Frango Frenzy: Canadians Make An Offer

Purdy's wants Frangos.

Vancouver, B.C.-based R.C. Purdy Chocolates Ltd.'s president, Charles Flavelle, says his company wants to buy Frangos and has been courting both Frederick & Nelson and Chicago-based Marshall Field & Co. since mid-December.

During the past three months, Flavelle has made at least 20 telephone calls to the two companies attempting to cut a deal to buy the Frango's franchise.

Both F&N and Marshall Field would be involved in any sale because the Frango trademark is owned by Marshall Field, but is licensed to F&N for regional production. Purdy's hopes to assume F&N's license to Frangos from Marshall Field, Flavelle says.

"We're in a position to try and put something together . . . Frangos is a great product," he says.

Although Purdy's has never purchased another candy manufacturer, Flavelle is certain Frangos would be a good fit. "Frangos is a unique product. It has strong regional appeal, and we are a regional company. It's a good fit," he says.

So far, however, the decision from the sellers has been no decision; and Flavelle is a little baffled. A buyer needs time to make a smooth transition, he says. Frangos' marketing cachet could be damaged if production were to shut down before a decision is made, he says.

F&N's management has not yet made a decision about the future of Frangos manufacturing, Dave Fisher, an F&N spokesman, says. A number of interested parties have contacted F&N about buying

Frangos. For now, F&N will continue producing and selling Frangos throughout the retailer's liquidation sale, he says. Fisher would not specify what other parties are interested in acquiring Frangos or when F&N might make a decision.

Frangos have been selling well in the liquidation - without any discount.

If Frangos does go on the auction block, the high interest could create a bidding war, but Purdy's would probably remain a contender, Flavelle says. The company is willing to pay a fair price for Frangos, and Purdy's is strong financially, he says. Flavelle would not say how much Purdy's is willing to pay to acquire Frangos.

If the Canadian chocolate company buys Frangos, it would keep production in the Seattle area, Flavelle says. The people, equipment and suppliers are all concentrated here, he says. Purdy's would distribute Frangos through its own existing candy stores in both Washington and Canada and through distribution agreements with other local retailers, Flavelle says. No specific agreements with retailers have been established.

Bernard Garbusjuk, genaral manager of Boehm's Chocolates in Issaquah, thinks Purdy's would be a good buyer for Frangos. "Purdy's is one of the more solid candy companies on the West Coast. Purdy's has a good name. They are good operators and smart people, and they have the money to hang in there," he says.

Purdy's could afford to initially lose some money on Frangos, if that were necessary, Garbusjuk says. He has been concerned that Frangos will be sold to investors with no staying power.

Garbusjuk says Purdy's does need to watch out for new competition. Making a Frangos-style candy is no secret; any candymaker can do it, he says. To take advantage of Frangos' marketing momentum and the uncertainty surrounding its future, rivals might create a boxed candy that looks and tastes like Frangos. .

Purdy's has operated in Washington for 12 years. The company has five stores in the state, including Westlake Mall, Bellevue Square, Southcenter Mall, Everett Mall and Bellis Fair in Bellingham.

"We are well located in Washington state," Flavelle says. The 85-year-oldPurdy's, which is privately held, operates a total of 41 other stores throughout British Columbia and Alberta.