Frequently Asked Question
General Questions/About HFC
What is a food co-op?
Food co-ops are especially awesome grocery stores! They provide products and services like many other grocery stores, but the business model and the guiding principles are different. A co-op exists to serve people, especially the members and the community. Co-op members are actually the owners of the store, and it is the owners who democratically choose the board of directors and help make other decisions that determine the path of the co-op.
This business model makes it possible to exist without the goal of rewarding outside investors. Instead, surplus revenue can be returned to owners in the form of patronage dividends, or it can be used to invest in the co-op to make it an even more awesome place for the owners and the community. Co-ops value people.
For over 30 years, food cooperatives have focused on providing their communities with high-quality, local, socially responsible, organic, and sustainably produced food.
For more information regarding co-ops, check out the following pages and sites:
- Food Co-op Inspiration (Includes 270 images from co-ops across the US and Canada)
- Stronger Together
- NCGA
- Food Co-op Initiative
Will the Co-op be like a buying club or a farmers’ market?
No, the co-op will be a brick-and-mortar grocery store open most, if not all, days of the week. You can see what food co-ops across the nation look like here.
Is the Hillsboro Food Co-op (HFC) a new endeavor?
No! We’ve been working to bring our vision of fresh foods and community to life for over 10 years! Our momentum is growing and there’s never been a more exciting time to join the movement.
How big will HFC be?
We know the space will be about 17,000 square feet. Once you take into account back areas, prep areas, etc, we are estimating the retail space to be about 13,000 square feet.
How will Fresh Foods/HFC source foods to meet the dietary needs of an incredibly diverse community?
We love how diverse Hillsboro is and we are aware that comes with a lot of dietary needs. While Fresh Foods knows how to maintain relationships with a variety of suppliers so we can need everyone’s needs, there will be a lot of outreach to shoppers to ensure we are meeting our community’s needs. We also have Hillsboro’s demographic data, as well as a market study HFC did. We will combine the data from these efforts and adjust as needed for the community.
Focusing on ‘local’ and ‘community,’ are you taking any consideration to the people who’d want to bike to HFC?
Our goal is to support people who also want to bike to HFC instead of driving under 2 miles to get groceries. That’s one of the reasons we chose the location for HFC. We are planning on having a sidewalk drive up area and a covered parking area for bikes.
What makes co-ops different from other grocery stores?
There are many differences, but here is a start:
Co-ops are democratically controlled, and they exist to serve their members and the community, not make a profit. Co-ops are generally able to operate while following strong ethics and values. Plus, they can connect with some small, local farms that are unable to sell products at a larger grocery store!
Where do profits go during profitable years?
Profits stay put in our community! Surplus revenue is returned to member-owners in proportion to how much they use the Co-op through patronage dividends. Due to the history of cooperatives in the United States, tax code has been written so that neither the co-op nor the member-owner is taxed on these funds.
Who is actually going to run HFC logistically?
All food co-ops are run by a general manager, who oversees day to day operations. In our case, the LLC will hire the general manager. The LLC is made up of two parties: HFC and Fresh Foods, and will also be governed by a board of directors, separate from the HFC board of directors. This ensures both organizations are being represented in the big picture decisions.
How will HFC owners and board members affect the management of the future store?
Even in standalone food co-ops, neither the board of directors or individual owners are responsible for day to day operations of the store. There is a general manager that handles the management of the store, and the board ensures that the manager receives input from owners and guides the big picture direction. This will still be true for the HCF/Fresh Foods partnership, with the exception that we will have one more party helping us make decisions, and carry the load of running the store. Our mission and values are the guiding principles by which all parties will make management decisions.
Will HFC employees have a livable wage?
HFC and Fresh Foods aim to compensate employees not only with wages that reflect our current time but also with benefits (medical, dental, vision, life insurance, 401Ks, and bonuses).
What is HFC’s goal for the Capital Campaign?
We need to raise about $2.5 million, coming from new owner members, grants, owner loans etc. If you have experience fundraising, we would love to have you as a volunteer! Fresh Foods will be providing another roughly $2 million, putting us in a pretty equal split.
Isn’t a co-op the same as a nonprofit?
This is a common misconception, since a co-op is an alternative way to run a business. Co-op is short for cooperative. In our case, we are a cooperatively community-owned store. The goal of the store is to make profit, because that money gets reinvested back into the owners (you could be an owner!), as well as the community. Hillsboro Food Co-op is incorporated in Oregon as a cooperative, which is considered a for-profit organization. Traditionally, co-ops return profits to member-owners in the form of patronage dividends, and thanks to tax code written especially for co-ops, neither the co-op nor the member-owners are taxed on this money. While the Co-op is technically for-profit, it is member-owned and democratically-controlled, and it has a strong mission to serve the community and world, just like a non-profit organization.
What type of business organization is Hillsboro Food Co-op?
As of September 2013, Hillsboro Food Co-op is incorporated in Oregon as a cooperative business. Unlike most corporations, shareholders of the Co-op are community members who are investing in their community through grocery store ownership. Through the purchase a $200 member share, and individual becomes a Co-op member-owner. Member-owners have a say in the business decisions the Co-op makes both through voting in elections and by reaching out to the Board of Directors which is composed of elected member-owners who have volunteered to represent the whole body of member-owners. Additionally, the Co-op will return surplus revenue to its members in proportion to how much they use the Co-op through patronage dividends.
About Fresh Foods
Can you tell me more about HFC’s partner, Fresh Foods?
Fresh Foods has been in business for 26 years, bringing that expertise to the table, from store management to vendors to getting the best deals. They have 3 brick and mortar locations. Building on their success and grocery store expertise will allow us to get HFC up and running. Fresh Foods will partner with HFC under an LLC to run the grocery store. Even though Fresh Foods is not a food co-op, HFC will be.
Will the partnership with Fresh Foods last?
Fresh Foods has a history of being a successful store. They bring to the table institutional knowledge to help guide the business. We don’t know if they will be our partner forever. But our projection is that we are going to have a successful grocery store that we will continue to run in perpetuity.
Does Fresh Foods focus on community?
Fresh Foods is very involved in the communities they serve, from working with tribes near Seabrook, youth sports programs in Manzanita, and subsidizing school backpack programs.
Hillsboro Food Co-op and Fresh Foods Partnership
I’m still trying to understand what the partnership is…do they just stock the shelves and manage inventory?
HFC and Fresh Foods have formed a new, jointly owned legal entity (an LLC) to hold the store and business operations. While Fresh Foods brings operational expertise and an existing distribution network to lower the cost of goods, HFC remains its own business entity with a say in the store’s business and operations. A management committee consisting of both Fresh Foods and HFC members would be responsible for oversight of the joint venture.
Why does the co-op need a partner? Is it an option in the future to buy out Fresh Foods?
Reduced Risk: The partnership provides access to the operational expertise of a profitable, existing grocery team, and more initial capital to enable a larger store. A larger store can be profitable sooner. HFC’s previous pro-forma analysis of a go-it-alone smaller store predicted operating at a loss for the first 7 years. The partnership allows for a store roughly 20,000 sq ft, nearly three times the size of the 7,500 sq ft store HFC originally planned.
Location Access: By partnering, HFC has access to the Block67 location, a prime redevelopment location in downtown Hillsboro. Alone HFC would not be able to secure this location within the timeline of the developer, having not yet raised capital for investment.
Buy-out options: Yes, the board has noted that a partnership wouldn’t have to be forever; they can write in buy-out options or eventually use profits to open a second standalone location.
Is this gonna be a long-term partnership or will it eventually break up into one entity, owning and running the entire thing?
It is intended to be long term, where profits are split 50/50 and both HFC and Fresh Foods have members on the management committee of the joint venture. The agreement can include buy-out options, and dissolution terms allowing HFC first right to purchase the entire entity if the joint venture were to end.
Doesn’t the partnership with Fresh Foods keep it from truly being a co-op?
The Board acknowledges that the partnership results in the loss of complete operating autonomy. However, HFC will still operate as a cooperative internally, with member-owners choosing their own Board of Directors and receiving patronage dividends from HFC’s share of the profits. HFC would have representation on the management committee of the joint venture. Whether HFC has majority voting rights (51%, vs 49%) in the joint venture depends on the total amount of capital that HFC owners invest.
The partnership sounds wonderful!, but it seems like the two will be competing against each other, because aren’t both going to be selling similar fresh and wholesome foods?
Actually, the partnership is designed to prevent competition. If Fresh Foods and HFC opened separate stores in downtown Hillsboro, they would be direct competitors, which might force HFC to find a different location or risk failure. By joining forces, they create a single, stronger store. The joint venture would open a single store.
What’s in it for Fresh Foods?
Their current locations tend to have primarily seasonal business. By partnering with HFC, they would have stable year round business which would allow them to work on their own business goals. The partnership would be mutually beneficial.
What are the long term sustainability plans for HFC and our partnership with Fresh Foods?
The first measure of sustainability would be a successful store. To achieve that, we need to meet our capital funding campaign in order to build the store. Once the store is up, our partner is Fresh Foods. We would split the proceeds with Fresh Foods. However, HFC would have complete autonomy and discretion over our proceeds. Of course, we would still have our awesome owners and our visionary board of directors.
To Fresh Foods: Hillsboro and the surrounding areas have seen other local grocery stores not succeed. What lessons can we learn from those stores?
The first thing we would like to note is that none of these stores were a co-op. But there are still lessons to learn. For example, making sure the size of the store fits the community- if a store is too big, there is too much overhead and too many expenses. That’s one of the reasons Fresh Foods and HFC have completed so many studies on the right location for HFC and really taken our time getting this going.
Membership/Member-Owner
What does it mean to be a member-owner of a co-op?
As a member-owner, you own a member share in the Hillsboro Food Co-op business. This means that in addition to getting the products and services you need, you also have a say in the business decisions the Co-op makes. Additionally, the Co-op will return surplus revenue to its members in proportion to how much they use the Co-op.
Who can be a member-owner?
Any adult!
Will I have to be a member-owner to shop at the Co-op?
No, but we will not be able to open without a sufficient member-owner base! Most co-ops aim for 1,000 member-owners prior to opening a brick and mortar store.
How much does a member share cost?
A full equity share is $200 for one individual. The membership can be used by all individuals in the household, but only the member who signed up is allowed to vote in elections. There are also monthly and quarterly payment plans, and you can be a member for as little as $20 each calendar quarter until the full $200 amount is paid.
Why does it cost so much to join?
While $200 may at first seem like a lot, it is this initial capital that provides the groundwork to open our grocery store, and it takes a lot of capital to open a grocery store! According to the Food Co-op Initiative, most start-ups are setting share prices between $200 and $300.
Also, did we mention… For $200, you OWN your grocery store!
What will my money be funding?
Opening the co-op! Your money will help us to pay for legal fees, marketing material, consulting services, permitting costs, equipment purchases, and the many other costs that come with opening a business. Remember that your membership is a contribution to the capital of the co-op. By pooling our money together, we are able to continue the start-up process and continually increase our attractiveness to investors, credit unions, and matching grant programs.
Do member-owners have any financial liability for the Co-op before or after the store is opened?
No. Member-owners are not liable for the debts of the Co-op, beyond the amount invested in the Co-op through their member-owner share, or the amount owed by the member-owner for their share.
How do I become a member of the Co-op?
There are a few options to join the co-op. Join the co-op now!
What are the benefits of being an owner?
Owners have voting power to help shape the store as well as other benefits. The Hillsboro Food Co-op strives to offer competitive benefits similar to other food co-ops in Oregon and across America. These benefits may include dividends, special savings or deals for member-owners, coupons or discounts upon joining as an owner, owners communications including emails and annual meeting invites, just to give a few examples.
Vendors
How will HFC find vendors? Will there be any overlap with the Hillsboro markets?
We are still determining our vendor relations and have plenty of time to brainstorm and scope out ideas. Ideally, we will work with the farmers market vendors and offer them a spot on our shelves.
Get Involved! / Volunteering
Why volunteer?
For our funding and awareness phases, we are volunteer led. We are closing in on the next chapter of HFC but can only move as fast as our volunteers. More volunteers means getting closer to opening faster.
How can I volunteer?
We have something for everyone when it comes to volunteering! If you have a lot or a little time and passion for our community and food co-ops, please email [email protected] and click here (https://hillsborofood.coop/volunteer/) to learn about current volunteer opportunities or check out our social media pages for volunteer updates. We greatly appreciate the involvement of each and every member, big and small.
I have an idea, organization, talent I’d like to share with the community at HFC. Will there be an opportunity to do so?
We envision opportunities for owners to get involved with programming at HFC. That’s the beauty of becoming an owner- the more you’d like to put into it, the more you’ll get out of it. Some early ideas include the OSU Extension Programs like the Master Gardeners, owners teaching classes, and hosting other community centered organizations to build connections.
How do I learn more about HFC?
Come to outreach meetings, volunteer- this is a great way to get more involved in your community! Follow us on Facebook and Instagram to stay up to date, or visit our website calendar for upcoming opportunities.