THE ABC’S OF FRANCHISING
FranchiseDictionary FEBRUARY 2018
FRANCHISEDICTIONARYMAGAZINE.COM
$5.95
THE ABC’S OF FRANCHISING
Unique Kids’ Franchises
A close look at 10 creative brands
Raising Super Kids
Why children’s services franchising is booming
The truth about royalty fees
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18
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JOSHUA GRINSTEAD GYMGUYZ®
Bergen County, New Jersey
A standout franchisee who helps his community
Spending on kids is the last budget item to go
Meet the dream team behind Kono Pizza®
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February 2018 3
con·tents
kən�tents/ noun
1. All the stories and features contained in the February issue 2. An amazing resource for franchisees
24 DEPARTMENTS
7 8 10 14 16 44 46 50
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Letter from the Editor Buzzword
What experts are talking about in franchising.
Update
A new franchise opportunity just for veterans and much more.
Franchisee of the Month
Meet a GYMGUYZ® owner who provides charitable training to his community.
Entrepreneur
How Kona Pizza® founders David Ragosa and Carlo Ruggiero got started.
Interview
Advice from Mariel Miller, owner of The Franchise Advisor.
Spotlight
A showcase of trending franchise businesses.
Last Word
Smart choices that made Kona Ice® a hit.
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46 14
JOSHUA GRINSTEAD GYMGUYZ®
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Bergen County, New Jersey
FEATURES
22 24 36 40 42
Little Kids Mean Big Business
It’s a well-known fact: Even when times are tough, parents will always spend on their kids.
Confessions of an Indoor Play Junkie
Indoor play places offer sanity for moms with cabin fever.
Unique Kids’ Franchises
An in-depth look at creative brands in children’s franchising.
Raising Super Kids
Why the children’s franchise industry is booming and what that means for potential investors.
Learning Curves
What to look for in a franchisor’s training program.
The Truth about Royalty Fees
Royalty fees can seem steep for anyone launching a new business. However, when a franchisor delivers huge value, you get what you pay for.
February 2018 5
THE ABC’S OF FRANCHISING
FranchiseDictionary on the cover FranchiseDictionary FranchiseDictionary THE ABC’S OF FRANCHISING
THE ABC’S OF FRANCHISING FEBRUARY 2018
FRANCHISEDICTIONARYMAGAZINE.COM
$5.95
THE ABC’S OF FRANCHISING
Unique Kids’ Franchises
A close look at 10 creative brands
Raising Super Kids
Why children’s services franchising is booming
The truth about royalty fees
14
16
18
JOSHUA GRINSTEAD GYMGUYZ®
Bergen County, New Jersey
A standout franchisee who helps his community
Spending on kids is the last budget item to go
Meet the dream team behind Kono Pizza®
Meet some of the most creative minds in children’s services franchising. Our cover story takes an in-depth look at 10 innovative brands. See how they started and where they are headed. Is one of them right for you?
FranchiseDictionary FranchiseDictionary FranchiseDictionary FranchiseDictionary FranchiseDictionary THE ABC’S OF FRANCHISING
President: Joseph D. Katz
info@franchisedictionarymagazine.com THE ABC’S OF FRANCHISING
Editor-in-Chief: Jill Abrahamsen
editor@franchisedictionarymagazine.com THE ABC’S OF FRANCHISING
Senior Editor: Mary Lynn Mitcham Strom
THE ABC’S OF FRANCHISING
Contributors: Sean Ajani, Christopher Conner, THE ABC’S OF FRANCHISING Brian Lincer, Lisa Welko Sales: (888) 315-9549, ext. 503
sales@franchisedictionarymagazine.com
Graphics: graphics@franchisedictionarymagazine.com
Contact us: 197 State Route 18, New Brunswick, NJ 08816 info@franchisedictionarymagazine.com
franchisedictionarymagazine.com Entire contents copyright ©2018
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let·ter
\�le-tər \ noun
1. A welcome note from our editor 2. A brief overview of what’s in this issue
Being a kid today is a whole different ball game than when I grew up. Back then, moms would say, “Go out and play!” Today’s parents, though, are more likely to utter, “Get in the car. Don’t forget your cleats. Your violin. Your script.” Welcome to the age of 24/7 enrichment, which for parents roughly means chauffeuring kids from one activity to the next. Good or bad, today’s children are expected to participate in a whole world of extracurricular activities and learn a host of non-essential skills. Children’s service franchising is playing a role in that, and in this issue we dive into the many franchises that cater to kids. In our cover story, “Unique Kids’ Franchises” (page 24), we meet leaders of creative brands, such as Challenge Island’s Sharon Estroff, who launched an innovative educational enrichment program, inspired by the TV show “Survivor.” In Lisa Welko’s “Little Kids Mean Big Business” (page 18), we learn how competitive, overly busy parents are driving the rise in children’s brands. Meanwhile on page 36, Mariel Miller, a.k.a. The Franchise Advisor, reveals what the booming kids’ industry means to potential investors in “Raising Superkids.” For some entrepreneurial inspiration, turn to page 16 and learn how the founders of Kono Pizza® brought their company—and a whole new way to eat pizza—to life. You can’t forget our inspiring “Franchisee of the Month” GYMYGUYZ® Josh Grinstead, who makes sure he gives back to the community by offering free and at-cost personal training services to local schools, hospitals, and senior centers. We hope you enjoy the issue, and thank you for the positive feedback on our launch in January. As always, we aim to keep you informed on the franchise industry. So this month, I will be heading to Phoenix, Arizona, to cover the International Franchising Association’s convention (IFA2018), and will come back with a full report on the latest and greatest in the industry for our upcoming March issue. All the best,
Jill Abrahamsen Editor-in-Chief editor@franchisedictionarymagazine.com
February 2018 7
buzz·word
\ 'bəz-'wərd \ noun
1. A compilation of franchising trends 2. What experts are talking about in franchising
Going Mobile Mobile franchising is one of the fastest-growing trends today. Many businesses are on wheels: personal training, window cleaning, pet grooming, even lice removal. If you are looking for a business that has low overhead and flexibility, mobile franchising may be for you.
»Pet Grooming
Pet lovers appreciate convenience. Mobile pet grooming offers an excellent opportunity to launch a flexible business with low startup costs and high margins.
Household Services
»
Mobile household services offer the ultimate in convenience. These franchises offer homeowners the chance to get a variety of odd jobs done effortlessly. Drywall repair? Check. Window cleaning? Dryer vent maintenance? Lawn care? Check, check, check.
» Food Trucks
Food trucks are popping up everywhere, and they can offer everything from simple shaved ice to intricate ethnic eats. For customers, this means variety and convenience. And for business owners, no need to hope for customers to come to you—you can go to them.
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Tips of the Tradeshow If you’re looking to invest in a franchise, attending a trade show is a great way to educate yourself and learn about opportunities. But navigating these, often, colossal events can be overwhelming. Below are some tips for making the most of your visit.
CHOOSE WISELY
Catch Some Air Always wanted to skydive but can’t get up the nerve to jump out of a plane? Indoor skydiving could be the thing for you. A leader in the indoor game, iFLY® can get you started. With the help of indoor wind tunnels—and under the supervision of trained instructors—iFLY® delivers simulated flying sessions. No parachutes, no skills, and no planes. Offering single sessions, corporate events, and birthday parties, iFLY® operates more than 44 wind tunnels around the world.
»
91%
Buying into a proven business model with established marketing and support systems in place is a lot less risky than starting a business on your own. The success rate, after seven years, of a franchise start-up business is said to be 91 percent. Compare that to a 20 percent success rate for individual businesses.
There are many trade shows to choose from. Do the research to see which best suits your goals.
PLAN AHEAD
Find out which vendors and franchises will be in attendance, and visit the ones that interest you. Get a floor plan of the show and map out your day.
BE PREPARED
Have questions for vendors? Bring a list of items you’d like to discuss. Come prepared to take notes with pens, notebooks, a laptop, and phone charger.
FEBRUARY SHOWS
IFA 2018, Feb 10-13, 2018 franchise.org/convention Phoenix Convention Center Phoenix, AZ The Franchise Expo Feb 17-18, 2018 franchiseshowinfo.com Meadowlands Exposition Center Secaucus, NJ
February 2018 9
up·date
\�əp- dāt\ noun �
1. The latest headlines in the franchise industry 2. Quick news bites to inspire you
For Vets Only
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READY FOR TAKE-OFF: G-FORCETM LAUNCHES NATIONAL VETERAN FRANCHISE INITIATIVE G-Force,TM the New Hampshire-based go-to resource for parking lot line striping and pavement marking, is launching a franchise program exclusive to military veterans. “We’ve created a one-of-a-kind, low-cost franchise just for veterans,” says founder and CEO Jack Child, a veteran of both the U.S. Army and Air force. “This is a stealth business in high demand that few know about,” says Child. “Veterans have the best leadership training in the world. In addition to coming from an integrity-focused background, they are missionoriented and have traits needed to run successful businesses. This low-cost, high-margin opportunity is perfect for veterans who like to work outdoors.” For more informaton, visit gogforce.com
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In brief COFFEE WITH A CAUSE
Sign of the Times REALTY ONE GROUP LAUNCHES HUGE BILLBOARD CAMPAIGN IN TIMES SQUARE Realty One Group has launched its largest advertising campaign to date with a media blast throughout New York City’s Times Square. “No real estate company has ever booked multiple screens at this exclusive location, and we are thrilled to be the first,” says Kuba Jewgieniew, CEO and founder of Realty One Group. “The
content features real people, which is a critical objective for us—to connect with everyday real estate professionals and help them evolve into the rock stars of the industry.” This advertising campaign is aimed at bringing high-level attention to the brand’s “coolture” and untraditional business model.
Everything Nice BUILD-A-BEAR WORKSHOP® ANNOUNCED A NEW COLLECTION OF VALENTINE’S GIFTS Looking for a unique Valentine’s Day gift for that special someone? Build-A-Bear Workshop’s® Make-YourOwn Sugar Scent™ furry friend is a sweet-smelling companion that gets sweeter with each hug. The cuddly creatures can be customized with accessories like a tutu or plush heart lollipop. You and your Valentine can even make a wish on a heart and place it inside your furry friend.
First Watch® announced its partnership with Mujeres en Café (Women in Coffee)—an organization of female coffee growers in the Huila department of Colombia, to launch its new coffee program. The new coffee, dubbed Project Sunrise, is now available in First Watch® restaurants nationwide and will provide much-needed support to these women-owned farms.
TAX RELIEF H&R Block will be the new, DIY desktop tax software provider available at Walmart stores nationwide, and on walmart.com. This retail partnership brings H&R Block DIY desktop software to the world’s largest retailer, making it even more convenient to purchase. This year’s desktop software product features the addition of “drag and drop,” which easily imports tax information from any source, including last year’s tax return from other tax-prep services.
February 2018 11
up·date
Sister Act
In brief CHEESE SPREAD
Mac-and-cheese lovers have something to look forward to. I Heart Mac and Cheese just launched a national franchise program. The South Florida fast-casual restaurant has developed a loyal fan base since opening in 2015. The concept is simple: Take America’s favorite comfort food and let customers combine it with a variety of toppings. The result? A grown-up approach on a childhood favorite and a new family favorite. The menu includes mac and cheese like you’ve never tasted before: “The Best of Both Worlds” is a baked mac and cheese sandwich with slow-cooked short rib, white cheddar cheese, and American cheese finished with barbeque sauce. For franchisees, The I Heart Mac & Cheese concept is flexible and can be opened in a small space like a mall kiosk or food court.
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FLATBREAD GRILL® NOW OFFERING FRANCHISE OPPORTUNITIES Founded by the Esendemir Sisters, Arzu, Fusun, and Gonca in 2007, Flatbread Grill® was born when the trio came together to share their love of Mediterranean food. Their vision is to serve great food in a warm, casual environment, where friends and families can get together. “My sisters and I built this very unique concept with passion and dedication,” says Arzu Esendemir, co-founder and CEO of Flatbread Grill.® She has spent the past decade developing the business model with her two sisters. “We wanted to be absolutely certain that our business model was flawless before we invited other people along for the ride,” she adds.
Shark Sighting SHARKEY’S CUTS FOR KIDS® TO DONATE SALON TO AT-RISK CHILDREN IN ISRAEL A Sharkey’s Cuts for Kids® Therapeutic Kids Salon will be launched in 2018, in the Talpiot Children Village, situated in Hadera, Israel. The salon will serve the 200 at-risk children and their families residing there. Talpiot is a non-profit organization whose mission is to reduce the number of at-risk children and youth in
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the region of Hadera and prevent risk situations in families. The Sharkey’s Cuts for Kids® Therapeutic Kids Salon will offer special activity programs for parents and children; recreational and creative art programs for kids; birthday parties; and joint activities with the community.
Do you know an outstanding franchisee who does great things on and off the field? Nominate him or her to be our next
FranchiseDictionary FranchiseDictionary FranchiseDictionary TO FIND OUT MORE THE ABC’S OF FRANCHISING CONTACT US AT:
editor@franchisedictionarymagazine.com THE ABC’S OF FRANCHISING
THE ABC’S OF FRANCHISING
January 2018 13
fran·chi·see \ fran-chī-zē, -chə-\noun
1. An outstanding franchise owner 2. A franchisee who does great things on and off the field
JOSHUA GRINSTEAD GYMGUYZ®
Bergen County, New Jersey
J
By Jill Abrahamsen
osh Grinstead was frustrated. It was 2012 and the job market was discouraging. Plus, he felt like he had plateaued in his career in higher education. He took a good look at himself and his future. “I asked myself, ‘Do I really want to continue being knocked around in this job market, or should I find something I really want to do and be my own boss?’” He decided to start his own business. At first, he wasn’t quite sure what that business looked like exactly. He spent two years researching his options before landing on GYMGUYZ,® a personal-training franchise. Recommended by Nick Neonakis, a consultant at The Franchise Consulting Company, GYMGUYZ® turned out to be a perfect fit for Grinstead. “I loved the GYMGUYZ® model right off the bat. It’s a really unique service with low overhead and tremendous potential.” It also helps improve people’s health, and thus, their overall wellbeing. “It has allowed me to make a difference in people’s lives,” says Grinstead. He’s not just talking about paying clients, either. Grinstead gives back to his community
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“My strategy is to ‘do well
by doing good.’ Being able to positively impact people’s lives is a priority.”
Above: Grinstead runs many free and at-cost community events, such as this senior class at a local community center. Right: The growing GYMGUYZ® team of Western Bergen County, New Jersey.
by offering free and discounted personal-training services to schools, homeless shelters, and assistedliving centers. “Some of these people need to lose weight or they could die. We go in and counsel them on nutrition and offer exercises that work for all fitness levels,” he says. His former experience running and managing career schools gave Grinstead the right skills to run the business. He knows how to manage operations, sales and marketing, motivate people, and work hard. While he wasn’t an exercise instructor by trade, he has always been a fitness enthusiast. The first order of business was to get certified as a personal trainer. “Although it wasn’t necessary for owning GYMGUYZ,® I wanted to have an in-depth knowledge of my business,” he says. “It really helped me in hiring and motivating employees. I’ve gone out with our trainers, worked with clients, and I’ve run community events.” Still, he spends most of his time growing the business, leaving the person-
al training to his team of fitness experts. “They do what they do best, and so do I.” Since starting in 2015 with three territories, Grinstead has grown his business to more than eight territories with 15 fitness coaches and a staff that includes interns, sales representatives, health coaches, and a director of business development. “I had been giving ‘my all’ working for other people, so I knew I could put in the work and be successful for myself.” These days, Grinstead is thrilled with his career. “I have never been more excited to get out of bed every morning,” he says. And though he’s working harder than he ever has before, the experience is a good one. “My wife says she’s never seen me this happy.”
February 2018 15
en·tre·pre·neur änn-trə-p(r)ə-'nər\noun
1. One who manages and assumes the risks of a business 2. An inspiring story about the start of Kono Pizza®
O
By Jill Abrahamsen
ne trip to Naples, Italy, back in July 2012, changed the lives of entrepreneurs David Ragosa and Carlo Ruggiero forever. It was there Ruggiero had an aha moment. He was having dinner at a little cafe in Naples. He looked around and saw people eating pizza on a cone. Intrigued, he ordered one and immediately, he was sold. “Not only was it delicious, but it was such a cool idea,” says Ruggiero. “I had to call David right away to tell him that this cone-shaped pizza was going to be the next big thing. We had to bring it to the States.” The phone call came through to David at 2 a.m. in New Jersey. “Even though Carlos woke me out of a sound sleep, I wanted to hear more,” says Ragosa. It wasn’t long before the pair began laying the groundwork for their business. By 2014, they opened their first Kono Pizza® in Edison, New Jersey. “Kono® cones are filled with fresh, quality ingredients. They are made to order and never pre-made or re-heated. Our dough and tomato sauce is imported straight from Italy,” says Ruggiero. There are more than 18 varieties of Kono® pizza, including classics like Margherita and pepperoni. For dessert, you’ll find old favorites like Tiramisu and cannoli. People love the concept and the convenience. “Teenagers were taking pictures of their cones and posting them all over Instagram,” Ragosa says. “It’s a lot neater and much more portable than traditional pizza. You can eat a Kono® without spilling sauce all over your 16
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shirt. Plus, you can eat it standing up, so it’s perfect for parties.” The pair soon discovered that the portability of their cones was better suited to crowds at festivals and sporting events rather than sit-down restaurants. So they moved away from their original brick-and-mortar set-up and went full throttle into kiosks and food trucks. “My only regret is not doing the market research early on and getting into the mobile business sooner,” says Ragosa. “Our product is perfect for it and the overhead is much lower.” The duo partnered with Penn State University, serving Kono® to Big Ten Football fans as well as at other university events. There are Kono mobile trailers everywhere from Pennsylvania to Texas. “Our business is quickly growing, and we have awarded more than 80 units.” Before Kono,® both men spent more than 10 years as franchisees in the food industry. The experiences helped them develop their own business, and it gave them an appreciation and empathy for their franchisees. “We are very involved in—and passionate about—Kono.® We give our partners tremendous support.”
David Ragosa
Carlo Ruggiero
“We each have three children, but we both think of Kono® as our fourth baby.”
February 2018 17
Little Kids Mean When it comes to franchises that focus on kids, the possibilities are endless—and so is the pay-out.
I
t’s a well-known fact: Even when times are tough, parents will always spend on their kids. Franchisors are well aware of Americans’ economic soft spot, and for the last 20 years, many have been capitalizing on it by investing in businesses that pertain to children. From education to recreation and retail, more and more franchises are targeting the needs of children. Those devoted, and often, overly busy parents, continue to make sure they are profitable. Investing in a business with kids in mind is not a bad idea. The latest U.S. Census estimates 22.9 percent of people living in this country are under the age of 18. That’s a market of approximately 74 million people—and that number is only expected to grow.
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BIG BUSINeSS by Lisa Welko
Certified Franchise Consultant
February 2018 19
Little Kids Mean BIG BUSINeSS FIND YOUR FRANCHISE With so many business opportunities out there, how do you narrow your search? Are you looking at home-based or brick and mortar? You may be able to offer childcare and tutoring at home, but a trampoline park? Not so much. How do you feel about a mobile business? Learning programs are great for this, or how about being a professional nit picker? It’s like being a superhero for a mom in distress. Any parent can tell you, it’s horrifiying getting a call from the school nurse announcing your child has lice. These services are a 911 for moms. They come right to your home and take care of the problem, with comforting moddos like Lice Happens’,® “No Shame, No Blame.” What are you interested in? Do you have a background in teaching? Maybe tutoring is the way to go. Do you love throwing children’s parties? Games on the Go® Mobile Arcade is a party in a bus. A truck rolls up and unfolds into an arcade for a child’s birthday party. It’s great for parents, a fun party with no clean-up! Did you do your research? There may be a franchise that plays to your strengths that you haven’t discovered yet. So take some time and consider all the options, then review the business model, the lifestyle, and the potential in your market, before you sign on the dotted line.
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Along with the market, business opportunities are skyrocketing. According to the Bureau of Labor Statistics, children’s businesses are on the rise, and there are many opportunities for franchisees. Why the recent growth? Competitive parents, for one. They’re willing to do whatever it takes to ensure their children’s learning equals—or surpasses—that of other students. Franchises like Best in Class give kids an edge on the Common Core, while others like Sylvan Learning help kids understand the modern world by emphasizing coding and robotics, along with traditional math, science, and writing. And while a dip in school budgets may be a hardship for public schools, it’s a boon for franchisors. With districts often unable to fund the arts in their curriculums, franchisees are filling the gap with local businesses offering art, dance, music, cooking, and drama. Abrakadoodle,® for example, lets kids experiment with paint, clay, and wire, while Drama Kids lets them unleash their inner Meryl Streeps.
Health and wellness play a role, too. According to the Centers for Disease Control, childhood obesity is an epidemic in the U.S. Though unfortunate, it opens up possibilities for kids’ fitness franchises, which by the way, also are seeing a surge. Take i9 Sports,® for example, which lets kids work up a sweat playing basketball, soccer, lacrosse—the list goes on—without worrying about winning. Or, The Little Gym, which gives pint-sized enthusiasts an introduction to gymnastics and karate. When it comes to franchises that focus on kids, the possibilities are endless—and so is the pay-out. After all, by enhancing the education and well-being of children, you’re investing in the future. Is there a better reward than that? Lisa Welko brings more than 15 years of business experience to the franchise consulting industry. Welko helps aspiring business owners determine which specific franchise opportunities align with their strengths, goals, and values. For more information, visit integrityfranchisegroup.com
February 2018 21
I’m taking these little monsters to the play place before I go nuts!
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CONFESSIONS OF AN INDOOR PLAY JUNKIE
A
By Jill Abrahamsen ny mom of small children will tell you, no matter how cute, an-
gelic, or well-behaved her little ones may be, a day alone in the house with a couple of preschoolers is enough to drive the most saintly parent up a wall. We’ve all been there. And while the saying “it goes so fast” may be true in a broad sense, some days with small children— especially during the winter months—can seem like an eternity. I’m not sure how my mother managed back in the ’70s, but I’ve been lucky enough to raise my kids in the era of indoor play centers, trampoline parks, music classes, and a host of other kid-centric entertainment venues. When my kids were young enough, I took full advantage. Not only were my kids happy and occupied, but I could get a guilt-free reprieve from being constantly “on.” These days, the children’s play industry has even more options—and not just for cooped-up families, but for business owners, too. Potential franchisees can choose from small gyms that have low start-up costs to massive mega-play centers for larger investors that incorporate indoor trampoline parks, obstacle courses, video games, and food. The themes are endless: rock-wall climbing, trendy escape-rooms, gymnastics zones, you name it. Thanks to the TV show “American Ninja Warrior,” ninja-training gyms are all the rage. Kids can take advantage of parkourstyle obstacle courses, rope swinging, wall climbing, as they compete like the athletes on their favorite television shows. Parents love that the workouts build confidence, strength, and endurance,
while franchisees are thrilled by the hoards of parents signing on to help their little guys achieve ninja status. What a great way to make a living: You’re enriching kids lives, helping them develop, and getting to know your community, all in a day’s work. Back when I was juggling two toddlers, my favorite day of the week was Tuesday when I had a regular class scheduled at a local indoor children’s gym. Not only were my little ones fully engaged, active, and happy, but I got to kick back and chat with other parents. Real adult conversation—a perfect slice of mommy heaven. As the kids got a little bigger, one of my frequent hangouts was a local play place that had an enormous ball pit, a massive stretch of elevated tunnels, and giant inflatable slides. I’d meet up with friends and we’d wave our kids on as they charged through the tunnels or joyfully jumped into a mass of colorful plastic balls. While now I may be well past my days of indoor play gyms, my old hangouts still make me smile. Every time I pass by and see a new crop of young moms going inside, I look at my teenagers and think, “It really does go fast.”
February 2018 23
COVER STORY
e u q uni
s ’ d Ki Franchises
If you’re looking to buy into a fun business with big potential, kids franchising is the way to go.
F
By Jill Abrahamsen
rom enormous play centers to home-based tutoring to health and beauty treatments, children’s service franchises are taking off. Kids are presenting a myriad of opportunities for potential business owners, and there’s never been a better time to take advantage of them. On the following pages, we feature a handful of unique children’s brands developed by entrepreneurs, who answered kids’ needs with creative business models. Take Challenge Island,® for example, an educational franchise that teaches important 21st-century life skills “Survivor” style. The need to get kids moving at an early age gave birth to great fitness businesses, like Kids in Sports.® Other entrepreneurs address common parental headaches like, “Who do I call if my child gets head lice?” or “How can I get my fidgety toddler to sit still for a haircut?” Here, industry leaders share their stories and reveal the business side of benefitting children. If you’re in the market for a flexible, profitable business that includes bright smiling faces and the opportunity to make a difference in your community, a children’s service franchise could be right for you. 24
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Sharon Estroff CHALLENGE ISLAND® A SELF-ADMITTED REALITY TV JUNKIE, SHARON ESTROFF HAD AN
epiphany while watching the hit show “Survivor” back in 2002. A school teacher, who was always looking for ways to make learning more fun, Estroff wondered, “What if I turn the classroom into an island, divide students into “tribes” and create challenges that promote higherlevel thinking?” She tried it out as an after-school enrichment program, and students loved it. Soon she had a waiting list of students wanting to get in. Fast-forward to today, Challenge Island® is now a booming franchise with more than 50 partners and 70 territories, and it continues to grow. Estroff personally creates and constantly adds to the curriculum, which incorporates science, technology, engineering, math, and art (STEAM). Kids have fun and develop important life skills like collaboration, compromise, resilience, and critical thinking. Hundreds of themed lessons target specific age groups, including, “Fantastic Fiction,” “The Cat in the Hat Challenge,” and “Mythology Challenge.” With many revenue streams, such as camps, enrichment classes, birthday parties, scouting events, and senior programs, franchisees get flexibility and unlimited applications to customize businesses. Challenge Island® offers a mobile home-based model with low overhead and high margins. Estroff says, “We give tremendous support to our partners and look for franchisees who want to make a difference.”
February 2018 25
COVER STORY
Rosemarie Hartnett ABRAKADOODLE® IT WASN’T AN ACCIDENT THAT THE ART PROGRAM ROSEMARIE Harnett founded back in 2002 would become a successful franchise. “Franchising was in my
blood. I came to really understand the great benefits of the franchise model and see how, with a great concept, systems, training, and support, it can create a path for business ownership,” she says. “My former partner (now retired) and I saw the cuts in art education and decided that we had a great opportunity to nurture children’s imaginations and creativity while creating a great business.” The partners personally ran the first model, and started franchising by 2004. Today Abrakadoodle® is a highly regarded children’s art program with more than 300 locations worldwide, including China and Singapore. The concept is simple and flexible. With low overhead and a quick start-up time, franchisees can customize businesses and bring art to schools, camps, events, and parties. Developed by a team of experts with Master’s degrees in art education, the curriculum is always being improved. Franchisees do not need any particular professional backgrounds, but relationship-building skills are a plus. “They need to reach out to schools and community leaders to introduce the program. Our franchise partner’s main role is to manage, maintain, and grow the business. We offer constant advice and education to our partners, and they are always collaborating and sharing ideas. There is a great support system,” she adds. Any regrets for Harnett? Not at all. “I have meaningful work doing what I love. It doesn’t get any better than that.” 26
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Amir Asor e2 YOUNG ENGINEERS® FOUNDER AND CEO OF e2 YOUNG ENGINEERS,® AMIR ASOR STRUGGLED in school as a child. It wasn’t until he entered college that the Israeli native realized the traditional classroom setting bored him. Like many students, he responded better to hands-on learning rather than lectures and fact memorization. In 2008, at the age of 24, Asor developed a program where children could understand complex engineering principles through the visual aspect of building LEGO® models. He then decided to create a range of engineering enrichment programs for school-age children starting as young as 4 years old. The first Israel-based location turned out to be very successful. So in 2012, he started to franchise e2 Young Engineers® throughout Israel and eventually worldwide. Today, there are roughly 150 franchisees in 45 countries. Asor’s mission is to get children excited about engineering. He accomplishes this by offering programs that teach mechanical-, electrical-, software-, and robotics- engineering in a fun way, giving students skills they will need in the 21st century. Franchisees can run programs, either as after-school activities, within the school curriculum, or in separate educational centers. This home-based business offers low overhead, high margins, and a lot of flexibility. The company is continuously creating new educational programs, like a recent addition that aids children on the autism spectrum. New apps, developed by the company, help leverage programs. New franchisee training includes launching, operations, marketing, and pedagogical lessons. “We constantly follow up with our franchisees and assist them along their journeys,” Asor says.
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COVER STORY
Stacey Kimmins THE FUN BUS® IF YOU SEE A COLORFUL GREEN BUS DRIVING DOWN THE ROAD
you can be sure a group of preschoolers are about to have a blast. FUN BUS® brings fun, fitness, and learning to children in schools, daycares, at birthday parties, and special events. This interactive program fosters a love of fitness and focuses on developing gross motor skills. The franchise model was launched in 2004 by a former preschool owner. Current CEO Stacey Kimmins purchased the business from her in 2014. Kimmins saw huge potential and FUN BUS® is on the road to significant growth with a shiny green fleet of more than 36 buses in 10 states. Several franchisees are set to have wheels rolling in 2018. With the slogan of “passion and fun equals profitability,” Kimmins seeks franchisees who want to focus on marketing and growing the business. Fun buses are retired school buses that have been gutted, refurbished, and transformed into magical play gyms, complete with slides, tunnels, and equipment, music, and lesson plans to get started. No special driver’s licenses are needed, since the gutted buses meet the weight requirements of regular vehicles. Franchisees reap the benefits of quick start-up, low overhead, and repeat business with strong ROI and quick scalability. But according to Kimmins, the best part is, “We have the opportunity to have a positive impact on the lives of many young children by providing a healthy and safe environment for skill development and smile creation!”
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Michael Strutt & Kenneth Colon KIDS IN SPORTS® ON A MISSION TO PREVENT SPORTS BURNOUT IN KIDS AND CREATE
a love for athletics, Michael Strutt and Kenneth Colon developed Kids In Sports.® The program helps younger children learn the fundamentals of sports, along with coordination, adaptability, and social skills. Both former collegiate athletes, Strutt and Colon hold degrees in physical education and exercise physiology. In addition to teaching, they’ve also worked as personal trainers and coaches. The pair was very hands-on when they opened their first Kids in Sports® in New York City back in 1999. After perfecting the model, they chose franchising as the best strategy for growth. The brand exposes children to a variety of sports including basketball, soccer, lacrosse, and baseball, to name a few. They offer classes, camps, and parties for children ages 2 to 12. “Franchisees and operators need to be somewhat athletic and have energetic personalities. Most importantly, they need to be hard working, which luckily is a trait found in many athletes,” Strutt says. “This is a hands-on business where you need to have the passion for coaching young kids. A large part of the business is preschool-aged children, so there is a lot of energy needed to teach them correctly.” Kids in Sports® is a build-out model. For additional revenue streams, franchisees can add satellite locations and rent out churches, parks, and community centers. The advantages of Kids in Sports® ownership? “It allows you to stay active without sitting behind a desk all day. But the biggest pro is fostering the development of children. No matter what subject you’re teaching, there’s nothing better than seeing kids happy and proud of themselves because they are accomplishing something,” says Strutt.
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COVER STORY
Renae Gaudette ONCE UPON A CHILD® NEW PARENTS ARE OFTEN SHOCKED AT HOW QUICKLY THEIR
children grow out of their clothes, toys, and other items that cost top-dollar. Back in 1985, Dennis and Lynn Blum, found a solution for this problem. The Blums had three growing boys and were looking for a way to recycle the items they no longer used. Plus, they wanted to buy new things at affordable prices for their rapidly growing family. The idea was simple—provide a fun, efficient process for families to buy and sell their kids’ used stuff. They opened the first Once Upon A Child® store in Perrysburg, Ohio. In 1992, Winmark Corporation® purchased the franchise rights from them and began franchising the concept in 1993. The brand is built upon buying and selling gently used kids clothing, toys and equipment. The franchise pays cash for items that children no longer want or need. It’s a win-win for parents. They save money and can feel good about what they are doing. “We believe in focusing on one store at a time and ensuring that our franchisees can meet certain sales, financial, operational metrics that are profitable and have good cash flow before awarding additional locations,” says Reane Gaudette, VP of Franchise Operations. “This focus has helped us go from $400 system average in the mid-2000’s to nearly $1 million. It has worked out well for our franchisees as more than 30 to 40 percent own multiple locations.”
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Anthony MacNeil PREMIER FLOORBALL INC. ALTHOUGH FLOORBALL HAS BEEN AROUND FOR MORE THAN 40
years internationally, the sport is just starting to trend in North America. With a background in franchising and a passion for athletics, Premier Floorball, Inc. president Anthony MacNeil saw an opportunity to make the sport accessible to everyone with a home-based franchise model. As a hockey coach and referee for many years, MacNeil recognized that floorball offered a kinder, safer team sport that was more about etiquette and sportsmanship than aggressive competition. Floorball is a non-contact game with an emphasis on safety and respect. Players use a lightweight ball and stick and enjoy fast, fun play that is safe and engaging. “This is especially appealing to moms and dads,” says MacNeil. “One mother told me that she was so happy she could just relax and enjoy watching her son play without the worry of injury or altercation.” To keep costs down for potential investors, MacNeil decided that a home-based model was the way to go. Franchisees don’t need to invest in expensive build-outs or commit to leases. Instead, they develop relationships with community leaders, use local facilities, and rent out spaces at arenas. The brand offers many options for players, and multiple revenue streams for owners, including off-ice hockey training clinics, school programs, birthday parties, local leagues, and equipment sales. “Franchising puts the system in place for consistency in every location, something that many community-organized sports fall short in doing,” MacNeil adds. Though new to Americans, floorball has been played in almost 80 countries around the world. In fact, 65 countries are recognized members of the International Floorball Federation (IFF). Premier Floorball Inc. plans to start franchising in the U.S. by the end of 2018. The company is currently seeking partners to grow the brand. The timing is perfect. NHL teams, like the Dallas Stars, the New Jersey Devils, and the Florida Panthers, are creating a buzz by starting floorball initiatives. It’s a low-cost way to get kids interested in hockey without a huge commitment for parents.
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COVER STORY
Scott Sharkey SHARKEY’S CUTS FOR KIDS® WHAT DO YOU GET WHEN AN ADVERTISING PROFESSIONAL AND A
businessman put their heads together to come up with a concept for a new business? In the case of Linda and Scott Sharkey, you get a winning franchise model. Back in 2001, both Linda and Scott were at a crossroads in their careers. So, they began exploring what their next step might be. “What if we opened a hair salon for kids?” Linda asked. She hated dragging her own children to get haircuts and knew a salon that catered to children would be a raging success. Scott crunched the numbers and realized it could be a great business. In 2002, they launched their first Sharkey’s Cuts for Kids® in Greenwich, Connecticut. It was an immediate success, and eventually they opened a second location. In 2006, the Sharkeys were approached by a buyer interested in the brand, which led them to convert to a franchise model. Today, with 51 locations in the U.S., an expansion into Canada and the U.K., and a projected 150 locations by 2020, Sharkey’s is a hit with kids and parents. Kids get to sit in novelty chairs like the pink Barbie Jeep, or Lightning McQueen race car and watch shows or play video games, while they get their hair cut. Sharkey’s also offers “glamour days” birthday parties, which take place in the teen/tween lounge, where the birthday girl and her friends are treated like celebrities. Franchisees find Sharkey’s Cuts for Kids very easy to operate, and they enjoy multiple revenue streams, including an entire product line. Sharkey’s also offers cuts for parents. “Our ideal franchisee is a passive owner,” says Scott. “Owners should focus on marketing and growing their businesses and have their employess operate the shops.”
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Dawn Mucci THE LICE SQUAD.COM® EVERY MOTHER DREADS THAT CALL FROM THE SCHOOL NURSE SAYING
that her child has head lice. It elicits panic, not to mention immediate itchiness. After being on the receiving end of that phone call, LiceSquad.com’s CEO and founder Dawn Mucci decided to do something about it. “I saw a problem that needed to be solved and a gap in the market place. I pioneered the lice-removal industry by offering eco-friendly, head lice-removal services, education, customer service, and a full line of exclusive products,” she says. “Before starting Lice Squad.com® in 2001, I was a single mother on assistance with only a high school education. Lack of resources and education causes one to learn how to hustle and see opportunity where others do not. Depravity has a way of inspiring risk-taking and entrepreneurial success,” she adds. That hustle paid off. Mucci now has more than 200 providers operating with 35 franchise locations throughout Canada. “Our plan is to sell the rest of Canada’s 35 locations and focus on the U.S., where we hope to see more than 200 providers by 2020.” For parents, LiceSquad.com® is a lifesaver. The service gets rid of head lice fast. Take your child to one of the incognito clinics, and a certified lice-removal technician will comb through the child’s hair, removing the lice, and then treat the hair with nontoxic lice removal products. While a child is being treated, parents are offered relaxing cups of tea. “This is often a more stressful event for the parent than the child,” Mucci says. During the process, experts educate clients on prevention and offer advice on what to do should lice return. The clinics look like ordinary offices on the outside, but inside, they are cute salons adorned with super heroes and fun, colorful decorations. LiceSquad.com® clinics don’t have to be in prime locations. They’re usually in medical buildings or industrial parks. “Our mission is to change the way people treat head lice and to meet a universal demand for head-lice removal by delivering environmentally friendly products and services,” says Mucci. “We aim to dispel the stigma associated with head lice and to stop the overuse and abuse of pesticides on children and our environment.”
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COVER STORY
Rob Price SCHOOL OF ROCK® WITH A MUCH DIFFERENT APPROACH TO MUSICAL EDUCATION THAN
staid repetition, School of Rock® engages students with the music they love and the thrill of playing live shows with fellow musicians. Every year, students perform 4,000 live gigs at events including Lollapalooza, MoPop, and Summerfest, and at venues such as Red Rocks Amphitheatre, Rock & Roll Hall of Fame, and hotspots on Los Angeles’ Sunset Strip. Choosing from among five instruments found in a typical rock band—keyboards, bass, guitar, drums, and vocals—students can sign up for music programs as early as preschool. By age 8, they can be on stage. By the time they’re teenagers—if they’re good enough to make the cut— they might even go on tour with the School of Rock’s AllStars band. Founded in 1998 by musician Paul Green, School of Rock now has 205 schools in nine countries around the globe. “We plan to open 20 new schools in 2018 and celebrate our 10th market with an outstanding new school in Lima, Peru. We have ambitious growth plans for many years to come,” says Rob Price, current CEO and president. School of Rock combines a passion for music with a love of teaching, community building, and performing. “Our business enriches lives through performance-based music education,” says Price. “This is far more gratifying than conventional franchises, where you simply follow a formula.”
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February 2018 35
Raising
SuperKids
The children’s franchise industry is booming. Here’s what it means for potential investors.
R
by Mariel Miller
aising children in today’s competitive world is no easy proposition. After all, a child’s day isn’t just about going off to school and then swimming in a sea of free time. Now it’s about round-the-clock enrichment—learning new languages, instruments, life skills, sports, and so on.
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While creating the well-rounded child may be a noble goal, it’s tough for any parent to conquer alone. That’s why so many are calling in the cavalry, enlisting experienced teams of tutors, coaches, musicians, and worthy child-care providers to help turn ordinary kids into extraordinary human beings. Whether or not you agree with the current state of parenthood, you can’t deny that it’s happening. But don’t take our word for it—look at the growth of children’s service franchises, which is booming. If you’re in the market for a franchise, getting involved with a business that serves children—and their parents—could be a smart way to go. The Multipyling Market In Entrepreneur’s 2014 “Franchise 500” business sector ranking, children’s services ranked among the top five fastest growing franchise sectors. It makes sense. After all, the child-related franchise category comes with a growing customer base. The U.S. Census Bureau estimates that 74-million people in the U.S. are under the age of 18, and that number is expected to grow to 80 million by 2030. Parents—and often, grandparents—are the real spenders, of course. And the more they have, the more
they are likely to spend on their children. According to the U.S. Department of Agriculture’s (USDA) “2015 Expenditures on Children,” parents with two children and a pre-tax income of $102,870 spent between $20,420 and $24,510 per child, per year. Profitable Opportunities With a growing market and parents who are consistently ready to spend, child-service franchises pose very profitable opportunities. Obviously, the initial costs of owning a child-related franchise vary based on the business model. According to a 2015 Franchise Grade report, 75 percent of children’s service franchises have achieved positive net growth between 2010 and 2014, and they’ve generated more than $450 million in revenue per year. Monetary benefits are just one piece of the puzzle. Children’s service franchises also allow you to enrich the lives of kids, which makes work personally rewarding, as well. Childcare Centers These days, there is a wide variety of growing children’s service categories to choose from. Childcare franchises, for example, are doing very well and
FRANCHISE OPPORTUNITIES AVAILABLE February 2018 37
With a growing market
and parents who are consistently ready to spend, child-service franchises pose very profitable opportunities. they’re only expected to grow. In fact, the U.S. Bureau of Labor Statistics projects the fastest employment growth of all industries through 2020 will be in childcare, as the under-5 population is expected to skyrocket from 24 million to 30 million in 2050. Childcare franchises offer various types of businesses. Some childcare centers go beyond standard daycare and offer education as well. For example, Lightbridge Academy provides an early childhood education program during daycare. Another advantage? Working parents stay connected through a Web camera and get updates on their children via a parent app. Educational Franchises Educational franchises are also worth consideration. With 55 million children in school, tutoring in the U.S. has become a $7 billion industry. In fact, tutors are no longer just for kids who need extra help; now they’re also for children who want to get ahead. Franchises like the Tutor Doctor understand each child’s individual needs and strives to meet them. Along with tutoring, the educational franchise category includes test-prep centers, which tend to see growth as standardized tests evolve. 38
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Fitness Franchises You can’t discount sports and fitness franchises. Children who exercise are less likely to become overweight, depressed, and will have stronger muscles and leaner bodies. Their parents know it. That’s why so many are getting their kids involved in fitness activites when they’re as young as 12 months. Tween Spending These days, parents aren’t the only ones shopping for their children, which makes retail franchises for children another opportunity. Kids have $21.4 billion worth of purchasing power. Tweens (ages 8 to 12) have their own discretionary dollars, and they’re likely to purchase what they want with some guidance from their parents. Needless to say, the retail segment is strong with toys, games, electronics, and sporting equipment. Of course, no matter which category you choose, with opportunity comes risk. But by all indications, the children’s sector in franchising is strong and sustainable. With the right motivation and a desire to make a difference, a partnership with a quality franchisor could be your path to financial freedom and satisfaction. Mariel Miller, owner of The Franchise Advisor, works nationwide with individuals who are actively looking for business opportunities. For more information, please visit thefranchiseadvisor.com
Know Your Franchise Model: Does the business model allow me the quality of life I seek? Is it scalable? Method: What is the unique way the product/service comes to market? Training: Will I be sufficiently trained to be successful? How intensive? How much ongoing training and support will I receive? Technology: Is the technology solid and does it support the delivery of the product/service as well as daily operations and management? Is it unique to this franchise? Can technology be a threat to this business? People: Are there human resource protocols? What kind of team do I build and what types of people should I work with? Who are the people at the franchisor level I will deal with regularly? What experience does the franchise leadership bring to the equation? Processes: Are there proprietary systems? Are they comprehensive and do they cover all the key areas of running a business? Am I comfortable with the customer acquisition processes?
FRANCHISE OPPORTUNITIES AVAILABLE February 2018 39
Learning Curves T
By Candace Ditsch
he difference between starting a business and buying a franchise starts with one simple fact: A franchise has a proven model for success. Sure, this means you’re buying into a brand that you already know customers want, but there’s another advantage as well: Training. You can propel yourself into the stratospheres of success by learning how others have already triumphed. Franchising and training go together like peanut butter and jelly. Training is the best way to gain information and learn strategies to help bring a product or service into a local market. When you are researching a brand, ask about the style and depth of training. The education is important for both the brand and for local operations.
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But training isn’t a one-size-fits-all proposition. How do you know if the franchisor’s training style will suit your needs? Here’s a guide. DOES THE TEACHING STYLE APPEAL TO YOUR LEARNING STYLE? Training is only valuable if you’re able to absorb it. So the question is, how do you learn? Do you prefer reading? Watching videos? Online tutorials? Handson instruction? Learning styles are different for different people—be sure the franchise brands you are considering offer the kind of training that works for you. Once the training process begins, it’s not likely to change. DIVE INTO THE DETAILS. Another key to superb franchise training is depth of information. By this we mean the level of detail, not necessarily the amount of information. Does the franchisor offer multiple training videos on a topic with specific examples? Or, is there a simple handout with a contact number? Does the brand provide marketing steps with a timeline? Or, do you get a sheet of paper listing tips about using social media? The degree of depth for various top-
ics could mean the difference between implementation and frustration. PRESENTATION MATTERS Consider how the training material is organized and divided. Is there a manual on the in-house franchise software, plus a workbook on marketing, and an online tutorial about how to get the best deals from vendors? Presentation and ease of research are important when you’re launching a franchise locally. The more specialized the training, the more detail you’ll get on each subject, and that makes things easier to follow. WHAT ABOUT TIMING? When is training available? Can you watch videos on inputting a work order in the evenings? Is there a support desk you can call after hours? Can you make the live webinars? Find out how much content is available at your convenience and how much is only available during normal business hours. Candace Ditsch’s company Franchise Training creates training systems for franchises. To learn more, visit FranchiseTraining.org
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The Truth About Royalty Fees
by Christopher Conner
W
hen you buy a franchise, it’s common to pay an initial fee for the rights to training, support, and intellectual property that comes with the franchise offering. But that’s not the only fee that comes with a purchase. Along with the initial franchise fee, you also pay a separate royalty fee for the ongoing rights to the franchise model. Royalty fees come in all types of structures, and they’re defined in a variety of ways. Foodservice franchisors often charge royalties on a weekly basis; though monthly royalty fees are most common. The specific amount due is usually a percentage of the previous month’s gross sales. So say royalties are seven percent of gross sales, and a franchisee generated $50,000 in gross sales for a given month. The franchisee would pay a royalty of $3,500 at the start of the following month.
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Royalty fees can seem steep
for anyone launching a new business, but when a franchisor delivers huge value, you get what you pay for. Some franchisors have royalty fees that are as high as 20 to 30 percent of gross sales, and they cover the cost of services from the franchisor. H&R Block, Liberty, and other tax-preparation franchises process tax returns and provide administrative support for franchisees. Technically, that office support could fall under operational expenses, usually covered by the franchisee, but here the franchisor performs them as part of the royalty agreement. ROYALTIES AND RELATIONSHIPS Regardless of the structure, if you’re considering a franchise investment, look at the services you get and make sure it’s worth the cost of the royalty fee. How can you tell when the value of the franchisor’s services isn’t always a tangible line item? Granted, the process requires some business intuition, but there are ways to put a dollar amount to the value proposition offered by a franchisor. Look at the franchisor-franchisee relationship of a large corporate entity in a retail business, for example. You’ll have an executive team in the corporate office and a grassroots team providing services on the ground level. At the corporate level, the executive team may be working on strategic initiatives, like selling to large accounts, developing e-commerce, or finding discounts and suppliers. Back at your local franchise, you can remain focused on operations, marketing, and store management. Meanwhile if you owned an independent store, to accomplish the same strategic marketing, you would need to hire marketing executives, Web experts, and an experienced sales team, all of which would require salaries, additional overhead, and benefits. Those costs add up. Yet with a franchise, you get an executive team that is working on your behalf to accom-
plish initiatives for only seven percent of your gross sales. Suddenly, the royalty fee seems very reasonable. Of course, this is all assuming that the franchisor delivers the value and services promised. So, before you make your franchise purchase make sure you understand the dynamics of your franchisee-franchisor relationship. The Franchise Disclosure Document (FDD) can help; it spells out each party’s specific responsibilities on paper. The FDD also lists previous franchisees who have bought the franchise and who have failed with the franchise. Make some calls and ask these franchisees if the franchisor lived up to his responsibilities to verify that the value proposition is legit. See if these previous franchisees have had a positive experience with the brand, and confirm you are dealing with a franchisor who will look out for your interests as a franchise owner. A HAPPY MARRIAGE The franchisor-franchisee relationship can be an excellent marriage of resources and talent, but like any relationship, it has to be clearly defined. Sure, royalty fees can seem steep for anyone launching a new business, but when a franchisor delivers huge value—and takes some big-picture responsibilities off your plate—then just maybe, you get what you pay for. Christopher Conner has spent the last decade in the franchise industry working with hundreds of systems in management, sales, and development. Conner leads the Franchise Marketing Systems team in business consulting and franchise development projects. For more information, please contact Christopher Conner at Chris.Conner@FMSFranchise.com
February 2018 43
in·ter·view
\�in-tər- vyü \ � noun
1. A Q&A session with a franchise industry expert 2. Mariel Miller on the past, present, and future of franchising
QA &
With more than 27 years of experience in
franchising, Mariel Miller, owner of The Franchise Advisor, works nationwide with individuals who are actively looking for business opportunities and investment options. Her clients want to enhance quality of life, increase flexibility, and improve net worth. Here, she talks about the status of the franchise industry and the challenges that potential franchisees face today.
Q
How has the franchise industry changed since you entered the business?
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A
I started in franchise consulting in 2004. The recession and corporate downsizing have led to an abundance of new, low-investment franchise options entering the market. There’s a variety of these businesses in every sector, and they allow people to enjoy the benefits of a proven system with a small investment. Many of these franchises are home-based, offering freedom and flexibility and a faster ramp-up time than traditional brick-and-mortar storefronts. These options are great for women who are re-entering the workplace or want work-life balance. Technology has impacted franchising, too. Often, operations can be managed remotely, which allows franchisors to offer semi-passive business models. These models attract corporate executives, who have no intention of leaving their jobs to open a business, but want the benefits of investing in growth-oriented brands. Semi-passive, multi-unit franchising is, perhaps, the most exciting development in franchising today. I’ve seen franchising on a whole become more sophisticated. These days, top-performing franchises emphasize positive franchisee-franchisor relations and franchisee performance, satisfaction, and unit-level profitability. Lastly, franchise executives from the best brands join organizations like the International Franchise Association (IFA) and attend events like the Franchise Update Leadership Conference, where they regularly share best-practices and stay up to date on how to run a better, more successful system. The talent pool inside franchise systems is remarkable and franchising continues to attract a higher caliber of franchise executives and investors.
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QA
How do you help a client decide on a franchise? Most people we meet are looking to build wealth and improve quality of life. That means different things to different people. For some, it’s a career change, for others, it’s a semi-passive investment. Before evaluating risk tolerance, strengths, and interests, we explore income and lifestyle goals. Then we determine if franchise ownership is the right vehicle to get there. If so, we work to determine the exact characteristics a person would need in a business to find it investable. With a model that is grounded and realistic, we do an extensive search across dozens of categories and determine the very best fit of brands to their model. Once we have narrowed the options, we educate and coach clients so they become savvy investors, asking the right questions and getting the answers they need to make informed business decisions. The whole process can take as little as three to four months.
QA
What are some obstacles facing potential franchisees?
Q
Clients struggle with “information overload,” and they lack a systematic way to find the best concepts for them. With the abundance of information available, it’s hard to know which sources to trust, whom to listen to, and where to go for critical decisionmaking information. More than 3,300 brands franchise today. Spanning more than 36 sectors, they offer a variety of business models with different financial equations. Without a good process, folks start a search which is too narrow, or focus only on what they know or where they have been. This is unfortunate because potential options are vast. Franchisors look for transferable skills, not necessarily industry-specific skills. This widens the pool of options greatly. Fear is the other hurdle, and most folks hit it sooner or later. Business ownership requires taking a leap, and some find it difficult to leave their comfort zones. Anxiety is normal, but often, folks leave unanswered questions on the table and exit the process too early. I let my clients know that it’s all education until the franchisor makes you an offer. Only then do you say yes or no. If you have done due diligence, you’ll know with a degree of certainty that you have found the right investment.
Are you optimistic for the future of franchising?
A
At every income level, opportunities in franchising have never been better. More and more individuals are realizing franchising offers a viable route to building wealth and equity and can offer desirable lifestyles. People are open to having conversations about their options. So, I am very optimistic. Economists predict continued growth in franchising, and back at our franchise consulting firm, we are seeing a surge of interest in our services. This tells me the future is very bright.
February 2018 45
spot·light
\�spät-�līt \ noun
1. Trending franchise businesses you’ll want to hear about 2. A great place to show off your franchise
Snapology®
Waxing the City®
Hand & Stone® The health and personalcare market is exploding. With a simple but unique concept, Hand & Stone® has the business model that could help you profit from this fast-growing industry. The concept is simple. The company offers affordably priced, conveniently located, top-quality therapeutic massage, facials, and hair-removal services. The membership program offers discounted services for repeat customers. For more information, call 888-627-7243.
Looking for a homebased franchise with a low investment and high return? Snapology® provides the tools to operate and manage a thriving business. Based on collaborative principles, Snapology® has a flexible model that allows business to grow while incorporating your goals. Snapology® is a partner for STEAM programs, offering fun, hands-on learning classes in schools, community centers, and homes. For more information, visit snapology.com
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Waxing is a fast-growing segment of the booming salon industry. The concept continues to gain in popularity, which makes this business suitable for a variety of markets and communities. Waxing the City® offers a lowcost franchise opportunity in the salon industry and across other industries. For more information, visit waxingthecity.com, or call 866-956-4612.
®
®
GYMGUYZ®
Abrakadoodle® Innovation and imagination are rated as top skills needed by students to compete in a global economy, and creativity is one of the most important skills needed for success in school and the workplace. Abrakadoodle® is all about creativity for kids. Abrakadoodle® brings art to kids in schools and communities. The program provides well-trained teachers, who help inspire kids to immerse in learning and creating art—sometimes getting messy but always having a blast. This low-cost, mobile, home-based business offers multiple revenue streams, including classes, camps, events, parties, and adult programs. For more information, visit abrakadoodle.com
®
With more than 160 locations in 24 states and two countries, GYMGUYZ® is the first home-based, mobile personal-training and fitness franchise company. GYMGUYZ® offers individualized one-on-one workouts, group instruction, and corporate fitness. Trucks are stocked with state-of-the-art fitness equipment enabling the GYMGUYZ® coaches to provide clients with customized workouts. GYMGUYZ® offers a low investment, turn-key model. Franchise owners get support from inception and throughout the entire process. For more information, call 855-GYM-GUYZ.
Challenge Island® Inspired by the popular CBS reality TV show “Survivor,” Challenge Island® is a unique and rapidly growing educational franchise. Incorporating STEAM education, the program takes children on imaginative journeys to an array of thematic islands. Each island is made up of numerous “destinations,” where children work in collaborative tribes on action-packed challenges. With low start-up costs and multiple revenue streams, including enrichment programs, camps, and parties, Challenge Island® is worth a look. For more information, visit challenge-island.com
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February 2018 47
spot·light e2 Young Engineers® Cherry Blow Dry Bar Cherry Blow Dry Bar is an expanding franchise that provides premium express salon services, including signature blowouts and make-up application. Add-ons, like scalp massage and permanent hair extensions are also available. The unique membership model keeps costs down while bringing in repeat business. This makes stylists busy and happy. Multiple touchpoints provide additional revenue for franchisees, including add-ons, express services, and retail products that directly support services. For more information, visit cherryblowdrybar.com
FUN BUS®
FUN BUS® is an exciting, interactive program that brings fun, fitness, and learning to children. Whether it is traveling to schools, daycares, birthday parties, or special events, FUN BUS® has a hands-on approach to making fitness fun for children. FUN BUS® offers hundreds of developmentally appropriate, theme-based lesson plans that target gross motor skills. The program offers a safe, colorful, fitness environment, complete with trainers to guide kids through activities onboard a parked bus. This turn-key business offers low overhead, repeat business, full training, and ongoing support, all in a quick start-up time. For more information, please visit funbuses.com
You’ll find rewarding enrichment programs at e2 Young Engineers.® By participating in workshops, students are introduced to the world of mathematics, physics, and engineering at an early age. The folks at e2 Young Engineers® aim to make this kind of opportunity available to children around the globe. The focus is on early intervention in order to create a passionate and highly skilled next generation of engineers and scientists. A mobile, home-based business, e2 Young Engineers® franchisees can enjoy flexibility and low overhead. For more information, visit youngeng.net
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Kono Pizza®
Sharkey’s
Cuts for Kids® Parents don’t have to drag their kids for haircuts anymore. With Sharkey’s Cuts for Kids,® children are delighted to go. They get to sit in novelty chairs such as the pink Barbie Jeep, or Lightning McQueen race car and watch shows or play video games. Sharkey’s also offers “glamour days” birthday parties, which take place in the teen/tween lounge where the birthday girl and her friends are treated like celebrities. Franchisees find Sharkey’s Cuts for Kids® very easy to operate and enjoy multiple revenue streams, including an entire product line. For more information, visit sharkeyscutsforkids.com
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An original idea that turns the traditional triangle-shaped pizza pie slice into a cone, Kono Pizza® is all the rage. Cooked on the spot, Kono Pizza® is healthy and fresh, and you can eat it anywhere. The business model is portable and flexible, too. Franchise owners and licensees can operate food carts, trucks, or trailers. Thanks to the mobility, franchise owners avoid expensive build-outs and high overhead. And they don’t have to wait for customers to find them. Instead, Kono Pizza® franchise owners go where the people are. For more information, visit konousa.com
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The Patch Boys® Want to run a homebased business with low overhead and high profit margins? Check out The Patch Boys.® America’s most trusted drywall repair company, The Patch Boys® takes care of damaged drywall caused by clumsy accidents or water damage. These jobs are usually too small for contractors, and most homeowners don’t have the time or skill to take care of drywall repair themselves. When you join The Patch Boys® family, you become a part of an entrepreneurial community that works together to advance the brand. For more information, call 844-99-PATCH, or visit thepatchboys.com
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last word
\ last \ \ wərd \ noun
1. Words of wisdom for any new business 2. Smart choices made Kona Ice® a hit
Kona’s Winning Formula The secret to success for this creative franchise is simple: Think Outside the Box.
1. Start with a great idea. In 2007, Kona Ice® founder Tony Lamb decided he would create a much better version of the usual ice cream trucks that came around his neighborhood. He envisioned something clean and community friendly—and something that made healthy snacks enticing. 2. Create a quality product. Fruit is the main ingredient in Kona’s “FruitFirst” ice. Sweetened with pure cane sugar and all-natural Stevia leaf extract, the 24-calorie snack meets federal nutritional standards for school. 3. Have fun. Kona takes its island theme to heart: The sounds of steel drums and tropical music greet customers. Palm trees, sand, and blue water painted across truck facades make you feel like a castaway. And snacks are fun, too. With Flavorwave® for example, you can add as many flavors to your ice as you like. 4. Give back. Fundraising is a huge part of Kona’s business model. Every year, the franchisees give millions to community organizations across the country. 5. Keep innovating. Franchisees can customize their businesses with a variety of trucks, trailers, and kiosks. Kona is constantly improving and expanding the product line, with fun add-ons like the new gaming app, Island Rush. 50
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THANK YOU
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2018:
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