FAQ Page

How is the Co-op Different?

  1. How is Columbus Food Co-op different from other grocery stores in our community?

    We are lucky to have numerous, high quality grocery stores in our community. A Co-op is different from the other stores because it contributes to the local health, education, access and economy.  A Co-op’s priority is to serve the community in which it lives and bridge the gap between local access to farm fresh food and consumers year-round. There are numerous differences but let’s focus on two main ways Columbus Food Co-op is different from conventional stores and you can learn more about by visiting our website. First, a co-op is locally owned by YOU. Community members own shares in Columbus Food Co-op which allows owners to make decisions on behalf of the co-op. Owners get a VOTE. Second, our goal will be to stock local items on the store shelves. We live in some of the most fertile soil in the country, yet most of our food is shipped in from thousands of miles away. Columbus Food Co-op will source locally whenever we can--that means you'll be able to find hundreds of local products including produce, meat, dairy, honey and even baked goods at YOUR co-op! When the Co-op says local it means within a 100-mile radius of our location.  
  2. How will you be able to compete with other grocery stores?

    We will have different and broader offerings than other local grocers – their emphasis is on price and variety within the high volume mainstream. Columbus Food Co-op will emphasize locally produced products to help stimulate local agriculture, eliminate the impact of local distance shipping and cycle money through the local economy. Columbus Food Co-op will emphasize naturally produced and organic products with due consideration for impact on the environment to provide tastier, more nutritious products. Columbus Food Co-op will provide educational services allowing shoppers to make better, informed and more healthful choices.  Columbus Food Co-op’s priority is to offer local so our inventory of local products will be significantly larger than what is offered in other groceries.

The Co-op's Success

  1. Can the Co-op be financially successful?

    Yes. A professional market survey produced a solid sales forecast used in financial projections prepared by the board of directors with the assistance of Cooperative Development Services. The result is a successful business projection. If you are interested in further details about our business plan or sales projections we would be happy to review those with you in detail.
  2. Where did you get the numbers in your business plan?

    The numbers in our business plan come from our financial pro forma - a very detailed estimate of income, expenses, revenue and other items. The pro forma format was originally created by industry experts at Cooperative Development Services, and is used by co-ops across the country but customized to the Columbus market. We have used this format for the last six years to develop and refine estimates for every site we have considered. Our projections begin with industry averages and are refined over time as we develop more exact estimates. Some concrete numbers, including our lease, are included and reflect actual projected costs. As the project develops and we engage the services of store designers, architects and contractors these numbers will become more and more concrete.
  3. How much operating capital have you built into the pro-forma and for how long?

    For the size and scope and risk of this project, experts recommend having at least $150,000 of working capital available throughout the first 10 years of the project. Our current financial projections include having an average of $286,000 in working capital every year for the first 10 years of operation.
  4. How will Columbus Food Co-op's location assist the local economy?

    Co-ops are a critical part of local neighborhoods and economies because they are owned by community members who care about where they live. Co-ops are a community resource, a place where people gather, learn and grow. Co-ops on average donate more to the local community (13% nationally) compared to conventional grocery stores (who donate on average 4%). A co-op on average purchases from over 100 local farmers and producers and for every $1,000 spent at a co-op $1,600 is generated in the local economy.  Also, our physical location serves an underserved population and our City’s neighborhood surveys show that the neighborhood is asking for a healthy grocery store that is within walking or bicycling distance. Our local food study shows that 30% of the region experiences low food access. The Co-op’s physical location and educational outreach will help to address nutritional food access.
  5. How will the Co-op affect other local grocery stores?

    Columbus Food Co-op believes that the rising tide raises all ships. Our feasibility study indicates the demand for fresh, local organic products far exceeds the current supply in our community. In addition, we have seen a steady (double digit growth) in demand for organic products over the last 10 years. Our belief is that all local vendors will continue to benefit from the increased demand for these types of products. The Columbus Food Co-op’s goal is to make local a priority and supporting our local farmers and vendors differentiates us from traditional grocers.

The Co-op's Priorities

  1. A Cooperative is guided by values

    according to 7 principles that give back to the community it serves.  Visit this link to learn about these principles.  http://www.columbusmarket.coop/whats_a_coop.

  2. What if I'm a local farmer or producer, can I sell my products at Columbus Food Co-op?

    Columbus Food Co-op is currently keeping a list of potential vendors/suppliers.  You can find this list under Hometown Food Guide. If you are interested in being included on that list, please contact info@columbusmarket.coop. Once a General Manager has been hired, this list will be turned over to the GM who will initiate an application process, which will likely include a farm/facility inspection. The GM will make the final determination on what products are offered in the store and add them to the hometown food guide.
  3. Who will be selling their food at the store?

Columbus Food Co-op is collecting a list of local vendors who will be providing food to the store. If you'd like to be included on this list, please contact info@columbusmarket.coop.

Your Ownership

  1. What kind of benefits will I have if I become an owner now?

    Owners have a voting right. Owners now will have an impact on more of the logistical aspects of the store. Moving forward owners will have the opportunity to provide feedback on the shopping benefits owners will receive, the products we stock in the store including defining our product standards. Once the store opens, Owners will receive perks such as “the first to know specials and events”, “Owner specials”, etc.  When the store experiences surplus, dollars are invested back into the store and shared with owners.
  2. I’m already an Owner, how did you spend my $90 ownership?

    Ownership is a $90 commitment and we have utilized owner equity ethically, frugally and are committed to spending owner equity only when absolutely necessary. The Co-op has been operating as a business since 2010, experiencing both revenue and expenditures to sustain the business. As an owner, you have the right to know how your money is being spent and can attend our annual meeting for a detailed financial report or request a meeting with a co-op board member to discuss financial information.
  3. If I'm not yet an owner can I become an owner now?

    Yes, we are always accepting ownership applications and we'd LOVE to have you! We have been experiencing owner growth since inception.  To become an owner sign up here.  
  4. Isn’t my ownership enough? Why is an owner loan or donation needed?

    The co-op needs startup funds. Funds to start the store come from a combination of ownerships, owner loans, donations, outside loans and grants. Owner loan programs 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.

Making the Co-op Possible

  1. How can I give to the Campaign to bring the Co-op to open its doors?  

    Owners have a unique opportunity to provide a loan. Loans are paid back to owners with interest based on the term and amount of loan. Loans must be made at a minimum of $1,000. If you are not an owner, we hope you will consider becoming an owner.  However, anyone can donate and receive tax benefits for doing so. We accept any amount, but due to fees passed on from our fiscal sponsor, we do ask that you consider a minimum of a $500 gift. Owners can also purchase non-patronage certificates in $50 increments.  See details below *.
  2. What if I don’t have cash immediately available?

    The Campaign will run until May 15, 2018, which means that you can make a loan or donation pledge if you have funds available by the close of the campaign. Full loan payments and donations are needed to secure pursuit of the remaining funding from banks.
  3. What legal assurances have been put into place?

    Owner Loans are legal in the state of Indiana. We have contracted with an attorney familiar with both Indiana and co-op specific law and are confident that we are in compliance with all pertinent state laws related to our campaign.
  4. What is the likelihood that the loans will be repaid?

    It is important the lenders read the disclosure statement and understand the risks involved with a loan to Columbus Food Co-op. The success rate of a typical retail establishment is 47% after 5 years. A typical co-op's success rate after 5 years is 79%. Columbus Food Co-op has enlisted the assistance and advice of industry experts in preparing our financial projections. Our feasibility studies show positive projections that will allow us to begin loan repayment in year 5.
  5. Can I make a loan now and still make another one later?

    Yes, multiple loans can be made during the campaign (through May 15, 2018). Making your loan during the campaign helps us meet our timeline and demonstrate the support we need to assure commercial lenders. Loans made outside of that timeframe would be accepted, subject to board approval, but would not help us receive commercial lender approval.
  6. Why is it necessary to have the terms of the loan so far out?

    To provide the best assurance that the co-op will be able to repay the loans, the loans are scheduled to come due over 10 years with repayments starting in year five. This spreads the repayment period over a longer term enabling the co-op more flexibility during the typically lean first few years of business.
  7. How many co-ops have done owner loan campaigns and what is their success rate?

    Cooperative Development Services states that 100% of co-ops they are associated with use capital from owners (or owner loan campaigns) for startup or expansion projects. Owner Loans have proven to be a successful way to raise capital in the co-op industry. A co-op's success rate after 5 years in business on average is 79%.
  8. Can I pay my loan in stocks?

    No you cannot pay your loan in stock. The legalities of such an arrangement make it difficult and costly, therefore we've decided that loans must be made via check or cash.
  9. Can I pay my loan via credit card?

    No, you cannot pay your loan with a credit card.  The fee's associated with credit card processing at these dollar amounts make it an unreasonable form of payment for an Owner Loan Campaign.
  10. How is interest compounded?

    Interest is compounded annually and awarded at the culmination of the loan.
  11. I can’t make a loan until X date (after the campaign ends). Can I still make a loan then?

    The campaign is structured to give all owners equal opportunity during the course of the campaign to make a loan, so it is preferred that all loans take place during the campaign timeline (September 13 – May 15, 2018). Please contact us to discuss your individual situation.
  12. I really believe in the co-op, but I can only put together $500. Can I make a loan that is less than $1,000?

    The minimum loan amount we can accept is $1,000. If you would like to contribute to the mission of the co-op at an amount less than $1,000 we encourage you to make a donation or purchase non-patronage certificates in $50 increments with no maximum purchase amount required.
  13. I'd like to participate, but I'd prefer to make a donation and not a loan. Is that possible?

    Yes absolutely that is possible.  We offer the opportunity to make a tax-deductible donation by making your check payable to our fiscal sponsor:  Tax-deductible donations are routed through our fiscal sponsor.  Checks should be made payable to the Cooperative Development Fund of CDS.  (Please note “Columbus Food Co-op” on the memo line.)  
  14. What are Non-Patronage Certificates?

    A Non-patronage Certificate (NPC) is a share of equity in the Co-op for which the owner is not entitled to any patronage dividend nor any additional voting privileges but does retain the possibility of repayment. The board has no obligation to repay NPCs. Conservative projections indicate that the Co-op will generate sufficient earnings to redeem the NPC’s and pay any declared interest in years 9 and 10 of operations.  The Board of Directors may, at its discretion, declare interest on NPC’s.  NPC’s may be paid back, with any declared interest, at the discretion of the Co-op’s Board of Directors.
  15. Why would I choose a Non-patronage Certificate over a loan?

    First, NPC’s can be purchased in $50 increments, which is significantly lower than the minimum loan required ($1000). Second, an NPC may be attractive to Co-op owners who want to support the Co-op, but who are not concerned about receiving interest or repayment.  (While the Co-op projects that NPC’s will be paid back, beginning in year 9 of operation, there is no obligation to repay.) An NPC shows up on our balance sheet as equity (which is more favorable to banks) and a loan shows up as a liability (which isn’t perceived as favorable in the banking industry).
  16. So I can make a loan, a donation or purchase an NPC. What is the best option for the co-op?

    The answer is dependent on the amount of the contribution. The following assumes the contribution is of an equal amount in all options. By far the best option for the co-op is an unrestricted donation. The second best option would be to purchase NPCs and finally the next best option would be to make a loan to the co-op.

The Co-op's Financial History

  1. I already made a loan. Has the money I loaned been spent?

    During the process of finding the best possible location for the Co-op, we entered an agreement to lease space on 25th St. A lease was held for a year, but after extensive evaluation and due diligence the board elected, in the best interest of it’s owners and the long term sustainability of the Co-op, to opt out of the lease rather than pay additional holding costs to retain that location. In the interim, the board has judiciously and frugally utilized funds necessary to move the project forward. The Co-op has been operating as a business since 2010, experiencing revenues and expenditures as any business does. The Board has acted as responsible stewards in only investing in what is needed to sustain the store and demonstrate the long term success of the store by way of legal fees, feasibility studies, marketing, store design, business plans, etc.
  2. I already made a loan (during the last phases) and wonder what will happen to my loan if for some reason the co-op doesn’t get built?

    If the project does not move forward, the Board will make decisions about the next steps. Possibilities include A) Renegotiating with current property owners; B) Beginning the search for another site; C) (last resort) dissolving the co-op. Please see our example further defined in addendum B “FAQ:  What happens to my money if we don’t reach our goal?” If a search for a new site is begun, funds collected in this round would be redirected towards the costs of finding and preparing that site.  
  3. How much was raised in the first phases of the capital campaign?

    In Round 1 (2011-2012), we raised $151,000 in owner loans. In Round 2 (2015), we raised $204,200 in owner loans and $31,050 in non-patronage certificates. In the current campaign we have raised $107,000.00.
  4. If I didn’t make a loan during the first phases of the campaign why should I consider a loan now?

    You should consider making a loan now for several reasons. First, we have a new site with a landlord who is in tune with the co-op business model. In fact our landlord is a Co-op owner. Second, we’ve increased and provided consistent communication as we should have and we’ve committed to communicating with owners at least monthly via an email updates. Finally, we’ve secured expertise to help us open our co-op. We have seen significant owner growth and have hired an outreach manager to continue to focus on owner growth. In addition to the outreach coordinator we’ve sought the expertise needed to make this campaign successful including a capital campaign chair with a track record of successful campaign management, as well as industry experts to point us in the right direction, including working with CDS consulting to make sure our finances and projections are accurate and that our store design is effective and efficient. In addition we’ve enlisted the services of an expert who has successfully planned and implemented a record-breaking owner loan campaign at Green Top Grocery in Bloomington, IL.
  5. How is the Co-op a good investment in our community?

    The Co-op is a good investment in your community and will have a positive impact in the community because we focus on health, education, sustainability, support for local farmers and will make a strong economic impact.  We are moving in the right direction. NOW is the time to consider a loan or donation to CFC.
  6. Where will my dollars go if the store doesn’t open?

    This is one of the most common questions we have received.  Because the Board is committed to seeing this store through, as promised to many that have already invested, and because many who have not yet invested have told us they would like to but are concerned about meeting our goal, the Board has created an option for owners/donors/investors to make a pledge to the campaign. Your pledge will allow you to sign an agreement stating the amount you would like to loan or donate when the campaign goal is met on May 15, 2018. We believe pledges will, in fact, get us to the goal and at the same time give those concerned the confidence to make their commitment/investment. Answering concerns and providing confidence is our objective and and what we believe will get us to the final goal .  Show your support with a pledge today.

The Co-op's Location

  1. Why did you select this location?

    This selection was chosen because it meets all of the criteria important to our owners and long-term success of the store. It is centrally located and very visible.  It’s walkable, bikeable, near the trail, on bus routes, has parking accessibility and provides access to fresh healthy food for an underserved area of our community as well as the general public. This location allows us to bring access to fresh, local, healthy food for our community and specifically answers the demand from the Central Neighborhood who indicated, from surveys conducted by the City, that they wanted a healthy food grocery store.
  2. How did you select this location?

    Our first step was to gather input from owners. We hosted in person informational sessions to get feedback from our owners and conducted online surveys regarding the location. We then looked at locations based on the feedback we received from our owners and narrowed our selection down to two sites. From there, we evaluated the sales potential, financing, community support and grant opportunities available at each location and determined that the Bloomington location allowed for unique access to grants and other funding mechanisms not available at the Normal location.
  3. Who made the final decision on the store location?

    The Board of Directors made the final decision taking into consideration input from owners.
  4. How many locations did you look at?

    The Board of Directors looked at several locations over the last 7 years but ultimately it came down to what owner’s wanted, cost, financing, the long-term success of the store and feasibility.                                                                                                                       
  5. Did you hire any outside firms to help make this decision?

    Yes, feasibility studies were conducted by industry experts to confirm the right location and financial projections that are sound and well founded.   
  6. Was this location your first choice?

     No, but we believe this location was worth the wait as it provides excellent visibility, access and is in a neighborhood that serves  a demographic that according to city surveys, shows demand for healthy food access. This location also meets the criteria important to our owners and provides with with a financially sound business plan. As an added benefit, the land owners are Co-op owners and have provided in-kind contributions and support toward our goal in building the store.
  7. When do you anticipate the store opening?

    We anticipate the store will open in 12-18 months from May.  However, it is important to keep in mind that this timeline is contingent on our financing and a seamless construction process.  
  8. How much will the project cost to complete?

    The total project cost is approximately $2.3 million.  This includes build out of the store, equipment, inventory and staff. However, we are only required to raise 30% of the total project cost to demonstrate commitment to the banks in order to pursue traditional lending.
  9. What’s the square footage?

    Columbus Food Co-op will be 8,400 square feet, with approximately 6,000 square feet of retail space.
  10. Will there be parking available?

    Yes, there will be ample parking to meet the requirements suggested by co-op experts in this field.  
  11. Is this location accessible to all modes of transportation including walking, biking and public transit?

    Yes, the location has access for walking, biking and will have bike racks, is near bus routes and has ample parking. The bus lines pass this location daily.  The City of Columbus is in the midst of planning to further improve bike and pedestrian infrastructure in the area.
  12. Are there other tenants in this development?

    Yes, we have been very pleased with the additional tenants that have helped to revitalize the development. We will say that we are very excited about the partnership between Columbus Food Co-op and the Counsellors and look forward to the retail synergy created in this location.
  13. When will construction begin?

    We anticipate that the groundbreaking will take place after financing has been secured-likely summer of 2018.  
  14. How are you selecting contractors for the construction?

    Who will be doing construction work? The actual construction of the building located at 1580 Central Avenue will be handled by the site developer.
  15. Will you be posting updates about the construction?

    Yes, to stay up to date on how the project is progressing, like our Facebook page, follow us on instagram and twitter.
  16. Once the construction is complete, when will I get to shop there?

     As soon as construction is complete Columbus Food Co-op will train our staff and stock the store as quickly as possible in an effort to get the doors open within the 12-18 month time frame we've allotted.

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