Franchise owners have stake in and enjoy help as part of larger entity
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One of the biggest American dreams is owning your own home. Another is owning your own business. After years of working for someone else, some just want to be one’s own boss, calling the shots, making the decisions, and running one’s own life. It’s an exciting prospect, but a scary one too. Start-up costs are often high and to keep things afloat, more and more cash comes out of the family savings. But there’s a way to ease some of the anxiety. A franchise offers the chance to emerge as an entrepreneur all on your own, almost. The parentcompany can hold your hand with training, start-up help, a built-in marketing base and a proven track record. On the Seacoast, there are plenty of franchises, from those with huge start-up costs like a McDonald’s with initial outlays of anywhere from $500,000 to $1.5 million to the popular 1-800-GOT-JUNK for much less at $60,000-$90,000. Curves is even less. The fitness center and program designed for women was named one of the fastest-growing franchises for 2005 by www.entrepreneur.com, and was second after Subway in the site’s top 10 list this year as well. Curves Rick and Modesta Bach have two Curves franchises, one in York, Maine, and one in Stratham. "We opened the York Curves in October of 1999. It was number 422. Then in April of 2001, we opened the Stratham one. It’s number 1,082," Rick Bach said. Like many franchise owners, the kind of franchise one buys stems from a personal interest, and there is one to fit almost every preference from food to cleaning to bird houses. Curves is an exercise center that allows women to do two, 15-minute circuits three or more times a week in an environment without the pressures some large gyms can bring, something that appealed to the Bachs. "My wife was in college at FIT (The Fashion Institute of Technology) in New York, but she taught exercise classes on the weekends. My best friend from high school came to stay with us so he could run the Boston Marathon, and all his wife talked about was Curves this, Curves that. At the time, there were none in New England, but my wife got interested. By the time we decided to do it, there was one in Hooksett, N.H., and one in Lewiston, Maine." Bach served in the National Guard for 20 years and at the time was driving a truck. "When we opened York, we were scared to death. A lot of women didn’t want to commit to a year of membership. People didn’t know about it then like they do now." At the time, the start-up cost for the York Curves was $20,000, $10,000 for equipment and $10,000 for the franchise. When the couple opened the Stratham Curves, the cost had risen to $30,000. But there are other costs as well. "We had to get a computer, a stereo, and the rent is the biggest expense. Now, we have employees, so there are costs with that." The Bachs also pay royalty fees to Curves and an advertising fee to cover all the high-profile national ads that benefit all the facilities. Bach says the Curves company was there to support them during the start-up and continues to support their business. "The hardest thing we had to do totally on our own was find a place to lease. But if you do what they tell you, you can’t go wrong. We went to Waco, Texas, for training, and then a mentor came up to help us. You still feel like an entrepreneur, but you have the franchise to fall back on. You can always call and e-mail." Edible Arrangements Donna Downes run her franchise, Edible Arrangements in Portsmouth, since March. With start-up costs of $110,000-$169,000, it’s pricier than Curves, but Downes said it comes with its rewards. The shop designs, assembles and delivers arrangements of fruit and chocolate-covered strawberry bouquets for gifts and parties. She observed two Edible Arrangements franchises in Massachusetts before embarking on her own. "Everything in a franchise is a proven recipe for success. I watched the business grow in Woburn where my daughter worked, and one in Beverly, and they said they were doing great," Downes said. The franchise as a whole was ranked 207 on Entrepreneur’s Franchise 500 list this year, up from 446 in 2004. It also rose from 44 to eight on the top new franchise list. Downes has the exclusive rights to have the franchise in Portsmouth proper and the surrounding areas, including Greenland, Newmarket, Hampton, Seabrook and Kittery, Maine. All of these communities have been great, Downes said. "I think the people in this community are very supportive. I wasn’t sure what would happen because I wasn’t really from here, but they want me to succeed." The parent company helps her succeed as well. "They have everything pretty much down and all the processes in place. That way, you don’t waste money in the wrong type of ad or the wrong media." Downes’ new venture does come with its challenges. While the business is moving ahead on track, August was slow, but things are picking up, she said. And finding help is among her big challenges. "It’s a made-to-order business, and I’m always looking for good help." Vintner’s Cellar For Gail Locke, who opened her Vintner’s Cellar franchise in Portsmouth with a ribbon-cutting ceremony Sept. 16, the wine-making business is a new way of life. "I sold appliances at State Street Discount (in Portsmouth) for 15 years. I was looking for some kind of business I’d enjoy. I really wanted to enjoy what I was doing more. I looked online for wine franchises." Locke is the 17th shop to join Vintner’s Cellar, the biggest wine-making franchise in the United States. She says there are more than 20 now. At her shop, people can taste some wine and then customize their own wine using a kit as a base. Add the yeast and leave the wine there to ferment for up to eight weeks. When the time is up, the wine maker returns to cork, seal and design a label for the wine. Many use the winery for parties where friends can get together to make wine for fun or to make wine with a customized label for gifts. While Locke went through the training and hand-holding that comes with a franchise, she says she’s permitted some freedoms. "They allow you to do it the way you want, to some extent," she said. "You can do your own colors and décor." It’s also a way to customize her own life. While husband Michael took a few months off from work to help set up the business, he now helps out just for parties, which gives the couple the health and other benefits they need, but leaves the winery business to Locke. As a new franchisee, it’s too early to report on failures or successes. But if she gets tired of the business, she can always sell and perhaps for a profit, as Rick Bach reports. "In (Los Angeles), they have huge Curves with many circuits that can resell for a million dollars." Bach explained. "So if you’ve run it properly and have the client base, you can make a profit if you sell. Some people own five or six franchises, build them up and sell them, and that’s how they have a business."
GET IN THE GAME: Find out more about franchising and franchise rankings and costs at entrepreneur source. Here are some of the top franchised businesses for 2005, according to Entrepreneur.com: Top new Results Travel Dippin’ Dots Franchising Inc. Super Wash Embroid Me Foot Solutions Inc. Moe’s Southwest Grill Mr. Handyman Int’l. LLCEdible Arrangements CardSmart Retail Corp.Weichert Real Estate Affiliates Inc. Fastest-growing Curves Subway Jan-Pro Franchising Int’l. Inc.Coverall Cleaning Concepts Quizno’s Franchise Co. Jackson Hewitt Tax Service Jani-King Liberty Tax ServiceCleanNet USA Inc.UPS Store Top home based Jani-King Service Master Clean Chem-Dry Carpet Drapery & Upholstery Cleaning Jan-Pro Franchising Int’l. Inc.Snap-on Tools Jazzercise Inc. CleanNet USA Inc.Servpro Industries Inc. Matco Tools Coverall Cleaning Concepts
Corporate strings are attached with franchises Editor’s note: Herald Sunday asked an expert about the pros and cons of owning a franchise business.
The University of New Hampshire’s Whittemore School of Business and Economics is home to The William Rosenberg International Center of Franchising, a group that researches and advances the understanding of franchising. The group maintains the largest database of franchise companies and publishes financial findings on 50 of the largest franchisers as well as teaching classes about franchising. Udo A. Schlentrich is director of the center as well as an associate professor at the Whittemore School. He says the Franchise 50, the index of top 50 franchises, regularly tops the S&P 500, but in most business ventures not all sides of the franchise approach are "up," but there are many compelling reasons to enter the franchise business. First, prospective franchisees can see the business in action. "You can kick the tires by checking the system out by looking at other franchisees," Schlentrich said. And after finding your perfect franchise, funding may be less of an issue. "You might more easily get financing from a bank if you have an established system. Banks are more likely to look at a business idea with a proven track record rather than a one-off idea." Another pro is that the public already knows about the concept and the company. "There’s a brand awareness already in place through ads and marketing," Schlentrich said. He added there is also marketing support when it comes to the individual region the business is in. When the demographics change, the franchise is there to help. "There’s also training and operational support," he said. "You don’t have to be a health or fitness expert to open a Curves." And, of course, there are some downsides and many of them involve personal factors. "You have to decide if the concept itself is right for you. It might not be right for everyone, but at least you can try it out," Schlentrich said. The center’s director says franchisee candidates have to decide if they can be passionate about the business concept they’ve chosen. There are also costs associated with the concept that some might not like. Royalty payments go to the franchise company to support their work and help them make their own profit. And if you’re a bit of a free spirit, franchising may not be for you either. "The franchising culture is one that is autocratic," Schlentrich said. "Uniformity is key to a franchise." Those who have the need to design their own business and do their own thing might find a franchise confining. And while you run your own shop, you’re not totally free, Schlentrich said. "You still have a boss." |
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