FAQs Regarding Our 2018 Expansion Plans
The decision to pursue expansion is made by the Board on the recommendation of the General Manager and her leadership team. Expansion research has been taking place for several years. A professional Market Study and analysis was initiated by the JLF Board and completed in 2015. The Market Study found that our market area could support a much larger retail store.
Yes. The Board of Directors are the elected representatives to envision and articulate the future of JLF. Expansion was discussed at the 2015 and 2016 Annual Owners Meeting.
Owners do not vote on an expansion project, as that is not how JLF's decision-making model is set up. Rather, the Board of Directors will seek owner feedback through a variety of channels, so that we can use that direction in our decision-making processes. The Board has spent the last three-plus years learning about co-op expansions, consulting with experts, and soliciting feedback from JLF Owners on the idea of a growth project. We are prepared to make the complex decisions to best serve the JLF Owners.
We've been hearing from JLF Owners that they'd like to see JLF make local and organic food even more accessible than it is now. This includes more ready-to-eat foods, more fresh meat/deli items, and a wider array of product options. We've also heard that a Deli and seating area is very valuable to the community. The newly updated facility will serve the community of the Chippewa Valley by providing access to healthy, organic food and produce. With considerably more space and more customers, JLF can expand its product lines and buying power which will intrinsically generate deepened support for the small regional farmers and producers and increase the accessibility of fresh local food offered at the Co-op.
No. The costs associated with expanding our store will not impact prices of products. Retail prices are driven by several factors, including: cost of goods from vendors, costs for product ingredients, packaging, and transportation. Weather events that impact product availability and deliverability can also contribute to price increases. JLF is like other grocery stores in that the more food we sell, the lower our cost of goods. As our sales increase, we would expect to see cost savings that we then pass on to shoppers. It can also be expensive not to expand when sales exceed a certain dollar value per square foot. Employees make due with less than ideal work spaces, it takes more labor hours to stock the shelves since all product delivered cannot be put out, creating inefficiencies.
No. We will continue selecting product for JLF in the way we always have, consistent with our purchasing policy. We serve over 1,000 owners and the wider community. Among those thousands of owners and shoppers are a variety of opinions about products. We observe our sales closely to determine what products our owners want to purchase. Our goal is and always will be to meet the needs of our owners while staying true to our mission. JLF does not have a strategy of bringing in more conventional food, we have always sold conventional food, such as locally grown produce, dairy and egg products which are not organic. We do have many members who cannot afford organic food, so we are mindful of their needs by choosing good quality products.
Yes, an expanded store is financially viable. Once the expansion is completed, our sales are projected to jump from our current $1.7 million annually to $6 million within 3 years. The expansion will also encourage growth in ownership, create approximately 35 jobs over three years and boost neighborhood and community building. We completed a market study that supports the size of the project. If you are interested in making a loan you will receive information containing financial information, we are willing to discuss them with you in detail.
Yes! We launched our Capital Campaign May 8, 2017. Our goal is to raise $750,00 in interest-bearing Class C Preferred Shares (and $750,000 in Owner Loans) by June 30, 2018. Just Local Food Co-op Class D Shares are a non-voting, preferred stock only available to JLF Owners who are valid residents of Wisconsin. Class D stocks offer a dividend of 3% with a minimum investment of $500. An equity investment from owners helps leverage the support of our local bank and community development agencies who seek to invest in our project. If you are interested purchasing Class D Preferred Shares, email: firstname.lastname@example.org or call Maria at: 715.552.3366.
Yes. For some households, temporary conditions limit their current lending ability. Arrangements can be made for a second loan in the future.
Some owners have made loans by moving money within their savings portfolios rather than taking it out of current spending. Others have used resources available through home equity lines of credit. Installments may be an option and can be discussed on an individual basis.
Why is an owner loan or preferred stock needed? The co-op needs start-up funds. Funds to start the store come from ownerships, owner loans, preferred stock, donations and outside loans. Owner loan programs and the sale of preferred stock are long-standing methods used by co-ops to raise money and community support for their stores. They demonstrate the existence of a loyal customer base and reduce debt service making the business stronger.
All of the legal documents have been reviewed by an attorney experienced in co-op law and we understand they are appropriate.
One of our business development consultant has experience with hundreds of co-ops across the country, and his experience is that 90% of co-op loans are repaid on time and 95 to 98 percent of loans are repaid to the lenders.
To be sure the Co-op is able to repay owner loans, the loans are scheduled to come due over 5 or 10 years.
As a cooperative grocery we do not have to support a corporate office or stockholders demanding maximum return on investment. Our commitment is to our owners and we intend to provide fair pricing and a fair return on investments. Just Local Food Cooperative will emphasize locally produced products to help stimulate local agriculture, eliminate the impact of long distance shipping and cycle money through the local economy. Just Local will emphasize naturally produced and organic products raised without the use of chemicals, genetic modification or antibiotics and with due consideration for impact on the environment to provide tastier, more nutritious products. We believe our co-op will be a good value in addition to having sound values.
Just Local Food is more than a grocery store: it is a community owned business that provides convenient access to fresh, local, organic and healthy food and products while also providing opportunities for education and continued learning. It will be a community hub and will drive increased investment and positive development in our community.
We hope to open as early as Fall 2018.
We have over 1,000 owners, our goal is to reach 1,500-plus owners before the store opens.
Intensive planning for Just Local's new store started in early 2016. Since then the ownership has grown and we have worked with several expert co-op consultants to provide guidance.
We are very confident of this. With very realistic assumptions we show the potential of profit by the second year of operation. The intent is that the Co-op will have the ability to generate profit so that we can provide additional services to the membership and the community. Future decisions will determine how the funds are used. Some of these actions may include enhancement of the services offered in the store; expansion of the store; reduction of prices; increased refunds for members; increased wages or investment in community projects. The membership, through the board of directors, will make the decisions about these actions.
Yes. Assuming that we obtain all of the sources of funds described in this Disclosure Statement, we believe that the proceeds of this offering will be sufficient to fund the Co-op's expansion plans and capital requirements. Although we expect to obtain the other financing described, we do not yet have any binding commitment for such loans and tax credits. The Co-op cannot assure members that such financing will be available to the Co-op on favorable terms or at all. Likewise, if the Co-op does not obtain sufficient proceeds from this offering, the Co-op may not have sufficient funds to undertake the Co-op's expansion plans and the Water Street project and your investment will be returned.
There are a lot of expenses to opening a new grocery store from scratch. If you would like a more detailed breakdown, we would be glad to send you the investment packet which has some financial info in it.
We are holding it in a separate account from our operational (day-to-day) funds. When we've reached our criteria for moving forward we may begin to use the money to build our store.
The money will be used for all the expenses required to build a new store. Design, legal, consulting, administrative, mailings/copying, new equipment, new inventory, staff, and operating capital. There is more info in the Investment Packet.
If we don't raise enough money we may not be able to build our new store. But we think we'll reach the goal if you will help!
Yes. Co-ops around the country have been raising money from their owners in order to expand or build new stores. We think our owners will be motivated to invest in order to get a wonderful, full-service grocery store as well as earn a dividend (a number of co-ops across the country that have raised $1 million or more in less than 2 months - let's do the same!).
Unfortunately, we have very little time to secure the financing and move forward, and if we lowered the minimum, it would take us much longer to raise the money. There are a number of ways for you to participate:
We intend to, as much as our local codes and budget will allow.
There are ways, with certain restrictions, for you to make charitable donations that will be used for the co-op to build its store. If you are interested in this, we would be happy to discuss. Send an email to email@example.com or let someone at the store know you are interested and they will pass off the information.
You should not expect to get the money back early. You can contact the board should you have an extreme circumstance, but share redemption is always at board discretion