people have, uh, their own circumstances. I'm sure there's a lot of business owners that they're, they're, they're operating another business and, but again, you know, six to eight weeks, somewhere in that area.
Yeah.
Josh Gregory: That, and I think that makes perfect sense. I think from a, a growth pathway and kind of a, a learning pathway, that's enough time to, to have made a decision and, and really evaluate if it's the right fit for you. But I, I think it's a good point as well, that the more prepared you can be when you start the process, the faster you're gonna move.
And it's, you know, so not that. You're gonna be, you know, going out and running in a truck before you ever even apply. But the more you can gather your resources and, and even start to think about a business plan and put those things together, the more seamless and smooth, the rest of the process will be.
Chad Johnson: Yeah. And when I'm saying that six to eight weeks, I'm saying you've already, you already know what. You intend on purchasing, correct? Correct. That that entry period could be a year, [00:12:00] right? Yeah. Well, and it, well, it, how much time is it gonna take you to, you're gonna wanna look at the financials? Yeah. You're gonna want to probably go out on the market and see the, the retailers and the, and the customers that are on those stores or on that, on that territory list.
So, uh, that, you know, that's all up. To the potential buyer. Yeah.
Josh Gregory: Yeah. The, the financing side that does, that kind of runs in, in like, you know, it's happening at the same time in the background. Like there's no separate finance approval process that takes a long period of time after, you know, you get approved for the route.
That's just all happening on the, on the, uh, flower side in the background.
Chad Johnson: That's correct. So the franchise operations coordinator and the franchise sales team mm-hmm. They're going to handle all of that, all those details. Yeah. And. If they have certain boxes that they have to check, and once those boxes are checked, when it goes to the, to the finance department, it will, it will go through.
Okay, gotcha. Yeah, there's, there's not gonna [00:13:00] be like that call like, oh, hey, we've got a problem.
Josh Gregory: Yeah. And that's, I mean, it, we like to say that we, you know, we work with a lot of banks. We know they, you know their process and we can, we know what you should expect from a bank, but it. Inevitably, there's all kinds of problems that can happen at the finish line with a bank when you're doing a traditional lending arm.
So it's great to hear that that part, at least if you kind of check the boxes on the flower side, you're gonna be fine on the financing side.
Chad Johnson: Yeah, yeah, yeah. And I mean, you know, obviously, like you said, there's other ways you can finance it. You can go to a bank, you can go get a small business loan, or you can just buy it.
Josh Gregory: Yeah. Yeah. So I think that encapsulates the process for if you're coming in and starting on, you know, your first route Let's say you're an existing Flowers, IDP, and you want to add a route. Mm-hmm. Um, and look at that process. How does that change? Is it the same? It actually
Chad Johnson: doesn't change. Okay. It's the exact same.
I mean, you know, you think it. Yeah. It's just as [00:14:00] important to see that business plan, if not even maybe more important. Yeah. For somebody that's now venturing into multi territory ownership mm-hmm. What is your business plan? How are you moving from being a single owner to maybe purchasing. Two or three or four more territories.
Yeah. What, you know, what does your, uh, corporate structure look like? What does your employee structure look like? How, uh, you know, what does your fleet structure look like? Yeah. Everything from,
Josh Gregory: from soup to nuts. Yeah. And, and I think that's a hundred percent the right way to think about it, of it. You know, for however many routes you're adding, each of that is a, a higher level of responsibility.
And the business plan and how you're thinking about preparing for this is even more important than that first one. So you don't just get to say, I've been doing this for 10 years. It'll be easy because there's a lot of complexity that if you just tried to go in blind and add a route and just be like, I've done this once, I can do it twice.
You're adding, you, you're, you're probably gonna hurt yourself more than anything if you just think it's gonna be [00:15:00] kind of duplicating what you've done before. There are things that you have to think through from a structure, from a fleet, you know, a contingency standpoint that you, as you grow, are different problems and you've got more scale to solve them.
But if you don't plan for how to solve them, then you've just got more problems. So it is important to really think through what that business plan looks like as you get bigger.
Chad Johnson: Right? Because you know, you could be. Great at merchandising and servicing and selling and operating your business. Mm-hmm. And managing your business.
But then you start. Adding to it and you add in employees and that adds complexity. Mm-hmm. So then you have to be a good leader as well. Yeah. So it really starts touching on all the facets of someone who is, and I just used the word, but someone who's a good leader. Yeah. And, and can really run the gamut for every.
Single touchpoint
Josh Gregory: in the business to be [00:16:00] successful. Yeah. Your individual operational skills are important, but they're, they become less important. And the overarching, can I run a business skills get more and more important the the larger you grow? Absolutely. Yeah. Now, are there scenarios or, or would it even be possible, could you come in and apply for multiple at the same time?
Yeah, yeah,
Chad Johnson: yeah. Right off the bat. Yeah. You, you could say, I'm coming in here and I'm buying seven territories, and it's. Show us the business plan. Exactly. It's, it's, yeah. How are you going to succeed? What's, you know, what, what is your plan?
Josh Gregory: Yeah. It's not something that's ruled out, but at the same time, if you're coming in with seven, you gotta be able to explain how you plan on doing it and, and building the plan and having the resources, or at least the plan on how to, to secure those resources before standup.
Chad Johnson: Yep.
Josh Gregory: Yeah. So it, I, I think that that is an encouraging prospect for, you know, when we talk about a lot of people who are looking at this space, I think some people. Write off, you know, bread ownership. 'cause they're like, I don't wanna drive the truck. They're like, that's not [00:17:00] my 10 year plan is to be in a bread truck.
It is something where you can, you'll learn a lot if you're actually the one driving, but you can create businesses in this industry where you are still focusing on running, you know, a variety of routes and you're not the one in the truck every day. It doesn't mean you're not involved in the business.
Nobody's pretending this is mailbox money. This should be something where you should be involved, but this is something where. An independent entrepreneur can come in and really, you know, roll up their sleeves and be successful by creating a business at scale in this industry.
Chad Johnson: Yeah. Again, kind of what you're alluding to, it's not rocket science, but you have to have some business fundamentals.
Mm-hmm. You gotta know a little bit about, uh, consumer package goods. You gotta know a little bit about, uh, direct store delivery and what it takes to be successful. But no, you don't need to be out there running a. Territory every single day. Does it help to know what's going on? Absolutely. That's any business, right?
Yes. You've gotta know what your employees are doing so you can properly That's right. Manage them and set them up [00:18:00] for success. Yep. That's
Josh Gregory: a hundred percent right? Yeah, and, and I think. That is a picture that I know that a lot of investors don't really understand that huge opportunity there. And I think even a lot of independent distributors in your own network or even in, you know, any bread network, don't even realize that that's still an opportunity for them.
I think it's just an ingrained mindset, uh, of what this space was without realizing all of the opportunity that it can be. Yeah. So, uh, I think more to come there and, and I think there's a lot of exciting things both in, in everything that I've heard you all talk about in the way that you think about the future of this model and the confidence that you have in it, but also the support that you provide for it.
That if I was an investor looking to get into this space, I would have, you know, just like I said, a lot of confidence that I'm going to be supported by a company that wants to do right by me. And wants to make it work because it's the, it's in the best benefit of everyone. For flowers to be successful, the IDPs have to be [00:19:00] successful and, and it's the way the model works.
Chad Johnson: Yeah, exactly. And I mean, you just can't leave off the powerhouse brands. I mean, yeah, yeah. It's
Josh Gregory: just, it's, you're not operating in a vacuum. You get flowers. Right. You know,
Chad Johnson: and you, you know, so many times. I, I, well, I've come through my tenure. I've come to, I work for Flowers Foods, and they're like, what is that?
I don't, I don't know what that is. I know. But then you start explaining the brands, the nature zone, the Dave's Killer Bread, the Wonder, the Canyon Bake House, the Tasty Cake, and they're like, oh, that, that's your, oh, I love that. Oh yeah. That's great. But then you've also, like we talked about. People need, people are gonna buy bread.
Yeah. You know, this isn't something that people say, eh, I can do without that. People need to eat.
Josh Gregory: And that's just a, that's just an American staple. Yes. And, and so it, it is, it's one of those things, like we've talked about it, this is a recession proof industry that is a, you know, it's just a part of intrinsic demand.
People are always gonna get it. And, you know, no matter what [00:20:00] happens. Bread's gonna still be here. And so being a part of one of the largest brands in the country and having access to not just, you know, a variety of brands across different, you know, subcultures of food, but also having a, you know, having access to a team that's working to stay ahead of those trends and adapt products so that you're prepared.
And I, I think that's the, the value of that is immeasurable as an independent. Exactly. I couldn't summon up any better. How long have you been with flowers? Perfect. Well, Chad, I, I appreciate you being here. Uh, honestly, your insight and kinda your passion that I've seen talking about this space has been, um, enthusiastic.
It's been, uh, encouraging for me to just see how you all view the space, and I think anybody who's looking at it would understand and feel the same way.
Chad Johnson: Well, we're excited, uh, hopefully this, uh, educates some people on who we are and what the opportunity is and, and really appreciate the time in the studio.
Perfect. All right, thanks Chad. Hopefully you have a good
Josh Gregory: trip back.
Chad Johnson: [00:21:00] Yeah. Thank you Josh.
Josh Gregory: See ya.
