A downtown Ann Arbor chocolate shop is now the hub of a growing franchising effort by Schakolad. Scott Huckestein, owner of the store on East Washington Street, recently became the first franchise developer for Florida-based Schakolad. His goal is to find new franchisees to open 20 stores over the next five years in Michigan, Indiana, Ohio, Pennsylvania and Canada. Schakolad, a family-run business, started franchising in 1999 and has grown to 35 stores. Huckestein has operated his franchise in downtown Ann Arbor since 2003, and his sales totals persuaded the company's founders to expand his role. One of the reasons: "I generated corporate business at a quick rate," Huckestein said. Schakolad store owners typically open locations of about 1,350 square feet in high-traffic areas. Each store makes its own European-style chocolate, and they have four income streams: retail, corporate logos, catering support and chocolate fountains. "If you see a foot of snow outside and retail traffic is slower, you still have the back end of the business to rely on," Huckestein said. Huckestein's local success includes generating more than 250 corporate logos that can be reproduced in chocolate. Some of the logos have been shared through other Schakolad outlets. The state's faltering economy has had some benefits to the corporate-logo chocolate industry, he added: "Even in a down market, companies are trying to set themselves apart from competitors." Franchises typically cost $110,000 to $150,000, Huckestein said. That includes a $30,000 initial fee and fixtures bought through approved suppliers, and franchisees pay an ongoing licensing fee of about 4 percent of the gross revenue, according to the company's Web site. All franchisees have to follow the same business model: They become owner-operators, Huckestein said, and they're expected to be on-site and identifiable with the business. "They will be known as the chocolate person in the area," Huckestein said. Huckestein has worked 18- and 20-hour days. He sees other owners sharing the commitment: None have gone out of business, and there's been very little turnover, he added. Huckestein said the company is likely to open new stores in Michigan, with new operators scouting sites in Birmingham, Grand Rapids, East Lansing and Detroit. Other Schakolad franchises in Michigan are located in Northville and Rochester Hills.
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