Franchising in a Down Economy

By Jeff McKinney • jmckinney@enquirer.com • December 19, 2008
Downsized by the mortgage meltdown, Al Cooper suddenly was forced to find a new job.
Cooper, formerly vice president and director of operations at Fidelity Mortgage for five years, lost his job in November 2007 after the subprime debacle led to liquidation of the company. Cooper, a divorced dad with three boys, needed work and to stay here.
He used about $25,000 in savings last month to launch Caring Transitions, a home-based franchise that offers estate sales and other services for senior citizens and their families.
Cooper, 50, said he liked Caring Transitions because its business model was less risky than other companies and offered more potential growth with baby boomers aging.
"I also was concerned I would not be able to find another job in the corporate world due to my age and experience," Cooper said.
Welcome to the franchising world in a sour economy. Cooper joins other former executives from around the country who have decided to become franchisees.
When you buy into a franchise business, you get marketing, advertising and training support you typically do not get with an independent business, said Alisa Harrison, spokeswoman at the International Franchise Association in Washington.
She said a franchised business allows an entrepreneur to take advantage of a proven business model and a proven brand.
"In good times and bad, a franchise allows you to go into business for yourself but not by yourself," Harrison said.
And with a recession-like economy, entrepreneurs say franchises allow you to be your own boss and control your destiny.
In a weak economy, Harrison said, you have a workforce that's been laid off, and many of these people are taking their severance to start up franchises.
But potential franchisees also should be cautious before jumping into business.
Chuck Matthews, executive director of the University of Cincinnati's Center for Entrepreneurship, said one of the cons of buying into a franchise are the initial costs, including the franchise fee, investment cost and royalty payments.
But on the other hand, he said, a franchisor often will provide financial assistance to a qualified franchisee to start the business.
He said potential franchisees also should be careful with such things as restrictions on their sales territory, what items they actually can sell and shared costs tied to marketing support.
"It's critical that you do your homework before starting a franchise, particularly in a weak economy." Matthews said.
Jody Wallace, formerly a stay-at-home mother, and her husband, DeWight, opened a Pump It Up franchise 3½ years ago in West Chester Township.
The business offers a giant, indoor, inflatable playground that offers private parties for children.
The couple invested about $400,000, including franchising rights, equipment and build-out for the business. DeWight still works for a large local company.
Jody said the business allows her to do her part in generating income for the family, while using her event-planning skills to help make kids happy.
She said the franchise allows her to offer services she could not provide with her own business, including an art camp for kids and corporate team building for adults.
"A franchise offers you the support you need in one package."
Also wanting more financial security, Becky Gabbard turned her love for animals into a business. She invested $10,500 to launch a Fetch! Pet Care franchise in October.
The business provides professional at-home pet-sitting, dog-walking and other services.
"It's a very lucrative business and it provides a service people need regardless of the economy," she said.
Harrison said her group represents franchisees ranging in age from 25 to 85, and franchises that range from pet-sitting services to automotive stores like Jiffy Lube.
She said individuals can open a franchise for as low as $20,000 and high as $2 million. Harrison said the figures include upfront costs.
Harrison said the biggest challenge facing potential franchisees now is getting credit and affordable financing.
Author Jim Coen, who has been in the franchising business for 25 years, agreed.
He said the recession could be limiting the number of franchisees because of the credit crunch.
"It's not as easy today to get a deal financed as it was a year or two ago," he said.

Franchise India ties up with Francorp

Franchise India ties up with US-based Francorp
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New Delhi, Dec 2 (IANS) City-based Franchise India Holdings Ltd Tuesday announced it has entered into a partnership agreement with the global franchise consultant major Francorp Inc of the US to attract more companies to India through the franchise model.
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New Delhi, Dec 2 (IANS) City-based Franchise India Holdings Ltd Tuesday announced it has entered into a partnership agreement with the global franchise consultant major Francorp Inc of the US to attract more companies to India through the franchise model.
Announcing the licensing agreement here, Franchise India president Gaurav Marya said: 'We are in talks with a number of international brands' to bring them to Indian market.
The new partnership company will be called Francorp India and will open four offices in Delhi, Mumbai, Chennai and Chandigarh.
'There are a lot of companies in the services sector that are actively looking at India to set up their franchise operations,' Francorp International president M.F.M. Ramon Vijay said.
Talking about the growing popularity of franchise model among Indian business men, Marya said: 'Earlier people used to park their funds either in the stock markets or buy real estate to get a decent 30 percent return. Now because of the economic slump, these avenues won't get them such high returns and people are now looking at less risky ventures to invest. Franchise is such a business.'

Don Boroian Client - Maui PlayCare

Kid relief
Maui PlayCare offers stress-free child care
By Adam ElrashidiAs published in: Franchise Times - November-December 2008
A Montana transplant to Hawaii hopes that parents and franchisees will say "Aloha!" to her drop-in day care franchise.Hawaii gave the world hula dancing, macadamia nuts and Don Ho. Now you can add stress-free, drop-off childcare to the list, thanks to Bonnie McCarthy's franchise, Maui PlayCare.
A Montana-transplant, McCarthy quit her job in construction safety and office management to become a stay-at-home mom shortly after her last two children were born, but found that she had less time for herself. "It just became a way of life where I didn't even have a minute to even think," says McCarthy.
McCarthy didn't like the idea of leaving her kids with babysitters and didn't want to pay the membership fees and high rates at day-care centers when she only needed an hour or two a day. So in 2002 she came up with the concept of Maui PlayCare - a center where parents can leave their children for an hour or two, or for the full day.
The concept is simple: Maui PlayCare provides parents running to the grocery store or a doctor's appointment with a place they can safely leave their children for a short amount of time. There's no reservations. No membership fees. No unadjusted hourly rates. Maui even provides parents with a to-go pager for an added sense of security.
Bonnie McCarthy's own child care problems led her to create Maui PlayCare in 2002.Maui PlayCare is structured around the "Aloha Spirit" - an attitude akin to "Southern Hospitality" that emphasizes community service, fun and relaxation.
Additionally, Maui provides children with a fun environment they can enjoy at their own pace. Children play in secured-access playrooms that are monitored by attendants. Kids are given healthy snacks, and can participate in activities as they wish.
The company also has a program to help kindergarten-age children transition from being home all day to being in the classroom. Children are left in Maui's care for intermittent periods of time, allowing them to learn that even though their parents are gone, they will be back.
"By the time school comes around and they drop them off, the child is used to it - they know mommy is coming back, it doesn't disrupt the teacher or the classroom," said McCarthy. The franchise's main location cooperates with a local community college to provide tuition assistance for college students with children.
McCarthy began franchising the concept last year after receiving numerous inquiries from tourists who were able to take advantage of her services while on vacation. "I had people from Texas, from Florida, from New York coming to me and saying there's nothing like it (on the mainland)," said McCarthy. "I had people asking me, 'Is this a franchise?' 'Do you sell franchises?' - so I started educating myself on franchising, and I decided that this was something I wanted to do."
At a glance
Initial Investment: $137,000-$221,000
Franchise Fee: $40,000
Royalty: 7 percent
Ad Fee: 6 percent local
Units: 1Maui PlayCare has a no-brainer sales pitch to prospective franchisees - each unit comes with its own trip to Hawaii. McCarthy trains new franchisees herself at the company's Maui headquarters.
That's not the only reason Marilyn Alexander, a retired child welfare worker, was interested in the concept. The Oklahoma City franchisee said the concept allowed her to begin working with kids again.
"If I would have had something like this when my kids were growing up, I would have used it - a lot," said Alexander. "Just thinking about going to the supermarket (now), and looking at some of these moms who are so stressed out because they've got three kids hanging off them, wanting this, wanting that; and these moms are just barely making it through."
Currently, Maui PlayCare has two units in development, one in Oklahoma City and another in Scottsdale, Arizona. McCarthy said she plans to have 20 more units signed in 2009, with roughly 10 to 15 open or under construction by the end of that year, plus another 50 deals signed by the end of 2010.

Francorp Client - Jersey Mike's Subs

Here is a great interview with Francorp Client Peter Cancro, CEO of Jersey Mike's Subs. Jersey Mike's recently surpassed 400 units and continues to redefine the sandwich franchise segment.

Having Words Peter Cancro Founder and Chief Executive, Jersey Mike’s Subs
By Dina Berta

Having Words Peter Cancro Founder and Chief Executive, Jersey Mike’s Subs(Nov. 17, 2008) Football has played a major role in the life of Peter Cancro, founder and chief executive of Jersey Mike’s Subs, based in Manasquan, N.J. From Pop Warner leagues to playing for his high school team, the sport and the coaches he encountered taught him valuable lessons about teamwork and leadership—and helped him pursue his entrepreneurial dreams.Cancro started working at Mike’s Sub Shop in the seaside town of Point Pleasant, N.J., when he was 14. Three years later, he bought out the owners. His football coach, who was also a banker, helped him get a loan to finance the deal. Cancro, who was president of the class of 1975 at Point Pleasant High School, was also the only graduate to own his own sub shop. He was an owner at 17, before he could legally use a slicer.After graduating from high school, he married his wife, Linda, and they opened more outlets, changing the name to Jersey Mike’s Subs to stress the chain’s origins along the New Jersey shore. Cancro eventually formed Jersey Mike’s Franchising Systems Inc., and began franchising in earnest. Over the years, he has never forgotten the leadership lessons he learned from football and teaches those concepts to Jersey Mike’s managers and franchisees.It’s pretty amazing that at the age of 17 you bought a restaurant.Looking back on it, I really don’t comprehend it. I started working very early, mowing lawns when I was 10 and 11. It was not that big of a deal to buy when I was 17. I had worked there four years. I did not think of failure at that age. I did not have any worries.FAST FACTSAGE: 51HOMETOWN: Point Pleasant Beach, N.J.EXPERIENCE: Began working in a local sub sandwich shop at age 14 and bought it three years later, before graduating from high school; built Jersey Mike’s Subs to a nearly 400-unit chainPERSONAL: married; four childrenHOBBIES: snow shoeing, running and playing tennisNow you take things slowly, methodically. I sort of leapt back then. Along the way we lose the ability to leap. That’s probably a good thing.Was it your high school football coach who helped you buy the restaurant?No. My Pop Warner coach, Rod Smith. I played for him before high school. I was quarterback of the team, and we won the championship of that league.I always stayed in touch with him, and he came to my [high school] games.When the owner of Mike’s put it up for sale in 1975, I started knocking on doors, trying to raise capital. It was a Sunday night at 9:30 when I came over to his house.He came to our annual meeting in May 2006. It was very emotional. He cried. I cried.Did you play any college ball?I hung up my spikes on Thanksgiving Day my senior year, after winning the championship, but I’ve carried on that [sports] mentality. You are not so much pushing people but pulling them along. Any great coach does not push. You show them the way and invite them in. That’s the way I was coached.Were you ever a coach?I coached my daughter’s soccer team and baseball [team]. The sports involvement is the same with music and activities out of school.When you are a teenager and young, there are certain teachers and coaches that influence you. It’s neat to take that into business—the philosophy of acting as a team, yet celebrating individual victories, mentoring and coaching and giving back and supporting each other.

For more information on franchisising and Francorp Clients, visit www.francorp.com

Francorp Opens Office in India

PRESS RELEASE


FOR IMMEDIATE RELEASE FOR INFORMATION CONTACT:
Francorp
(800) 372-6244

Francorp Expanding Into India


(Olympia Fields, IL) – Francorp Chairman Don Boroian announced today that Francorp has awarded Franchise India Holdings Limited the Francorp India franchise.

The contract was signed between Don Boroian, Francorp India U.S.A. Representative Atul Bhatara, and President of Franchise India Holdings Limited Guarav Marya.

“Franchise India Holdings Limited has already paved the way with franchise expos, franchise and business publications, and franchise consulting in India,” shares Boroian. “We are honored to have them as part of our team.”

Franchise India Holdings Limited has been Asia’s leading integrated franchise consulting company since 1999, with an authority on franchising, licensing, retailing, real estate, and marketing. With its strategically formed divisions, Franchise India Holdings Limited has created its own niche as the pioneers of the franchise industry and a small business authority in India.

According to Marya, “Francorp India will help boost investor confidence by providing professionally managed franchise consulting and development support, all under a common one-step gateway to facilitate entry into India and vice-versa.”

India is home to over a billion people, with a flourishing class of urban consumers possessing considerable amount of disposable income. With the continued growth of the economy, India has strengthened its claim to be a viable and beneficial destination for a foreign franchisor.

Since its beginning in the early 90s, the franchise industry has grown in leaps and bounds in the Indian sub-continent, and there is still much to explore. Based on the successful growth of many franchise brands in India, the future of franchising in India is highly promising.[1]

This promising future of the Indian franchising industry is backed up by an equally powerful market report that shows statistics of this thriving sector.
According to reports, for the past five years the Indian franchise market has recorded a steady growth of 30 to 35% per annum. Also, the annual turnover of the Indian franchise industry soared to 3.3 billion USD and is projected to soar higher in the coming years.[2] “We are very excited about the opportunity to enter the Indian market at a time when the concept of franchising is experiencing tremendous growth and acceptance,” noted Boroian.

For over 30 years, Francorp has been the leader in the franchise consulting industry. They have assembled a team of experts whose talents are coordinated seamlessly to create customized materials that fit the specific needs of their clients. As an international company, Francorp has the global reach to help clients expand their business, with a local presence to adjust their business to fit each country’s unique culture and laws. Headquartered in Chicago, IL, Francorp has assisted more than 10,000 companies for expansion, and has developed more than 2,000 franchise programs throughout the U.S., Japan, South Africa, Middle East, Central America, Malaysia, Philippines, Argentina, Chile, and Mexico.

For more information, visit www.francorp.com or call (800) 372-6244.

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[1] Franchiseek, Indian Franchise Statistics and Information. November 17, 2008, available at www.franchiseek.com.
[2] Franchiseek, Indian Franchise Statistics and Information. November 17, 2008, available at www.franchiseek.com.

Don Boroian Refocuses Francorp Team

The economy provides interesting obstacles for any company right now. It takes exceptional leadership to guide an organization through times like we face right now. Don Boroian has been through many difficult economic times and has risen to take on the challenge. Francorp continues to lead their industry and help make clients successful throughout the economic challenges. Francorp is behind Don Boroian and the employees support their leader and stand behind Don. Francorp has had a great year up to this point and Francorp clients have benefited from all of the support and guidance they continue to receive from the industry leader. It is times like this that the quality of the advice and support a new franchise receives is absolutely critical. Francorp has the infrastructure and talent to deliver that level of guidance that is needed for a new franchise system to be successful.

www.francorp.com

Don Boroian - Francorp at the Midwest Franchise Exposition

Francorp is the world leader in franchise development and franchise consulting. Don Boroian founded the firm over 32 years ago with the express goal of helping business owners build and grow their company's throughout the U.S. and abroad. Francorp has 15 offices including the corporate headquarters based out of Chicago, IL. Francorp is the only in-house fully staffed franchise development firm and has worked with over 2,000 successful franchise systems.
Francorp works very closely with each of the franchise exibitions across the country and around the world. Francorp clients benefit by having a presence and a sales team at these shows advertising for them. For more information on Francorp and the development work that the firm has done please visit the corporate site, http://www.francorp.com/.
Seize The Opportunity! Become Your Own Bossat the Midwest Franchise & Business Opportunities Expo
CHICAGO, Illinois (May 21, 2008) – North America’s largest Franchise and Business Opportunities Expo returns to Chicago – November 22nd & 23rd, 2008 at the Schaumburg Convention Center. Over 1,800 potentialentrepreneurs - looking to become their own boss or who are in search of the perfect business partner - will explore the most opportunities ever showcased in the Midwest.
“In a recent survey, conducted by careerbuilder.com, over 84% of Americans are dissatisfied with their jobs”, states Fred Cox, President of National Event Management. “We wanted to produce an event that gave Americansand business owners the chance to meet face-to-face and explore how to make their dreams of becoming their own boss a reality.”
Showcasing over 100 proven, successful franchise and business opportunity concepts in Chicago – “The Heart of the Midwest”, the event also provides valuable educational resources and a wide range of advisors and suppliersfor future business owners. Free daily seminars from reputable and insightful professionals have information that entrepreneurs need to know. Topics include: “How to Find the Business That’s Right For You”, “Legal Aspectsof Buying a Franchise”, and “IRS Requirements When Starting a Small Business.”
The Midwest Franchise and Business Opportunities Expo takes place Saturday, November 22nd & Sunday, November 23rd at the Schaumburg Convention Center. Hours of operation are Saturday 10am-4pm and Sunday11am-4pm. For more information, visit http://www.chicagofranchiseshow.com/.The Franchise & Business Opportunities Expo is produced by National Event Management. National Event Management is the largest producer of business ownership events across North America with 27 annual FranchiseExpos showcasing over 1,700 businesses to 65,000 prospective business owners annually. For more information on National Event Management visit http://www.nationalevent.com/.
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