Prairie Food Co-op Community Grocery

FAQs

What is a co-op?

A co-op is a member owned and directed enterprise that operates for the mutual benefit of all owners and others in the community. Prairie Food Co-op will be a full service retail grocery store operating as a cooperative business.

When and where will Prairie Food Co-op be opening?

We’re as anxious as you to see our grocery store open in Lombard! At 800 Owners, we can sign a lease, announce the site of our store, and begin the search for the store’s General Manager. At 1,000 Owners, we will begin our owner loan campaign that will give Owners a unique opportunity to invest in their community. On opening day, we project to have 1,500 Owners. Our opening date depends how quickly we reach these numbers and how long construction takes once we finalize a site, but we are hoping to open our store as early as Fall 2017.

If anyone can shop at the co-op why become an owner?

Anyone can shop at the store but the co-op needs owners to provide a financial foundation for the store. Without Owners, Prairie Food Co-op cannot open.

Owners provide community support for the co-op. Their investment in buying a share and their involvement make the co-op possible. Also owners receive specific benefits — they vote for members of the board of directors of the co-op and on other matters brought before the ownership. Owners will receive patronage refunds when the Co-op becomes profitable. They will receive owner-only discounts and owner-only newsletters.

How will Prairie Food Co-op be different from other grocery stores?

Prairie Food Co-op 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.

How will you be able to compete with other area grocery stores?

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. Prairie Food Co-op will emphasize locally produced products to help stimulate local agriculture, eliminate the impact of long distance shipping and cycle money through the local economy. Prairie Food Co-op 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.

What has the co-op done so far?

Planning for Prairie Food Co-op started in Fall 2012 when a small group began working to open a co-op in Lombard. Since then many more volunteers have signed on, the ownership has grown and we have worked with cooperative business development experts to provide guidance. To date, the Board has commissioned a market study providing sales forecasts for a 5-year period, created financial statements showing feasibility over a 10 year period, and completed an initial business plan that has impressed national cooperative lenders. The resulting data confirms to the Board that Prairie Food Co-op can be successful.

How much does it cost to become an owner?

$200. This amount purchases one voting share of Prairie Food Co-op. It is not a subscription or a recurring fee. This share conveys ownership benefits to all members of the household. If you are unable to pay the full cost of ownership now, pay as little as $25 and enter the Installment Plan, making monthly payments until the full $200 ownership fee is paid. 

How do you know the co-op will be financially successful?

We are very confident of this. We have worked with highly-regarding financial analysts to complete a comprehensive set of financial statements (otherwise known as a financial pro forma) that project profitability by the 3rd year of operation. Our financial pro forma uses real data from over 45 existing food co-ops to predict financial outcomes for Prairie Food Co-op. The intent is that the co-op will have the ability to generate profit so that we can provide additional services to the ownership 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 owners; increased wages or investment in community projects. The ownership, through the board of directors, will make the decisions about these actions.

If I purchase an Ownership share and for some reason the co-op doesn’t open a store, do I get my money back?

If the co-op ever goes out of business its assets will be liquidated and funds will be used in the following order: liabilities will be paid and the remaining cash will be distributed to shareholders. It is unlikely that all of an owner’s investment could be returned if the Co-op ceases operation before the store opens because some expenses will have been incurred and no income will have been received. We researched existing co-ops and built pro forma financial statements to confirm for ourselves and for potential Owners that a store can be opened and be successful. We have a high degree of confidence in the future of the Co-op and yet the investment has risk.

Will the co-op need money in addition to Ownerships?

Yes. Prairie Food Co-op will conduct fund-raising, seek loans from Owners and borrow money from outside sources. Success in all of these depends on having sufficient Ownership so they are the fundamental source of capital and the foundation of the co-op. For a more comprehensive breakdown of the costs associated with opening a full service cooperative grocery store, click here.

Most new businesses fail. Why will the co-op be different?

We have looked at the reasons businesses fail and have tried to anticipate them. For example, one of the most frequently cited reasons for small business failures is being under-capitalized. We propose to seek adequate start-up funds to carry the Co-op through its early period and to have flexibility to make adjustments to become successful. We are striving for a business that has sufficiently broad appeal that it will attract enough volume to be successful while at the same time we are mindful of the need to start small enough that we can raise adequate capital.

Will you have paid staff?

Yes, we are planning on having a full, professional staff.

Will Prairie Food Co-op be non-profit?

No. Prairie Food Co-op is a for-profit business that operates as a cooperative. This type of business makes a profit but returns a portion back to its Owners as a patronage refund. Contributions to Prairie Food Co-op are not tax deductible. On the other hand, Prairie Food Co-op will not be profit-driven. Some businesses exist to earn a profit for their owners. Cooperatives exist to provide a service to their owners. A well-run Co-op needs to be able to earn a modest profit. This profit allows the Co-op to invest in the growth of the business to better serve its member-owners, to invest in the community or to take other actions consistent with its mission. The board of directors working with all the member-owners determines these actions. Importantly, the ability of a co-op to earn a profit for its Owners means that it doesn’t take resources from the community in order to serve its member-owners but rather the Co-op generates economic and other value that is returned to the member-owners and the community.

Invest in a place to shop that you can call your own.
Together we really can do this.

BECOME AN OWNER