Monthly Archives: December 2012

Service Industry Franchises Performing Well

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Higher employment and the recession have slowed existing home sales and have also spurred the surge of franchises especially in the service sector, which deals on fixing things.

From the Main St. to Wall St., recession-proof property owners and businesses needing skilled workers to construct saleable buildings have been benefitting from laid-off employees looking for job security.

Marketing and operations VP of Texas-based company The Dwyer Group, Doug Dixon stated that the new franchisees will probably increase between 25-30% in the current year compared to last year.

Dwyer, with 1,500 franchises scattered in 10 countries and 16 in the Massachusetts area earned a total of $77.5 million revenues in the previous year.  The company operates 7 franchise types – 4 in the area of Central Massachusetts, 2 Mr. Rooters, 1 Mr. Appliance, and 1 Mr. Electric.  Purchased by private equity corporations led by New York-based TZP Group LLC in 2010, its estimated value is $150 million.

The third quarter report of the International Franchise Association showed that the U.S. is home to 736,114 franchises, which employ over 8 million individuals.  The association indicated that the current year will see a rise in the number of franchise opportunities at approximately 1.5%, following last year’s decline.  Employment will then increase by 2.1%.

The Forbes magazine listed the 10 fast-growing franchises during recession and the list included McDonald’s, Dunkin’ Donuts, Subway, and Liberty Tax Service among others.

Kyle Ritchie from Worcester is the general manager of Mr. Rooter and Mr. Electric, two franchises owned by Dwyer.  The president is Stephen Ritchie, a plumber, and Kyle’s father.  They purchased the Mr. Rooter franchise last 2002.  Last year, they purchase the Mr. Electric franchise to widen their services.

Layoffs triggered the Dwyer growth with many of the unemployed individuals choosing to start franchises rather than looking for new employment and experiencing another layoff.

According to Mr. Dixon, home service franchise opportunities were unaffected by the recession.  There are many franchises available however home repairs still rank higher than retailing businesses related to purchases.

The list of Dwyer franchisees include electricians, landscapers, and plumbers who prefer a business of their own or do not enjoy working alone.

After doing demographic studies on the number of dwellings occupied by owners and the number of veterans, Dwyer has Worcester as the location with the vital growth.  Mr. Dixon stated that unlike in retailing businesses, house ownership is essential in the service industry because renters do not usually concern themselves with getting things fixed.  Worcester’s home ownership is above average.

Mr. Dixon indicated that veterans make ideal franchisees.

He stated that franchises and veterans go well as people who used to be in the service are into following rules, processes, and procedures, similar to an ideal franchisee.  Franchisees who know how to follow the processes are more likely to do well.

Franchisees receive tailored support in various areas including finances, management, marketing, and technology.  Mr. Dixon mentioned that franchise businesses experience higher success rate compared to independent stores as revealed by a number of studies.

Franchisees however are required to pay revenues to franchisers.

According to Mr. Dixon, individuals need to weigh the difference in cost between starting independent store versus getting such support from franchisers.  He stated that as franchiser, Dwyer continues to exhibit growth, which helps in selling franchises.

Aside from providing cost-related support, Dwyer also provides other services like brand name recognition, call center, social media access, and demographic analyses.

Make Your Franchise Successful

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Entering a business or one of the franchise opportunities can be tough.  If you believe the opposite then you should take a different route of expansion because your franchise business will only become a failure and you will not be able to make money out of it.

Among the biggest franchising misconceptions is that you only have to follow a certain formula in order to succeed. This belief is a myth regardless if you are a franchisor or a franchise owner.

The truth is, there are franchising elements included in every franchise model.  An example of this is the provision of support and training from most franchisors.  There should be a signed Franchise Agreement.  A franchise owner is given the right to utilize the business model and the brand name.  The support and training provided are entirely different from other brands, the same goes for the business model and the brand name.  Franchise Agreements have different clauses as well.

So if you own a business and looking for franchise opportunities, you cannot just simply follow the formula of another brand then anticipate the success of your business.

Your own business is unique, which deserves a franchise offering that is also unique.

So how will you make a franchising offer that is unique?  The answer is by hiring a skilled franchise consultant.

A skilled franchise consultant can assist you in every aspect of your business franchise, including the writing of manuals and recruiting ideal franchise owners.  The consultant will also guide you in expanding your franchise at a quick pace, which is necessary because if done too fast, you might not have the infrastructure needed for your network, but if done too slow, your franchise may end up becoming stagnant.

Franchise consultants will even assist you when the time comes for you to start considering international franchising.

A franchise consultant plays an essential role in the success of a franchise business, which means that choosing a franchise consultant must be taken seriously.

Asking the following questions prior to working with a franchise consultant can help a lot:

  • What brands did the consultant work with before and what was his track record?
  • Do you and your franchise consultant understand each other?
  • What are the ideas of your consultant in promoting your franchise?
  • Will the consultant assist you in manual writing and other needed documentations in business franchising?
  • Will your franchise consultant let you get in contact with franchise attorneys and other experts that can provide essential services to franchisors?

The franchise consultant must also be trustworthy to help you succeed in the world of business franchising for you to be able to make money.  This is the most important attribute that you should look for prior to hiring your own consultant.

How Franchising Helped One Couple from Reno

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Brita Ingstad and Greg Zrinyi dreamed of having their own bar and restaurant to make money however the lack of funds made them choose the path to being chocolatiers.

The two worked with Nevada Small Business Dev’t Center at University of Nevada in Reno on how to start a business such as a restaurant.  They gathered information, prepared the business plan, joined the competition, and met several bankers to apply for a loan to open a restaurant.

The couple went to meet with a banker suggested by Rod Jorgensen, management and counseling consultant director working for a small business center.  However they learned that banks are reluctant to lend funds to high-risk investments like restaurants.

The banking sector may be willing to provide loans to more established enterprises like the franchises however the banks are wary to commit to emerging independent food ventures because of first-year failure percentage.

Zrinyi stated that there are several food franchises out there for individuals who are thinking of venturing into this type of business just like they did.

A Colorado native, Ingstad chose to open their Rocky Mountain Chocolate Factory shop in the Reno area.  The venture’s international franchiser is based in Durango, Colorado and has the chocolate candies, dipped items, and caramel apples as its popular products.

Jorgensen assisted the couple throughout the whole process, which included the review of franchise agreements and the help with the lease.

The pair had to pay the startup fee of $24,500 and must be able to settle the 6% to 10% royalty sales.

The store opened in March of 2008 in the northwest of Reno.

About 60% of the store goods are handcrafted in the store location, which include the logo merchandise and other package items.  Chocolate bars and hot chocolate mixes come from the Colorado site.

Ingstad has made caramel apples that local consumers like since the franchise provides franchisees freedom to be creative.

She has also begun offering her confections during special events held in the town and not merely relying on the shop location to attract customers and make money.

Zrinyi stated that the various events in Reno become opportunities for small businesses to make it big.

According to Ingstad, the money earned during the special events is set aside to cover for the months without chocolate holidays.

Five years after the store opened, the two are breaking even.  Both are hoping that the following year will bring profit.

Ingstad shared that they have just started growing and expanding their business.

Currently, the store has four employees working part-time and sell products in four various places through mobile setup.

The couple still calls on Jorgensen for some opinion and answers on leasing concerns.

Zrinyi finds the small business center one excellent resource for their business.  He added that they can call the center for advice anytime and Rod is always available to help with things.  He stated that this is very helpful for couples like them who need assistant and support on how to start a business and make it grow.

Famous Dave’s Secures 21 New Franchise Contracts

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The barbeque chain based in Minnetonka will have its 18 new branches in most of the southern part of California.  Moreover one new venue will be opened in Yakima Washington, Missouri, Independence, Michigan, and Lansing Cities.  Famous Dave’s success is a good motivation to those who are planning to buy a business or searching for franchises for sale.

Famous Dave’s Spokeswoman told the Twin Cities Business about the opening of all its new restaurants in two years with most of them becoming operational by next year.

Opening more Famous Dave’s branches in California will increase its presence in the state, adding more to its 14 restaurants that opened in January.

John Gilbert, CEO of Famous Dave’s stated that the signing will give them a perfect start in their aim of having 50 new venues in the next couple of years.  He added that having more deals will make the growth potential of Famous Dave’s look impressive.  With impressive growth record, more individuals will be attracted to buy a business franchise of Famous Dave’s.

The Famous Dave’s has 132 franchises in 53 locations.  At present, its geographic footprint spans one province in Canada and 33 states.  In July, Famous Dave’s first international venue was opened in Winnipeg.  According to Brett Larrabee, the director of franchise sales and development, the Winnipeg location has exceeded all of their expectations, providing the enterprise its highest sales ever.

The revenue of the company in the latest fiscal year, which ended in January, had a 4% growth or about $154.8 million.  However its current net income was down by 22.9% compared to the previous year.

Its quarter sales, which ended in September 30, amounted to $39.9 million, 2.6% higher from the same period a year ago.  However the net income amounted to $845,000, which was 46% lower from the similar quarter a year ago.  According to Famous Dave’s, its 3rd quarter earnings have been badly affected by its timing on direct-mail marketing and media spending, which occurred on the 4th quarter of the prior year.  The margin pressure brought by the benefit, commodity, and labor costs were also cited as contributing factors.

Last month, Gilbert became the company’s CEO, replacing the former CEO Christopher O’Donnell who became the President and COO.

When the C-suite transition was announced, Aric Nissen, the company’s Marketing VP told the Twin Cities Business that Gilbert and O’Donnell are unique people possessing excellent skills while working with the company’s board together.  He stated that O’Donnell’s strength will be in operation while Gilbert will give attention on the company growth and franchises for sale, emphasizing on brand management and marketing.

Athletes Build Financial Future through Restaurant Franchises

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Last month, the Orlando Magic has let go of Quentin Richardson.  However, even if he doesn’t get an offer from another team, he can still keep busy with his other career being the owner of a restaurant.

Before his team waived him, Richardson was able to sign a deal with East Coast Wings & Grill of North Carolina to operate restaurants within the area of Orlando.  He plans to open his first restaurant next year and nine more within the next 7-year period.

Richardson is among the athletes who chose to buy a business franchise to multiply incomes and plan their future after sports.

This year, Milwaukee Bucks player Drew Gooden who used to play for Magic opened his own Wingstop in the Uptown Altamonte area.  Last month, Peyton Manning, quarterback from Denver Broncos signed to buy a business franchise of 21 Papa John’s.  Shaquille O’Neal, former Magic star owns several pretzel shops of Auntie Anne’s through its investor group.  Tennis ace Venus Williams has also opened outlets of Jamba Juice.

A number of individuals like Dan Marino of Miami Dolphins have been involved in restaurant business for years however the trend in franchising has only picked up pace recently.

According to International Franchise Association, there have been 50 agreements sealed during the past couple of years between franchise companies and sports stars.  Senior director of IFA on diversity and education, Miriam Brewer stated that venturing into franchise business can be one brilliant move for athletes on the lookout on how to increase income.

A member of an organization that helps educate athletes about franchises, Brewer stated that athletes may face some financial hardship or bankruptcy after retirement.

Richardson stated that he started researching about franchising and franchises for sale several months ago after his financial adviser suggested it.  He stated that at that time he needed to figure out ways on how to manage his finances when he retires.

With a guaranteed contract of $5.4 million with Magic in the next couple of years, Richardson stated that he would be involved with a number of business decisions like location choices but the day-to-day restaurant operation will be handled by his business partners.

Former Magic member Drew Gooden has restaurant veteran George Taylor as partner.  Taylor has held managerial positions in Applebee’s, the former Mojo Bar & Grill, and Chili’s.  Currently he holds the director of operations position at the Altamonte Spring Wingstop Store and the future restaurants that Gooden will own in the Central Florida area.

Papa John’s Announces 200 Franchise Agreements for North America in 2012

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On Tuesday, November 20, Papa John’s announced its plan to sign more franchise agreements for North America.  More than 200 franchise opportunities will be developed, create jobs, and make money for some 5,000 future employees over the next few years.  John Schnatter, Chairman, CEO, and founder, said in an interview that their aim is to continue opening up more restaurants that will help the economy.

Papa John’s is the third world’s largest pizza company.  Papa John’s International’s home base is located at Louisville, Kentucky.  For eleven years, customers have consistently rated this pizza chain as No. 1 when it comes to customer satisfaction according to the American Customer Satisfaction Index (ACSI).

Three months earlier the company has already given information about their continuing Papa John’s Franchise Development Incentive Program, which offers zero franchise fee ( $25,000 in value) and waived royalty for 18 months.  The program also includes $50,000 worth of restaurant appliances and equipment for stores that will open in 2013.  The equipment includes two Middleby-Marshal ovens.  The franchise program also provides $3,000 in food credit with PJ Food Service.  This is the establishment that controls and operates food distribution and produce fresh dough for Papa John’s. This special incentive will be available to restaurants that will open 30 days ahead of their schedule.

The incentive program is generally available in the U.S. for qualifying franchisees who will start to operate on or before the 29th of December 2013.  Full details of the program will be made available to applicants upon completion and review of the Franchise Application.

Schnatter revealed that 50% of the franchise agreements are new to the idea of franchise opportunities and are just opening their very first Papa John’s.   An average Papa John’s franchisee owns about three to five restaurants.  Right now Papa John’s is not just all about how to make money from their fabulous pizzas but they’re focused into developing their franchise for small business owners.

The Story Behind the Success of Two Men and a Truck

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Brig and Jon Sorber dabbled in the moving van business during their high school years back in the 80s to make money.  They’d borrow their mum’s 12 foot van and do moves for apartments and small houses in the Michigan and Lansing areas.   They stopped their small moving business when they went off to college.  At least that’s what they thought they did.

But Mary Ellen Sheets, the boys mum, had a better idea when the boys left.  Even when her boys were already off to college she still received calls for jobs.  So she asked them if she could hire a few guys to keep the business moving along and make money out of it.  So it became a routine for Brig and Jon to go back on their truck during summer and Christmas breaks and continue with the moving business.  They were surprised to come home one summer with a brand new truck parked in the driveway.

The big break in the business happened when they set their foot in to franchise opportunities.  Big Sorber, currently CEO of the franchise, says that at the beginning they didn’t have a clue about what franchising really is and so they made a lot of mistakes.   But they learned fast from their mistakes.

Now after two decades in the moving business, Two Men and Truck has turned into 228-unit franchise.  They now have more than 1,400 trucks.  Franchise opportunities helped this business get to where it is now.   Their transition wasn’t easy, but they were able to pull it through.  One important ingredient is to have a clear mission statement that will be carry core values that will create strong partnerships between the franchisor and the franchisee, it shouldn’t be all about just making money.

 

The Perks and Quirks of a Franchise Resale

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One of the appeals of getting a franchise for sale is that it presents lesser risk compared to putting up a new business or a new franchise.  Franchise resales are the more popular choice when it comes to franchise businesses with 7 out 10 acquired in the past two years.

Things to Consider When Looking into a Franchise for sale

  • Look at the history of the franchise and the franchisor
  • Find out the reason why the franchise is being sold
  • Get an accountant to study the digits inside its books to get a bigger picture of what you might be getting into
  • Find out what’s included in the asking price

Advantages of a Franchise Resale

  • A franchise resale already has its own existing customers.  Its brand name already exists and has its own reputation that means less marketing effort to get noticed.
  • An established business will have a history of records that can be used to track and project profitability.  It will be easier to get funding for a business that already has a good track record.

Disadvantages of a Franchise Resale

  • Expect that an established business will have a higher cost than starting a business of your own.  You are not only paying for the stocks, equipment, and location but you will also be paying for its trade secrets and the loyalty of its customers.
  • If you got on to a business franchise that has garnered a bad reputation then it may take some time, effort, and money to turn things around and improve the situation.  You may have to bring out more money before you make money from this business.  This is why a thorough investigation of the franchise is recommended. Although a franchise is an easier way to make money it’s not fullproof plan.

Despite the disadvantages of a franchise resale this is still the common route taken in acquiring a low-risk and readily-established business the fast way.

“Mr. Appliance” Owner Receives Highly Coveted Franchise of the Year Award

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Mr. Appliance has turned out to be the nation’s biggest growing franchises, with 160 franchises nationwide in just three years.  Dylan Conner, 32 years old, is this year’s recipient of the highly esteemed Franchise of the Year Award at the company’s annual reunion in Gaylord, TX.  He was also recipient of the Mr. Appliance’s Rookie of the Year Award in 2009, and the Personal Excellence in Leadership award in 2010.

Conner started getting his head into the appliance repair business when he was old enough to help out his dad on his humble appliance repair operation.  Three generations from his family have been involved in this line of business.  They have been repairing appliances since 1953.  It was a good way for them to make money.  Conner himself learned the ropes when he was still a teenager servicing calls just to make money.

In 2003, it was his turn to take over the business.  Little by little he added technicians and customers in the next following years but nothing came close to what he achieved after being tapped by Mr. Appliance in 2008 with franchise opportunities.

Currently, the franchise has reached seven technicians working on 40 repair jobs in Fresno, Tulare, and Kings.  They handle everything from ovens, dryers, dishwashers, refrigerators, trash compacters, to microwaves.  His dad still helps in the business every now and then continuing the legacy of the family.

The success of the business comes from customer loyalty and word of mouth marketing.  No other promotional material can attract more customers than a job well done.  This type of advertising doesn’t even cost you anything.  Conner is proud to say that his pool of technicians has consistently received the highest scores in the country, with 9.5 out of 10 when it comes to professionalism and courtesy.

Being connected with Mr. Appliance has truly opened a lot of franchise opportunities to this tenacious young entrepreneur.

Disney is Star Wars’ New Home: Speculations on What’s Going to Happen Next

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George Lucas, creator of Star Wars, sold his grand masterpiece, including his Lucasfilm company, to Disney for a $4.05 billion, on Tuesday.  This is will definitely put a twist on the beloved franchise saga.  In view of this turn of events, Disney has announced its intention to continue with Star Wars: Episode VII.  Bob Iger, Disney CEO, revealed that the deal didn’t just involve a few sci-fi movies.  It included seventeen thousand characters in thousands of different planets.

Now that franchise opportunities are under Disney, the possibilities are endless.  There are many speculations on how Disney will play its cards to make money out of it.

More Prequels or Re-making them

Something as big as Star Wars, can surely provide a lot of franchise opportunities for Disney.  It can go ahead and do more prequels or even rewrite the entire Darth Vader story.

Add More Episodes

Star Wars could easily become a continuing saga that moviegoers, from all ages, will always be expecting to see on the big screen; similar to the 007 James Bond movies and the Marvel superheroes franchise.  It will be so easy to make money this way and keep fans happy at the same time.

Turn it Into a TV Series

Yesterday’s announcement from Iger suggested that the franchise could be a great fit for Disney’s tween-oriented channel.

Evolution of a New Star Wars Comic Book

It’s interesting to know that Marvel Comics is also owned by Disney.  Although it was the Dark Horse Comics that had the license to Star Wars for two decades, Disney could utilize Marvel Comics as venue for a these characters to come back to life again through the comic book pages.

Develop Star Wars Land

Star Wars is already a universe on its own so why not indulge the fans further with its very own theme park, not just a section of Disneyland but a special place that would really put Star Wars and its elements on the planet.