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FRANCHISES TAKING THE LEAD
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DO THE TIME WARP WINTER 2007/2008
Franchise America’s Resource For Entrepreneurs and New Businesses
TOP
100
FASTEST GROWING FRANCHISES
MARKET MAGAZINE
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Winter 07/08
Contents WINTER 07/08
Franchise [MARKET MAGAZINE ]
23 TOP
100 FASTEST
GROWING FRANCHISES Our look at the best high-growth opportunities.
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Franchises Taking the Lead Discover four of the fastest-growing franchise sectors on the market today and what it takes to make them a success.
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Where Credit is Due Experts explain the rewards and risks - of using credit cards in business.
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Franchise [MARKET MAGAZINE ]
34 DoTimetheWarp ‘Time management’ means managing the events of your life.
6 From the Publisher The trap of a low bar.
14 Crisis Management What to expect from a Franchisor in times of crisis.
46 SBDC Network Over 1,000 local SBDC offices extend entrepreneurial education to meet small business needs.
47 The SBA Can Help You Start From sound advice to small business loans, the SBA can play a critical role in your start-up.
54 Closing Quotes Quotes from those who have been there, done that.
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: 38 A2008 Look Ahead It’s the question everybody in business is asking: What’s the new year going to be like for small business?
FROM THE PUBLISHER
Franchise [MARKET MAGAZINE ]
The Trap of a Low Bar W
ith the start of every year comes a time of reflection. Millions of people start each year determined to have a better year than the previous one. How many times have you made a resolution, follow it for a couple of weeks and then slowly slide back into those old habits you swore you were going to break? I’ve done it, and I know you have too. We’re creatures of habit. We all want to exercise more, eat healthier, stop smoking, spend more time with the family, etc., etc. But when push comes to shove, most of us fail to truly better ourselves. If you’re skeptical, I suggest you visit your local gym in January. The place will be packed with people with every intention to get into the best shape of their lives. Give it a couple of months. By March half of those people will have found enough excuses as to why they couldn’t make it to the gym anymore. The difference between the winners and the losers comes down to planning. Not to sound cliché, but if you fail to plan then you are planning to fail. People who want to be more successful, in any aspect of life, will look do the following: 1. 2. 3. 4. 5.
Evaluate what they’ve done in the past. Determine what was successful and what wasn’t. Key in on what was successful and continue to improve in that area. Lose what wasn’t and develop new strategies to be successful Repeat.
Step number 5 is crucial to long-term success. If you are constantly striving to improve, complacency can’t sit in. Anyone can make great gains temporarily, but the real winners in this world are never fully satisfied. There’s always a new challenge, a new bar to clear. Many times, we spend our whole lives patting ourselves on the back for clearing bars that were too low in the first place.
Editor Art Director Assistant Art Director Production Manager Contributing Writers
Robert Pitts Mary Nason Ron Palfrey Diane Traylor Carolyn Heinze Jack Canfield Michael Seid Kay Marie Ainsley ______________________________________ Publisher Research Manager Advertising Director East Coast Ad Manager Midwest Ad Manager West Coast Ad Manager
Matt Russell mrussell@reni.net Cheryl Watwood Matt Russell mrussell@reni.net Nicky Harvey Martha Theriault John Beward
Florida Sales Office: 150 3rd Street SW, Winter Haven FL 33880 Telephone: 863-294-2812 For Advertising Information: The Victoria Group Victoria Conte, President 401-421-7239 13victoria@cox.net ___________________________________________ Webmaster Jay Hook Advertising Director Matt Russell mrussell@reni.net Internet Sales
Deanna Pearce dpearce@franmarket.com
___________________________________________
So don’t fall into the trap of the low bar this year. Challenge yourself to make this the best year of your life. Attack the new year and find a way to maintain your intensity throughout. A good way to do that is to set goals for each quarter and see how you measure up. If you are not where you want to be at the end of the first quarter, kick yourself in the pants and do whatever it takes to make your goal for the second. Do this, and I guarantee that at the end of the year, you’ll look back and determine that 2008 was a success. Just remember, when 2009 rolls around, you have to do it all over again. Now if you’ll excuse me, it’s time for me to break in my brand new AB Blaster 5000. Six-pack here I come! All the Best,
Franchise Magazine is published quarterly by RENI Publishing, Inc. 150 3rd Street SW, • Winter Haven FL 33880 Telephone: 863-294-2812 Fax: 863-299-3909
President & CEO Group Publisher Operations IT Services
Joe Jensen Jim Phillips Denise Harwell Jay Hook
_________________________________________________
Matt Russell Publisher
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Information in this magazine is subject to change without notice. While every reasonable effort has been made to ensure that the information was accurate as of publication date, RENI and its employees, agents, clients and distributors shall not be liable for any damages arising from the use of or reliance on the information contained in this publication or from omissions to this publication. _________________________________________________
for starters
{ } CREDIT CARDS IN FRANCHISES & SMALL BUSINESS BY HORTENSE LEON AND MATT TOWNSEND
It’s probably been a long time since you’ve left your home mailbox without a handful - or maybe an armful - of credit card offers. With promises of low interest rates, special incentives and introductory offers, credit cards have become an integral part of personal finance for many Americans. And if you’re about to enter the franchise market or start up your own small business, you’ll soon have to decide what role plastic will play. Should your business buy now and pay later?
“If done judiciously and properly, there’s absolutely no reason not to do it,” said Howard Bassuk, counselor with SCORE and founder of Frannet. “It’s like any financial instrument or financial tool. It’s how you use it that determines... whether you should use it.” Indeed, credit cards are easy to obtain and easy to use, and most small businesses do use them, said Giovanni Coratolo, director of small business policy for the U.S. Chamber of Commerce in Washington, D.C. But ideally, a business person taking
on debt should match the length of time the product will be used to the method of finance, he said. “You don’t use a credit card to finance a truck or buy a piece of equipment with a longer [lifespan],” the director said. “Credit cards are for short-term purchases for things you consume within a year. “Gasoline is a perfect purchase for which to use credit cards,” said Coratolo. “When you start using one, you develop a cash flow, because there is a float between the time you use the card and when you pay it off.” www.franmarket.com
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Bassuk said a small business may prefer credit over cash if it needs this “float” between delivery and payment. “If you find you’re paying for inventory as it’s delivered and want to have some way of equalizing that timeline, if you use a credit card to pay for that product, you may not have to pay for it for 30 to 45 days,” he said. There are proper uses for a credit card in small business, but it’s important to guard against using the card to make up for insufficient operating capital, the Florida-based counselor said. “The red flag would be if somebody’s financing their business by trying to substitute a bank with a credit card,” he said. “Where it approaches the line is to avoid writing a check. It’s not a substitute for cash flow.”
The right card If a franchisee or small business owner has responsibly developed a sound fiscal plan involving credit cards Devron Veasley or credit lines, there are many options to consider in the search for the right card. Devron Veasley, director of the Bessemer Incubation System in Bessemer, Ala., said finding a low interest rate should be the chief concern of new business owners. When shopping for a credit card, said Veasley, small businesses should not only look for low interest rates they should try to negotiate the interest rate down. “You’d be amazed at what credit card companies will do when they are trying to make a sale,” he said. “When you establish
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an account at a bank, ask your banker to steer you to a lower rate credit card or you can consult Consumer Reports, which evaluates them periodically.” SCORE’s Bassuk agreed that interest rates and fees are important. But to some companies, perks like frequent flyer miles may be equally important, he added. “I would also look at grace periods and minimum balances,” he said. “I wouldn’t use a credit card that didn’t have a reasonable grace period.” If the grace period is too short, he said, business owners may end up with past due fees because of the time needed to reconcile charges. In addition, while some franchisees may want to avoid annual fees, others might disagree, Bassuk explained. “There may be a reason to pay for the fee if the feature is warranted. Higher AMEX cards have interesting features, like reconciliation,” he said. “It may warrant the small charge.” Mike Reyes, senior certified business adviser at the University of Texas at San Antonio Small Business Development Center (SBDC), said to watch out for cards with teaser rates. “That might be a very low rate for six months, and then the rate goes up. And what happens there is that if some of those cards may have a clause that will trigger the rate going from the low rate to the high rate if they’re late on a payment,” he said. “In a business, sometimes you can’t help it and might be late on a payment.” Reading the fine print is important, especially in terms of extra or hidden
fees, Reyes warned. “Credit cards will sometimes charge an extra cash advance fee. And if you need money off the credit card for the business, you might, without thinking, get a cash advance.” Just as there are hidden fees, though, there can be hidden advantages. “For example, there are some credit cards that have automatic insurance, particularly the premium cards,” he said. “Sometimes they’ll have benefits that you may not take advantage of, and they’re there.” Veasley said one of these key advantages are streamlined statements, which can be useful at tax time. “Small businesses generally don’t keep good financial records [on their own],” he said. His company, which has ties to local banks, helps small businesses establish lines of credit through these lenders. Some businesses may have to rely on credit cards to find help elsewhere, regardless of benefits or risks, he said. A credit card is a useful tool in the early days of a business, because a bank “won’t generally look at you for the first 18 months you are in business.” If you do need a card to establish credit elsewhere, the kind of card and what to use it for depends totally on the business, Bassuk said. “If you’re in business even for a short time these days, you get solicitations for credit cards, sometimes with pretty healthy credit lines attached. “In a small startup, it may be a lot of money. And depending on
who you are, tapping into that line may be fundamentally sound or totally insane.”
But for financing? So, a business owner can find the right card with the right features, but financing major business costs with that card would still raise a “red flag,” as Bassuk pointed out. Rick Anderson, general manager of Franchise Finance in Little Rock, strongly warned against financing a business with a credit card. “When you do that, that credit card was never intended to use for a business. It’s used for short term money,” he said. Like Bassuk, Anderson, whose business provides small business loans, said credit lines can be used for float, travel and restaurant expenses, but pitfalls abound if credit is used in place of a business loan. “Most of the credit cards we see are high interest, and if you miss a payment, it mushrooms,” he said. But, he said, businesses don’t always have straight-line income, which means a borrower can’t count on making that payment. Interest rates revolve upward, and the owner can get in a cycle of borrowing money. “If you don’t pay down that principal immediately, you’ll never pay the sucker off,” he explained. “It can hurt your credit so bad, that when you want to go to a bank or an institution like us, we run your credit score to see if we can do anything. It just kills you.” Nonetheless, many franchisees and small business owners get caught in
this trap, Anderson added. “They do it all the time. A lot of times they do it because they have no other sources. It’s high risk. It’s trying to get into business for the wrong reasons.” Franchisees needing financing should stick to business loans so they can plan their interest rates and pick the right term length, he said. “That’s a whole lot less payment than putting it on a revolving credit card.”
Anderson also warned that personal credit card debt could make financing harder. “When applications come - and we see hundreds per year - we see $30,000, sometimes $70,000 of credit card debt,” he said. “That really hurts them in getting approved for an SBA-type loan.” Veasley agreed and pointed out
that business owners in a start up might fall under scrutiny for their personal credit history. He suggested turning down unsolicited credit offers, which can negatively affect a personal credit score. “A credit score of 700 is almost required to get better interest rates,” he said. Therefore, sole proprietorships need to check personal credit scores every year, Veasley added.
“And of course, if you have an employee that is leaving the company for whatever reason, you need to be sure that they surrender the company credit card, but a lot of people don’t think of that.”
WORDS OF CAUTION
Veasley said a small business only needs one card and that he placed a $350 spending limit for his office manager, so larger purchases have to be discussed and approved.
Even worse, said the SBDC’s Reyes, is when some small business owners are tempted to generate working capital with personal credit cards. “That’s not a good idea, primarily because typically the interest rates will be higher,” he said. “If they are forced to do that, then the next suggestion would be to keep receipts of the business expenditures.
Why should owners safeguard credit cards like they would cash? “It is money,” Reyes said. “Some people get lackadaisical about that.”
Dave Ramsey - anti-debt guru, host of his nationwide radio show and a spot on the Fox Business Network, and founder of Financial Peace University - said new business owners should stay away from credit cards whenever possible.
“At some point and time, they probably will want to roll that credit card balance into an actual business loan. And the bank is going to want to see evidence that those charges were for business transactions.”
Money, not magic Reyes also suggested that business owners keep a tight watch over their cards. “For safety purposes, if you have employees that are going to use your business/company credit cards, instill in them to be careful with the card, to safeguard it. Also, entrust them only to trusted employees,” he said. “Keep them in a locked safe if it’s not on your person, so that if anybody breaks into the business, they’ll open up a drawer.
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“Ultimately, I think so much of this stuff gets down to common sense,” Bassuk said. “Ultimately, what you’re talking about after the check is decorated, it’s still a check. And the same thing is true with a credit card.” What matters more, he said, is the responsible use of the card and the flexibility that is woven into the business. “Plan for surprises. If you’re so tight that you probably can’t handle a surprise, you’re gonna get hurt,” he said. “What if you hit a hiccup you didn’t expect, and you don’t have any ability to react to it? I think that’s a very tough way to get into business and stay there.” In the end, it’s really about responsibility and common sense. “If you are good at managing your own money, you can do the same in your business,” Veasley said.
Dave Ramsey
“I never recommend credit cards,” he said. “The best way to start and operate a business is with cash. Leveraging your business is asking for trouble. If a big customer doesn’t pay on time, you lose a needed contract, or your industry slumps, you are in big trouble if you aren’t liquid.” One of the greatest factors in business failure is credit and debt load, said Ramsey, who was himself forced into bankruptcy by a huge debt load 20 years ago. He has since rebuilt his business on a cash basis and become a multimillionaire. But even for smaller and short-term use, there are dangers. “The borrower is always slave to the lender, even in business. Borrowed money drastically increases risk in business, it magnifies mistakes, and hurts or even destroys cash flow,” he said. “A debit card will do everything a credit card will do - except create 18% debt.”
Crisis Management By Michael H. Seid, founder and managing director, Michael H. Seid & Associates - MSA
Agway, headquartered in Syracuse, NY, is the largest agricultural cooperative in the Northeastern United States with over 300 franchised and company owned retailers of garden, pet and farm supplies. They also sell California grown frozen strawberries – or so they thought. On April 3rd, to their surprise, Agway discovered that the California grown frozen strawberries they had purchased were part of a shipment from Andrew & Williamson. Andrew & Williamson were under investigation for their connection to foreign strawberries mislabeled as being grown in California and suspected of causing hepatitis A in Michigan. Agway had not received any notice of a recall from the government or their suppliers, nor did they receive any complaints from their retail customers. Agway though had a crisis management plan to execute. They notified their internal organization and immediately notified the press of a
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voluntary recall. They sent 200,000 postcards directly to their customers notifying them of the problem, identified the lot numbers recalled. Agway even extended the recall to all frozen strawberries customers had purchased since July 1996 and provided their customers with a telephone number and contact information. “We took this voluntary action in the interest of our customers’ well being and to preserve the trust they have placed in Agway” said Don Schalk, vice president of Agway Retail Services. On April 11th, they sent out an update and a reminder. The crisis not only passed, but by executing their plan, it was hardly noticed. Compare Agway’s rapid reaction to that of Jack in the Box (e-coli bacteria) or Denny’s, Shoney’s or Avis’ (race relations). Acting like a deer caught in a car’s headlights in the early hours of a crisis does nothing to alleviate or minimize the damages or the cost of solving the problem. According to the Institute for Crisis Management 65 percent of the crises companies face are of the “smoldering” variety. In other words most are problems companies are aware of that could erupt and therefore are caused by management. Only 35 percent are of the “sudden” variety – the kind we hear most about and can learn from because they are dealt with in full view of the public. Just as a franchisor has to manage the franchise system by planning and providing direction to the company owned and franchised locations, they must plan for and manage the system through the unexpected crisis. Most professionals agree that the existence of a working crisis plan and its successful implementation must be viewed as important to the survival of the franchise system. According to Mike Swenson, President of Barkley & Evergreen Public Relations in Kansas City, “You have to be prepared”. “Failure is
not an option in any crisis situation”. Swenson recommends a few simple rules to deal with the media taken from Barkley and Evergreen’s Crisis Management service called CrisisTRAK. • Have updated company information readily available including, number of franchisees, number of company owned locations, profiles of company executives and key franchisees,
and information concerning the systems products and services. • Keep the telephone numbers of key influentials readily available including those of management, your crisis management advisors, key vendors, franchisees, the press and anyone else you might possibly need in a crisis. • Practice your crisis communication plan and schedule annual training exercises.
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• Speak with a single voice. Use only one spokesman. Make certain that the franchisees receive training in crisis management and that they understand how to execute the company’s plan, including calling the correct contact person at franchisor headquarters and their responses, If any, to the press. • Be open, honest and factual with the media. • Let the media know when you will be communicating with them. • Keep your message simple. Make certain that everyone can clearly understand and follow the situation. • Use a steady hand – never panic. The cornerstone of any good crisis management program is the ability to execute your plan. “In most crisis situations, the timing is unpredictable.
Certainly in the fast food business, it is crucial that we have an effective and efficient crisis communication program in place and ready to execute”, said Nancy Robertson, Director of Corporate Communications at Sonic Industries. “To proactively address crisis communications, our Crisis Management Team methodically went through foreseeable crisis scenarios and developed a performance matrix which, at any given time, will give us a plan to carry out so that we’re not developing a plan as a crisis occurs,” said Robertson. Sheila Dressman, Marketing Operations Manager with Cellular One ”believes its just good common sense to do crisis training”. “When challenging situations occur, you have enough going on around you, so it’s that much more important to have some of the “basics in place,” said Dressman.
According to Mike Swenson, a critical component of Barkley & Evergreen’s CrisisTRAK service is the 24-hour, seven days a week 800 number that its clients call to begin to execute their crisis management plan. “CrisisTRAK enables our clients to focus on critical immediacies of their crisis management program while relying on the CrisisTRAK team to begin the process of notification, management and execution,” said Swenson. Speed, honesty and a plan you can execute are all central to an effective crisis management program. Singular in importance in valuing a company’s trademark is its reputation. And, unfortunately, the damage from a poorly handled crisis can cause long lasting and often permanent damage to a company’s reputation and its marks.
Michael H. Seid and Kay Marie Ainsley are Managing Directors of Micheal H. Seid & Associates, LLC.
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feature story
The Fab Four Discover four of the fastest-growing franchise opportunities on the market today and what it takes to make them a success. By Jennifer LeClaire
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T
here’s no such thing as a risk-free business, but many consider franchising’s fastest-growing sectors a safe bet. Opportunity and diversity abound. More than 300 small business concepts adopted the business-format model of franchising in 2006, according to the International Franchise Association (IFA), and 900 new franchise concepts were launched in the three-year period from 2003 through 2005. Although restaurants are still the perennial race horse on the franchising track, a rising health consciousness is leading to growth in concepts like fitness and health care. At the same time, hectic American lifestyles are breeding growth in sectors like cleaning, tax preparation and various pet care services. Specifically, health and fitness concepts posted a 156% increase in the number of establishments between 2000 and 2006. Commercial and residential cleaning concepts remain the service categories’ largest segment. And child-related categories are also gaining large numbers of new concepts, according to the IFA. These categories, experts say, are hints of what the future of franchising holds. Savvy entrepreneurs are exploring the possibilities with both traditionally strong franchising sectors and more recent additions to the franchising world. So without further ado, let’s explore four of the fastest growing franchise sectors.
as niche concepts like Lady of America, Pilate Joe and The Zoo Health Club. Peter Taunton is CEO of the Chanhassen, Minn.-based Snap Fitness, ranked No. 1 on Franchise Market Magazine’s Top 100 New Franchises. He says Snap Fitness has sold 1,100 locations nationwide and is opening 30 to 35 stores a month. “Our biggest challenge to continued growth is finding the right real estate,” Taunton says. “We are always looking for new relationships in real estate development. We are open to forming strategic alliances with other national brands across the country so we can lease an entire shopping center together as brands that don’t compete.” Speaking of competition, Taunton expects more of it in this fast-growth sector. But the demand is there. The trend toward express fitness centers is gaining steam, he says, because of convenient locations, lower prices and no contracts. Taunton said 90%
Happy, Healthy and Fit
Happy, Healthy and Fit
H
ealth and fitness is a $14.1 billion industry, serving nearly 40 million members in the United States, according to the International Health, Racquet and Sportsclub Association. And health club memberships are projected to reach 50 million by 2010. That’s a 25% growth rate.
a matchmaker between franchisees and franchisors. “But more than that, several concepts have developed ways to consolidate their build-out and services, making the price tag for ownership more palatable and ongoing overhead a healthy option to consider.”
“Fitness is hot because of the vanity of Americans,” says Tom Scarda, a consultant and coach with FranChoice, a company that serves as
There is no lack of health and fitness franchises to choose from. There’s better known brands like World Gym, Snap Fitness and Gold’s Gym, as well
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of Snap Fitness’ members live within two miles of the franchise clubs. But again, growth becomes a real estate challenge. Despite the constraints, this is one fast-growing sector that experts expect to keep up the pace.
Squeaky Clean Opportunities The U.S. commercial cleaning industry generates about $30 billion a year, according to First Research, while the home cleaning industry generates another $20 billion. Within the next few years, the U.S. Department of Commerce expects 80% of two-income households to use an outside housecleaning service. Growth is healthy in both sectors, but experts say the opportunities may be more robust on the residential
side in the future. “Home cleaning services are growing because Americans are outsourcing their lives,” Scarda explains. “The clientele is easy to define. It’s the suburban family, usually two working spouses that already have a lawn service and a large dry-cleaning bill.” The way Jani-King President Jerry Crawford sees it, the commercial cleaning franchise sector is simply keeping pace with demand. Whether it’s a new hospital, school or typical office building that is built to manage increased population, companies like Addison, Texas-based Jani-King provide a must-have service. “We have also grown by delivering unmatched support to our franchisees. As we help franchisees reach their goals, they become more likely to recommend our program to others that are interested in owning a franchise,” Crawford says. “That’s why we are able to grow at such a rapid pace.” The growth of the commercial cleaning franchise sector spells benefits for Jani-King, Crawford says. Thanks to the company’s infrastructure, Jani-King can maintain pace with new construction and provide services to commercial buildings in nearly any market. Even though Jani-King has more than 120 regional support offices in 18 countries, Crawford truly feels the company is still scratching the surface of its potential. “The commercial cleaning industry shows absolutely no signs of slowing down, and neither does franchising,”
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Crawford says. “The International Franchise Association released a report that one in seven jobs in the United States is a direct result of franchising. These are industries that will see strong, continued growth.”
Cashing in on Death & Taxes The accounting and tax preparation industry has swelled to $65 billion a year in the United States. With the IRS predicting about 1.5 million new tax filers for each of the next several years, this sector promises to stay white hot. “Tax prep is sizzling as a business prospect because it’s recession proof. As the old adage goes, ‘only two things in life are certain, death and taxes’,” Scarda laughs. “Moreover,
“There is a great opportunity ahead of us, and we want to take advantage of that opportunity by providing our franchisees with the tools and the training so that they can strive to successfully operate multi-unit businesses that generate growing cash flows,” Heimbouch says.
Quick-service restaurants are expected to register sales of approximately $150 billion in 2007 a tax business is seasonal, which makes it safe. Many owners in this franchise industry keep their jobs while testing the waters of entrepreneurship.” By Jackson Hewitt’s estimates, the tax preparation market is growing by about 1% a year. The paid preparer market has increased its share of the market from 50% of filers in 1997 to an estimated 62% of filers this year. That adds up to opportunity, according to Mark Heimbouch, senior executive vice president and COO for Parsippany, N.J.-based Jackson Hewitt, the leading tax preparation franchise with more than 6,500 offices.
Jackson-Hewitt manages the process closely so that its franchisees don’t overextend themselves by expanding too quickly. The franchisor complements the growth of its existing franchisees, Heimbouch says, by focusing on growth in areas where there are no other Jackson-Hewitt stores. “In a market with tens of thousands of competitors nationwide and frequently 30 to 35 competitors within a given territory, the paid tax preparation market has always been competitive and likely will always be competitive,” Heimbouch says.
Quick Serve Continues its Fast growth A mericans are now spending half of their food budget in restaurants, according to the National Restaurant Association. Quick-service restaurants are expected to register sales of approximately $150 billion in 2007, a 5% gain over 2006. “Quick-service restaurants also play to the busy American lifestyle. In addition, with the reposition toward health conscious thinking for meal choices, many QSRs are steeping up to the plate and offering salads, grilled items and low trans-fat
dishes on their menus,” Scarda notes. “This is appealing for a potential buyer who is aware of this substantial shift toward healthy eating.” Like many franchisors, Milford, Conn.based Subway is leveraging the healthy side of quick service. Subway spokesperson Les Winograd says the restaurant has added about 2,000 locations per year for the past several years. It has been named the No. 1 franchise by Entrepreneur magazine year after year and is the largest quick-service restaurant franchise in the industry. The biggest challenge for quick-service restaurants, including Subway, is finding strategic locations to continue the fast-paced growth. Subway has taken an innovative approach to solving that challenge. “We have restaurants in a Jewish community center, laundry mats, car dealerships, factories,” Winograd says. “We get pretty creative - and it’s all franchisee-initiated. If they feel they can make the business plan work, we’ll share the best practices and try to help them succeed.”
Sectors to Watch With
the franchising industry growing like gangbusters, forwardthinking franchisors are expanding beyond the usual suspects (read: restaurants, taxes and maid services) to lucrative niche markets. Indeed, pet services, home health care services and child development are three sectors to watch. www.franmarket.com
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“As Americans are farming out their lives, potential franchise buyers are wise to consider mobile business that go to the consumer’s home and businesses as a possible business venture,” says FranChoice’s Scarda. “Even at $3 for a gallon of gas, it beats $30 to $40 per square foot for rent, in addition to utilities.” Pet service is a prime example. According to the American Pet Products Manufacturers Association, 63% of American households own a pet - 45% own dogs - contributing to an estimated $40.8 billion pet industry in 2007. Matt Boswell got a head start on that opportunity, founding Pet Butler, a professional pet waste clean up removal service headquartered in Frisco, Texas, in 1988. “Professional poop scooping is thriving because of our busier-thanever society, which has grown to understand the value of one’s time. We do the ‘dirty work’ so pet owners
63% of American households own a pet contributing to an estimated $40.8 billion pet industry in 2007
can spend more time with their families and pets,” Boswell explains, noting that the service has won nods from environmentalists. The pet services craze is also a challenge for Pet Butler. The franchise averages about 300 franchise applicants each month, demanding time and energy to investigate potential partners to make sure it’s a good fit. “We are just a few short years away from reaching the tipping point, where Pet Butler is a household name across North America,” Boswell predicted. “We have invested heavily in building a national brand and will continue to market our brand in order to grow the market.” Even though Boswell’s market research shows pets are at least doubling human population growth, home health care services are keeping up with pet services on the revenue grid. The U.S. home healthcare industry is estimated at $40 billion a year, according to Research & Markets. Omaha, Neb.based Home Instead and its founder and CEO Paul Hogan are taking these services around the world, with offices in the U.S., Canada, Japan, Portugal and beyond. “There will be a billion people over 65 by 2030. That’s one in every
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eight people,” marvels Hogan, the International Franchise Association’s 2006 Entrepreneur of the Year Award recipient. Hogan launched the concept in 1994 and started franchising internationally six years ago. “Our company needs more resources to grow. We have to keep investing more to keep up with the demand and it becomes an expensive proposition.” It’s also a competitive proposition. Home Instead isn’t the only home health care service vying for award-winning status, and recruiting qualified home health care workers is a challenge across the board. Hogan knows he may have to turn down some growth opportunities if he can’t recruit the talent. “We won’t take any shortcuts in this business,” he insists. Of course, long before they get to Home Instead, children are visiting franchises in the child development sector, like Abrakadoodle. The child development sector includes pre-preschools, arts academies and other business types that stimulate a child’s development. The sector is growing thanks to child-focused parents who are more involved in their kid’s activities, according to Rosemarie Hartnett, co-founder and COO of Abrakadoodle, a national arts education program franchisor based in Reston, Va. The rapid growth demands a technology-based approach to keeping parents informed: “We made a commitment from the beginning to develop an e-mail marketing system to reach or parents so they can stay informed quickly,” Hartnett says. “Staying on that cutting edge in terms of parent communications will be an ongoing challenge.”
TOP
100 FASTEST GROWING FRANCHISES We live in a fast-paced world filled with fast food, lightning quick Internet, microwaves and Lamborghinis. Almost daily, something new comes out that promises to do something in a shorter amount of time than ever before and we love it. In short, fast is good. Because of this fact, we decided it’s a perfect time to shine a spotlight on a group of extraordinary franchises.
We looked at different sectors within the industry and made a list of we
determined were the Top 100 Fastest Growing Franchises. We took the number of units and growth rate into account, but really keyed in on the growth rate. These franchises are exploding with growth. So if you see a concept that you’re interested in, the time to contact them is now. Don’t let someone else in your area beat you to the punch. Enjoy!
www.franmarket.com
23
TOP100
FASTEST GROWING FRANCHISES
FRANCHISE
INDUSTRY
YEAR STARTED
FRANCHISE FEE
1.
JANI-KING
Commercial Cleaning
1974
$8,600 - $16,300+
2.
SUBWAY
Restaurant
1974
$15,000
3.
COVERALL CLEANING CONCEPTS
Commercial Cleaning
1985
$6,000 - $32,200
4.
CURVES
Women’s Fitness
1995
$39,900
5.
DUNKIN’ BRANDS
Food
1955
$40,000 - $80,000
6.
JACKSON HEWITT
Tax Services
1986
$25,000
7.
PLAY N TRADE
Retail – Video Games
2003
$25,000
8.
7-ELEVEN
Convenience Store
1964
Varies
9.
JAN-PRO
Commercial Cleaning
1991
$950
10. UPS STORE
Postal Service Center
1980
$29,950
11. DOMINO’S PIZZA
Pizza
1967
$25,000
12. CENTURY 21
Real Estate
1972
$25,000
13. CLEANNET USA
Commercial Cleaning
1988
$2,950 - $32,000
14. AUCTION IT TODAY
Online Store
2005
$19,000
15. CHOICE HOTELS
Hotel/Resort
1962
$7,500 - $60,000
16. SUPER SUPPERS
DIY Meal Preparation
2004
$35,000
17. JAZZERCISE
Dance Fitness
1983
$1,000
18. INSTANT TAX SERVICE
Tax Services
2004
$30,000
19. SNAP FITNESS
Fitness
2004
$15,000
20. ANYTIME FITNESS
Fitness
2002
$14,999
Jani-King is the world’s largest commercial cleaning franchise company with more than 12,500 franchise owners in 20 countries. Through a network of more than 120 regional offices, Jani-King contracts commercial cleaning services with the work performed by franchisees who are supported by administrative, account sales and operations personnel from a local regional office. For more information, call 1.800.JANIKING, or visit www.janiking.com.
The native people of Kona Hawaii remember the days of the “Bad Ass Ones.” The bellows of the donkeys could be heard echoing through the mountains as they hauled the heavy loads of coffee up and down the mountain side. In honor of these hard working donkeys, we named our coffee company. The legend of the Kona Nightingale lives on right here at The Bad Ass Coffee Company. For franchise information visit www.badasscoffee.com or call Harold Hill: (888) 422-3277
INVESTMENT RANGE
STREET ADDRESS
CITY, STATE
PHONE
WEBSITE
$11,300 - $34,100+
16885 Dallas Pkwy
Addison, TX
888-526-4546
janiking.com
$76,100 - $227,800
325 Bic Dr.
Milford, CT
800-888-4848
subway.com
$6,300 - $35,900
5201 Congress Ave., Suite 275
Boca Raton, FL
561-922-2500
coverall.com
$65,000 -$65,000
100 Ritchie Rd.
Waco, TX
800-848-1096
Varies
130 Royall St.
Canton, MA
781-737-3000
dunkindonuts.com
$75,000 - $94,014
3 Sylvan Way, 3rd Floor
Parsippany, NJ
800-475-2904
jacksonhewitt.com
$135,000 – $377,700
3400 Irvine Ave., Suite 118
Newport Beach, CA
949-274-8619
playntrade.com
Varies
1722 Routh St., Suite 1000
Dallas, TX
800-255-0711
7-eleven.com
$5,000 - $200,000
11605 Haynes Bridge Rd.
Alpharetta, GA
678-336-1780
jan-pro.com
$171,000 - $279,400
6060 Cornerstone Ct. W.
San Diego, CA
877-623-7253
theupsstore.com
$118,500 - $460,300
30 Frank Lloyd Wright Dr.
Ann Arbor, MI
734-930-3030
dominos.com
$11,800 - $522,800
1 Campus Dr.
Parsippany, NJ
877-221-2765
century21.com
$3,900 - $35,600
9861 Broken Land Pkwy., Suite 208
Columbia, MD
800-735-8838
cleannetusa.com
$19,000 - $90,000
301 Appian Way Dr.
Brighton, MI
517-552-8778
auctionittoday.com
$2.3M - $12.6M
10750 Columbia Pike
Silver Spring, MD
866-560-9871
choicehotels.com
$178,850 - $266,650
6100 Camp Bowie Blvd.
Fort Worth, TX
817-732-6100
supersuppers.com
$2,980 - $33,130
2460 Impala Dr.
Carlsbad, CA
760-602-7119
jazzercise.com
$41,800 - $84,400
1 South Main St., Suite 1430
Dayton, OH
888-870-1040
itsfinancial.com
$150,000-$165,000
2025 Coulter Blvd., Suite 200
Chanhassen, MN
952-474-5422
snapfitness.com
$38,000 - $286,000
12181 Margo Ave. S.
Hastings, MN
800-704-5004
anytimefitness.com
Instant Tax Service is an income tax preparation firm specializing in individual income tax preparation, electronic filing and refund anticipation loans. We now have over 1500 locations in 26 states. We provide comprehensive training and superior franchise support. No tax experience is required. Come grow with us!
x 2221
curves.com
Jackson Hewitt Tax ServiceÂŽ has been ranked the #1 tax preparation franchise for 14 consecutive years by Entrepreneur magazine. The company is now the #3 franchise overall on the prestigious 28th Annual Franchise 500 list. Jackson Hewitt franchisees receive ongoing training, operational support, proprietary tax software, technology services, national and regional advertising, and marketing assistance. Contact us today to discuss franchise opportunities.
Call 1-800-475-2904 or visit www.jacksonhewitt.com
TOP100
FASTEST GROWING FRANCHISES
FRANCHISE
INDUSTRY
YEAR STARTED
FRANCHISE FEE
21. EDIBLE ARRANGEMENTS
Food/Gifts
2001
$25,000
22. PET BUTLER
Pet Services
2005
$22,900
23. GREAT CLIPS
Hair Salon
1983
$25,000
24. SYSTEM4
Commercial Cleaning
2004
$4,400
25. LIBERTY TAX SERVICE
Tax Services
1997
$34,000
26. PAPA JOHN’S
Pizza
1986
$25,000
27. BONUS BUILDING CARE
Commercial Cleaning
1996
$6,500
28. JIFFY LUBE
Automobile Services
1979
$35,000
29. MASSAGE ENVY
Massage Services
2002
$39,000
30. MERLE NORMAN
Cosmetic Studios
1989
$0
31. COLD STONE CREAMERY
Ice Cream
1994
$42,000
32. CARTRIDGE WORLD
Cartridge Replacement/Sales
1997
$30,000
33. MATCO TOOLS
Tool/Equipment Distributor
1993
$0
34. HAMPTON INN
Hotels/Resorts
1984
$50,000+
35. SERVPRO
Cleaning Services
1969
$38,000
36. HEAVEN’S BEST CARPET & UPHOLSTERY
Carpet/Upholstery Cleaning
1983
$24,900
37. BROOKE FRANCHISE
Insurance/Investment Services
1988
$165,000
38. BUDGET BLINDS
Window Covering
1994
$24,900
39. VANGUARD CLEANING SYSTEMS
Commercial Cleaning
1984
$7,000
40. GOIN’ POSTAL
Retail Shipping/Business Services
2002
$15,000
INVESTMENT RANGE
STREET ADDRESS
CITY, STATE
PHONE
WEBSITE
$145,950 – $300,200
95 Barnes Rd.
Wallingford, CT
203-774-8070
ediblearrangements.com
$39,450 - $64,850
5300 Town & Country Blvd., Suite 440 Frisco, TX
800-PET-BUTLER
petbutler.com
$106,900 – $197,700
7700 France Ave. S., Suite 425
Minneapolis , MN
800-999-5959
greatclipsfranchise.com
$1,400 - $75,000
4700 Rockside Rd., Suite 610
Independence, OH
216-524-6100
system4usa.com
$33,800 - $63,900
1716 Corporate Landing Pkwy.
Virginia Beach, VA
877-285-4237
libertytaxfranchise.com
$250,000 - $250,000
P.O. Box 99900
Louisville, KY
502-261-7272
papajohns.com
$7,750 - $13,449
P.O. Box 300
Indianola, OK
918-823-4990
bonusbuildingcare.com
$214,000 - $273,000
P.O. Box 4427
Houston, TX
800-327-9532
jiffylube.com
$250,000 - $350,000
14350 E. 87th St., Suite 200
Scottsdale, AZ
602-889-1090
massageenvy.com
$29,000 - $162,000
9130 Bellance Ave.
Los Angeles, CA
800-421-6648
merlenorman.com
$292,400 - $438,980
9311 E. Via De Ventura
Scottsdale, AZ
480-362-4800
coldstonecreamery.com
$125,000 - $190,000
6460 Hollis St.
Emeryville, CA
510-594-9900
cartridgeworldusa.com
$79,000 - $182,000
4403 Allen Rd.
Stow, OH
800-368-6651
matcotools.com
$3.6M - $10.8M
9336 Civic Center Dr.
Beverly Hills, CA
800-286-0645
hamptonfranchise.com
$97,300 - $154,700
801 Industrial Blvd.
Gallatin, TN
800-826-9586
servpro.com
$14,900 - $65,900
247 N. 1st E.
Rexburg, ID
800-359-2095
heavensbest.com
$170,700 - $385,000
10950 Grandview Dr., Bldg. 34, 5th Fl. Overland Park, KS
800-642-1872
brookeagent.com
$79,700 - $153,100
1927 N. Glassell St.
Orange, CA
800-420-5374
budgetblinds.com
$2,300 - $33,000
655 Mariners Island Blvd., Suite 303
San Mateo, CA
650-594-1500
vanguardcleaning.com
$40,000-$117,000
4941 4th St.
Zephyrhills, FL
813-782-1500
goinpostal.com
The Commercial Cleaning Industry is one business segment in America today that cannot be replaced by technology or sourced out of the country. System4 GUARANTEES customers, training and equipment. Grow at your own pace with this
216-524-6100 www.system4usa.com
HOME based business. As little as $1400 can get you started!
TOP100
FASTEST GROWING FRANCHISES
FRANCHISE
INDUSTRY
YEAR STARTED
FRANCHISE FEE
41. N-HANCE
Wood Renewal System
2003
$16,000
42. HIGH TOUCH HIGH TECH
Educational Consulting Service
1993
$35,000
43. COFFEE NEWS
Newspaper
1996
$7,500
44. HOT STUFF FOODS
QSR
1993
$1,990
45. ALL ABOUT HONEYMOONS
Travel
2003
$9,000
46. MAIDS HOME SERVICE
Residential Cleaning
1981
$10,000
47. WIRELESS TOYZ
Cell Phone/Satellite Services
2001
$30,000
48. WEICHERT REAL ESTATE AFFILIATES
Real Estate
2001
$25,000
49. HOME HELPERS
In-Home Companion Care
1997
$28,900
50. WSI INTERNET
Internet Consulting
1995
$49,700
51. MOE’S SOUTHWEST GRILL
QSR
2001
$25,000
52. 800-GOT-JUNK
Trash Removal Service
1998
$32,000 - $64,000
53. ANAGO CLEANING SYSTEMS
Commercial Cleaning
1991
$2,000 - $350,000
54. KELLER WILLIAMS
Real Estate
1987
$25,000
55. WORLD PROPERTIES
Real Estate
2005
$599 - $50,000
56. AVALAR
Real Estate
1999
$15,000
57. RESULTS TRAVEL
Travel
2000
$1,500
58. ASSIST-2-SELL
Real Estate
1996
$25,000
59. MRI NETWORK
Recruiting
1965
$84,900
60. JIMMY JOHN’S GOURMET SANDWICH SHOPS
Gourmet Sandwich Shop
1993
$35,000
Low Investment - High Margins Service Business Opportunity: Our franchisees come from all walks of life. CruiseOne continuously adds new marketing venues and technology, while our members maintain the personalized service coveted by our clients. Whether planning individual travel, group bookings or corporate meetings at sea our franchise owners continue to set the pace and raise the bar by delivering our hallmark “high tech, high touch” service.
Low Start-Up Costs Recession-Proof B2B Industry Unrestricted Market
1-800-775-PURO (7876) MyFuture@PuroClean.com
See the movie at www.cruiseonemovie.com www.PuroCleanOpportunity.com
One of the fastest growing franchise networks
INVESTMENT RANGE
STREET ADDRESS
CITY, STATE
PHONE
WEBSITE
$31,525 - $94,700
1530 N. 1000 W.
Logan, UT
435-890-1010
nhance.com
$42,000 - $46,000
P.O. Box 8495
Asheville, NC
800-444-4968
sciencemadefun.net
$8,500 -$8,500
100 Devon St.
Portland, ME
207-879-0038
coffeenewsusa.com
$15,000 - $175,000
2930 W. Maple
Sioux Falls, SD
605-336-6961
hotstufffoods.com
$12,000 - $12,000
7887 E. Belleview Ave., Suite 1225
Englewood, CO
800-813-9557
aahfranchise.com
$102,000 - $151,000
4820 Dodge St.
Omaha, NE
800-843-6243
maids.com
$226,100 - $666,800
28470 W. 13 Mile Rd., Suite 300
Farmington Hills, MI
866-237-2624
wirelesstoyz.com
$45,000 - $269,000
225 Littleton Rd.
Morris Plains, NJ
877-533-9007
weichertfranchise
$41,700 - $73,300
10700 Montgomery Rd., Suite 300
Cincinnati, OH
888-876-3144
homehelpers.cc
$58,350 - $163,150
5580 Explorer Dr., Suite 600
Missauga, ON
888-678-7588
wsicorporate.com
$256,000 - $651,000
200 Glenridge Point Pkwy., Suite 200
Atlanta, GA
404-255-3250
moes.com
$90,000 - $150,000
8th Fl., 1055 W. Hastings St.
Vancouver, BC
866-483-7042
1800gotjunk.com
$8,000 - $350,000
3111 N. University Dr., Suite 625
Waco, TX
800-213-5857
anagousa.com
$174,600 - $557,500
807 Las Cimas Pkwy., Suite 200
Austin, TX
512-327-3070
kw.com
$1,900 - $65,900
111 Founders Plaza, 19th Fl.
East Hartford, CT
800-809-1963
worldproperties.com
$53,400 - $330,900
6430 Medical Center St., Suite100
Las Vegas, NV
877-895-8988
avalar.biz
$25 - $10,700
701 Carlson Pkwy.
Minneapolis, MN
888-523-2200
resultstravel.com
$50,000 - $101,500
1610 Meadow Wood Lane
Reno, NV
800-528-7816
assist2sell.com
$122,800 - $168,900
1717 Arch St., 36th Fl.
Philadelphia, PA
215-636-1158
mrinetwork.com
$289,900 - $386,500
2212 Fox Dr.
Champaign, IL
800-546-6904
jimmyjohns.com
TOP100
FASTEST GROWING FRANCHISES
FRANCHISE
INDUSTRY
YEAR STARTED
FRANCHISE FEE
61. AAMCO
Transmission Service Center
1963
$31,500
62. HOME INSTEAD SENIOR CARE
Senior Home Care
1995
$27,500
63. PUROSYSTEMS
Property Restoration/Reconstruction
1991
$35,000
64. CRUISE PLANNERS
Travel
1999
$9,995
65. SPORT CLIPS
Barbershop
1995
$49,500
66. EXPRESS PERSONNEL SERVICES
Staffing Service
1985
$30,000
67. CLUB Z IN-HOME TUTORING SERVICES
Educational Services
1998
$24,500
68. THE GROWTH COACH
Small Business Coaching/Mentoring
2003
$28,900
69. MAID BRIDGADE
Residential Cleaning
1980
$9,500
70. QDOBA MEXICAN GRILL
Fast-casual Mexican Food
1997
$30,000
71. GOLD’S GYM
Fitnesss
1980
$17,500 - $25,000
72. TROPICAL SMOOTHIE CAFE
Smoothies/Sandwiches
1997
$20,000
73. BARK BUSTERS HOME DOG TRAINING
Pet Services
1994
$37,500
74. CARVEL
Ice Cream
1947
$30,000
75. HOMES & LAND MAGAZINE
Home and Land Buyers Guide
1973
$27,000
76. BUFFALO WILD WINGS
Wings & Sandwiches
1991
$42,500
77. ROOTER-MAN
Plumbing
1981
$7,950
78. CERTAPRO PAINTERS
Residential and Commercial Painting
1992
$40,000
79. COMFORT KEEPERS
In-home Senior Care
1999
$32,500
80. CANDY BOUQUET
Candy Gifts
1993
$16,000
INVESTMENT RANGE
STREET ADDRESS
CITY, STATE
PHONE
WEBSITE
$196,800 - $252,400
201 Gibraltar Rd.
Horsham, PA
800-523-0402
aamco.com
$42,000 - $52,000
13330 California St., Suite 200
Omaha, NE
888-484-5759
homeinstead.com
$81,500 - $122,400
6001 Hiatus Rd., Suite13
Tamarac, FL
800-247-9047
purosystems.com
$1,895 - $20,000
3300 University Dr., Suite 602
Coral Springs, FL
888-582-2150
beacruiseagent.com
$165,000 - $165,000
P.O. Box 3000-266
Georgetown, TX
512-869-1201
sportclips.com
$130,000 - $170,000
8516 Northwest Expwy.
Oklahoma City, OK
877-652-6400
expresspersonnel.com
$32,000 - $65,450
15310 Amberly Dr., Suite 185
Tampa, FL
888-434-2582
clubztutoring.com
$38,200 - $58,400
10700 Montgomery Rd., Suite 300
Cincinnati, OH
888-292-7992
thegrowthcoach.com
$57,500 - $159,500
4 Concourse Pkwy., Suite 200
Atlanta, GA
800-722-6243
maidbrigade.com
$415,000 - $695,000
4865 Ward Rd., Suite 500
Wheat Ridge, CO
720-898-2300
qdoba.com
$961,500 - $3.6M
125 E. John Carpenter Fwy., Suite 1300 Irving, TX
214-296-5830
goldsgym.com
$235,000 - $325,000
4100 Legendary Dr., Suite 250
Destin, FL
888-292-2522
tropicalsmoothie.com
$71,100 - $96,400
250 W. Lehow Ave., Suite B
Englewood, CO
877-300-2275
barkbusters.com
$46,900 - $388,700
200 Glenridge Point Pkwy., Suite 200
Atlanta, GA
404-255-3250
carvel.com
$50,000 - $50,000
1830 E. Park Ave.
Tallahassee, FL
800-458-9520
homesandland.com
$842,200 - $2.98M
1600 Utica Ave. S., Suite 700
Minneapolis, MN
800-499-9586
buffalowildwings.com
$46,800 - $137,600
268 Rangeway Rd.
N. Billerica, MA
800-700-8062
rooterman.com
$129,000 - $144,000
150 Green Tree Rd., Suite 1003
Oaks, PA
800-564-5175
certapro.com
$56,000 - $88,000
6640 Poe Ave., Suite 200
Dayton, OH
888-801-1121
comfortkeepers.com
$10,000 - $52,400
423 E. Third St.
Little Rock, AR
501-375-9990
candybouquet.com
TOP100
FASTEST GROWING FRANCHISES INDUSTRY
YEAR STARTED
FRANCHISE FEE
81. FOOT SOLUTIONS
Shoes & Inserts
2000
$27,500
82. STROLLERFIT
Fitness
2001
$3,800
83. FIREHOUSE SUBS
Submarine Sandwiches
1995
$20,000
84. RITA’S WATER ICE
Italian Ices, Frozen Custard, Gelatin
1989
$35,000
85. BAD ASS COFFEE CO.
Coffee & Logo Wear
1998
$25,000
86. LENNY’S SUBS
Submarine Sandwiches
2001
$15,000 - $25,000
87. CITY PUBLICATIONS
Publications for Affluent Homeowners
2004
$60,000 - $160,000
88. SUPERCOUPS
Co-op Direct Mail Advertising
1983
$26,000
89. WINESTYLES
Wine Store
2002
$25,000
90. MARS, INT’L.
Auto Reconditioning Services
1998
$15,000
91. EMBROIDME
Embroidery, Screen Printing, Ad Specialties
2001
$42,500
92. CRUISE ONE
Travel
1992
$9,800
93. MR. HANDYMAN
Home Maintenance & Repairs
2000
$14,900
94. LABOR FINDERS
Industrial Staffing Services
1975
$20,000
95. MARBLE SLAB
Ice Cream
1984
$32,000
96. BEEF O’BRADY’S
Wings & Sandwiches
1998
$35,000
97. 1800905GEEK
On-site Computer Services
2001
25,000
98. NOVUS AUTO GLASS
Windshield Repair & Replacement
1985
$7,500
99. PUMP IT UP
Children's Party Facility
2003
$40,000
100. STROLLER STRIDES
Stroller Fitness Program
2005
$3,300 - $6,100
FRANCHISE
166 W. 2700 S.
INVESTMENT RANGE
STREET ADDRESS
CITY, STATE
PHONE
WEBSITE
$200,000 - $225,000
2359 Windy Hill Rd., Suite 400
Marietta, GA
770-955-0099
footsolutions.com
$4,900 - $13,200
4700 Ridge Ave.
Cincinnati, OH
866-222-9348
strollerfit.com
$200,000 - $385,700
3410 Kori Rd.
Jacksonville, FL
904-886-8300
firehousesubs.com
$197,950 - $396,800
1210 Northbrook Dr., Suite 310
Trevose, PA
800-677-7482
ritasice.com
$225,000 - $225,000
166 W. 2700 S.
Salt Lake City, UT
888-422-3277
badasscoffee.com
$180,000 - $328,500
8295 Tournament Dr., Suite 200
Memphis, TN
901-753-4002
lennyssubshop.com
$75,000 - $200,000
600 Galleria Pkwy, Suite E170
Atlanta, GA
770-951-0441
citypublication.com
$46,800 - $84,500
350 Revolutionary Dr.
East Taunton, MA
800-626-2620
supercoups.com
$154,800 - $242,400
5100 W. Copans Rd., Suite 310
Margate, FL
954-984-0070
winestyles.net
$500 - $146,000
P.O. Box 201905
Arlington, TX
800-230-4106
marsrecruits.com
$184,000 - $188,000
2121 Vista Pkwy.
West Palm Beach, FL
800-727-6720
embroidme.com
$4,575 - $26,125
1415 NW 62nd St., Suite 205
Fort Lauderdale, FL
800-892-3928
cruiseonemovie.com
$54,400 - $54,000
3948 Ranchero Dr.
Ann Arbor, MI
800-289-4600
mrhandyman.com
$115,800 - $198,400
11426 N. Jog Rd.
Palm Beach Garden, FL
561-627-6507
laborfinders.com
$205,200 - $265,000
3100 S. Gessner, Suite 305
Houston, TX
770-514-4500
marbleslab.com
$256,500 - $652,500
5510 LaSalle, Suite 200
Tampa, FL
813-226-2333
beefobradys.com
$180,000 - $180,000
814 Kempsville Rd.
Norfolk, VA
757-466-3448
geeksoncall.com
$14,500 - $190,000
12800 Hwy. 13 S., Suite 500
Savage, MN
800-944-6811
novusglass.com
$197,400 - $771,000
1249 Quarry Ln., Suite 150
Pleasanton, CA
866-325-9663
pumpitupparty.com
$3,600 - $17,500
1531 Crescent Pl.
San Marcos, CA
866-348-4666
strollerstrides.com
business attitude
Time Management LET’S DO THE TIME WARP Common sense tactics for managing work and life – BY CAROLYN HEINZE
34 Franchise
Winter 07/08
There is no such thing as ‘time management,’ declares Pamela Dodd, because you can’t manage time. “What we are actually talking about when we are talking about time management is managing the events in your life,” says the organization psychologist and co-author (with Doug Sundheim) of The 25 Best Time Management Tools & Techniques: How to Get More Done Without Driving
Yourself
Crazy
(Peak
Performance Press). If you’re not clear on your own vision and values, striking a balance between work and life - while accomplishing everything you need to - is bound to run you ragged. “Anybody who is a franchisee has thought a lot about the business that they want to go into, and they have spent a lot of time picking that business,” Dodd says. “They also need to be clear on what their own personal vision and values are. If they are not clear on their own vision and values, they can just be running around being very busy and not particularly happy.”
www.franmarket.com
35
So how does this translate into
Instead of putting the business first and
franchising outfit comprised of more
the
Stack,
working your personal life around it,
than 30 Dairy Queen locations - notes
president and CEO of The Productivity
daily
Stack suggests the reverse approach.
that it took some time before she and
Pro
Ranch,
She acknowledges that there are
her husband, Rick (with whom she
of
five
periods when entrepreneurs must put
runs the business) found their own way
Leave
the
in overtime - especially during the
of managing work and life.
Office Earlier (Broadway Books),
start-up phase, or during a particular
instructs entrepreneurs to plan their
industry’s busy cycle. However, there
“It’s a learning process: you learn from
personal time first.
is room for downtime as well, as long
your mistakes and getting burned out,”
as you plan for it.
she said. “You develop, over time,
Inc.
grind? in
Laura
Highlands
Colo.,
and
author
books,
including
“Put the family, your personal life
a system of doing it right.”
and vacations on your calendar,
“Part of that is dictated by the business
blocked off, in stone,” she says.
and the cyclical nature of your
For the Plaisteds, as is the case for
“Buy your tickets a year in advance.
industry,” she says. “Take advantage
many, downtime is scheduled on a
You will never get a week that is
of the times when you know it’s going
seasonal basis. As of press time, Son
magically
to be slow.”
Group had just opened a new location.
open
when
you
are
running several different franchises.
“We have a construction season, we
I make time for me first, because
Gloria Plaisted, director of creative
have a season of just maintaining
otherwise, you’re just going to get
development for the Son Group
day-to-day operations, and we have a
the leftovers.”
LLC - a Knife River, Minn.-based
season of acquisitions, when we are active
about
looking
opportunities,”
for
Plaisted
new
explains.
“Depending on what season we’re in has a lot to do with how much time we have to ourselves. We are in construction mode right now, and we are basically working 24-7, but then it lets up and we are just doing the day-to-day operations. Sometimes it’s all or nothing, and we have learned to go with the ebb and flow. We know that, sometimes, we are not going to have any personal time, but we know that it is coming.” You can fit the odd day off into your schedule - once again - if you book the date and stick to it. Stack takes one day a month to herself for a little TLC. “I do whatever I want to do on that day. That’s all done in advance, and you work around it,” she explains. “It’s amazing how you can magically make
36 Franchise
Winter 07/08
things
work
around
an
appointment, because you treat it
While list-making is necessary, she
“One of the mistakes that people make
just as you would an appointment
adds, it loses its effectiveness if your
is that they allow themselves to be
with a client.”
lists are too long. “You make them so
controlled by technology, rather
long that you just keep adding to them
than the other way around. They need
Most people - especially entrepre-
as you accomplish things, and you
to actually spend focused time and
neurs, who are ambitious by nature -
don’t feel like you are ever getting
effort - especially as franchise owners
plan to do too much. Usually, this is a
anywhere.”
- to be strategic, and to think long term, and to work on the business
result of what we perceive to be outside pressures, according to Dodd,
One of the biggest obstacles to
rather than in the business. The
which is false.
effective time management is the very
day-to-day operations are important,
invention that is designed to make our
but you have to have time set aside to
“It’s coming from the inside: we put
lives more convenient: technology.
think long-term and to be proactive.”
too much on our plates,” she says. “We
With messages coming at us in all
set up expectations for ourselves that
directions - via e-mail, text and
are too high, and when we don’t meet
telephone - there is a tendency to react
them, we become frustrated, resentful,
immediately, rather than concentrating
Carolyn Heinze
tired and stressed.”
on the most important task at hand.
(carolynheinze.blogspot.com) is a freelance writer/editor.
In our jam-packed Information Age,
“You get sucked into that e-mail
we must be very selective about how
vortex for two hours, and the end of
Pamela Dodd
we spend our time. In many cases, this
the day comes and you didn’t get
www.best-of-time-management.com
means uttering a word that many of us
anything worked on,” Stack observes,
have trouble pronouncing: ‘no.’
urging entrepreneurs to turn off their
The Productivity Pro Inc.
e-mail alerts, close their in-boxes, turn
www.theproductivitypro.com
“We say ‘yes’ to everything,” Dodd
off
observes. “We are afraid to hurt other
Then, schedule a time to return
their
phones
and
WORK!
Son Group LLC
people’s feelings and we don’t want to
those messages.
www.dqcurl.com/songroup
disappoint other people, so we agree to things that we know we are not going to get around to, or it’s going to take us a lot longer to get around to, or that we shouldn’t be doing it in the first place.” People that have mastered time management, Dodd explains, place their emphasis on execution and producing results. This requires a focus on what’s actually important. Dodd advises professionals to regularly pose the following questions: Is what I’m doing this minute moving me measurably closer to my goal? What is the best use of my time right now? What is the value-added from this task? Is there an easier way to do this? www.franmarket.com
37
YEAR AHEAD FOR SMALL BUSINESS GROWTH Franchisees should pay attention to market in 2008, IFA exec says BY ROBERT PITTS Franchise Market Magazine
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Winter 07/08
It’s the question everybody in
How do you see the prospects for franchisors and franchisees? Any better or worse than for nonfranchised startups? In what way?
business is asking: What’s the new year going to be like for small business?
The growth of franchising means more opportunity for both franchisors and franchisees. Comparing franchises to non-franchised start-up businesses is always something of an apples versus oranges comparison. Both have their own specific advantages.
Well, it should be pretty strong for franchisees, provided they pay attention to the guidance and warnings coming from their respective franchisors - and provide feedback when possible.
That’s the word from Matthew Shay, president of the International Franchise Association. Franchise Market Magazine recently conducted an e-mail interview with Shay to get his perspective on 2008.
FMM: In general terms - and based on the indicators that you watch how do you see the year ahead for small business growth? Shay: Our members are telling us that they’re optimistic about the coming year, especially in view of recent franchise development programs and expositions we’ve done where discussions were upbeat and focused on growth strategies. One of the most interesting aspects of franchising is its diversity. Today, franchises operate in 75 to 80 different industries. That diversity provides an advantage in that it helps buffer franchising from rapidlyshifting economic trends such as a credit crunch. We’re excited about seeing the results of the second edition of an economic
MATTHEW SHAY President of the International Franchise Association
impact survey that’s being conducted by PricewaterhouseCoopers for the IFA Educational Foundation. Anecdotally, we know franchising has continued to expand, but this new research will provide statistical data that will show us the progress franchising has made since the first study of this type was conducted in 2004. That year, it determined that there were more than 767,000 franchised establishments contributing an economic output of $1.53 trillion or nearly 10: of the U.S. private sector economy.
“
...diversity provides an advantage in that it helps buffer franchising from rapidly-shifting economic trends such as a credit crunch.
”
Franchises, for example, are systems that have been tested in the marketplace and offer franchisees the advantage of not having to start from scratch, in addition to other pluses. Obviously we favor franchises over independent small-businesses, but in our outreach to prospective investors we encourage them to consider whether their personalities would find a better fit in a system that someone else has created or would they be more inclined to want to operate a business without the structural system that is necessary to make franchises successful. Another research project conducted by FRANdata Corp. for IFA found that the number of new franchise concepts being created has grown significantly. Since 2003, more than 1,000 business have adopted the franchise model, bringing the total number of franchise systems in the United States to more than 3,000, operating in 230 different lines of business. That same project found that the number of new franchised establishments grew in 2006 alone by nearly 30,000 units.
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What economic indicators should franchisees be paying attention to?
From the SCORE Perspective
With so many different industries operating in franchising, the answer to that lies in the particular type of franchise. Some are going to be more directly affected by changes in the credit markets which will affect their ability to borrow money, while others should pay closer attention to indicators such as energy prices.
A TOUGH 2008 NOTHING NEW FOR BUSINESS BY ROBERT PITTS Franchise Market Magazine
But paying close attention to communications coming from franchise headquarters is essential since franchisors will be monitoring trends and indicators on a broader level and changing the system’s strategies to meet such challenges.
What are some things franchisees can do to bolster their prospects for the year ahead? Following the proven plan that the franchise system has created is always essential. In today’s instant-news environment, it’s easy to get distracted by things that, in the long run, will have no affect on your business. We recommend not only paying close attention to the information that a franchise system regularly shares with its franchisees, but providing meaningful feedback whenever possible. After all, franchisees are the eyes and ears of a franchise system, so the information they gather from customers is crucial to the operation of the business.
40 Franchise
Winter 07/08
Small business success in 2008 will be characterized by two words: vigilance and negotiation, according to Martin Lehman, a counselor and marketing director for the Service Corps of Retired Executives in New York. SCORE operates in cooperation with the U.S. Small Business Administration to provide free and confidential small business advice for entrepreneurs nationwide. Lehman said the vigilant franchisee will be able to spot market changes and react accordingly - a fundamental skill he or she should be able to exercise at any time. “It’s still running a business from day to day and watching what you’re doing,” he said.
MARTIN LEHMAN Counselor and Marketing Director for the Service Corps of Retired Executives in New York
taking care to find a stable operation with which they can negotiate. Lehman said SCORE counselors are still very busy, advising enthusiastic people who are seeking to start a small business. For all of the dour media reporting on the economy, Lehman said 2008 will simply be another year of challenge - as is every year in business.
As for negotiation, success may depend on the franchisee’s ability to influence the franchisor, Lehman said. In other words, is the franchisee valuable enough to warrant help if needed?
“The year 2008 is a big question mark - whether you’re a small business or a large business,” he said. “Obviously, it’s not going to be easy. But it’s nothing new, really, for any business - except maybe the pressure will be greater.
Lehman urged would-be franchisees to be cautious in selecting a franchisor -
“Do I think it’s going to be tough? Yes, but it’s always tough,” he said.
Franchise OOPS! In the Fall Issue, "Partner" On-Call Network was not listed correctly.
44 Franchise
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SBDC success
ASBDC NETWORK
Association of Small Business Development Centers
Small Business Development Centers Established through a public/private partnership by Congress in 1980, the Small Business Development Center program is the most comprehensive, efficient and effective business assistance network in the nation. The mission of the SBDC program is to help new entrepreneurs realize their dream of business ownership and existing businesses remain competitive in the complex marketplace of an ever-changing global economy. Over 1,100 local SBDC offices extend entrepreneurial education to meet small business needs, through free individual counseling, training and research assistance while serving over 700,000 clients THINGS TO KNOW annually, creating over 74,000 SBDC in-depth new jobs, and clients* generated generating over $6.1 billion in $500,000,000 in new sales combined new tax revenues for Go on the the federal govWeb and visit asbdc-us.org ernment and state governments .
ASBDC Mission Statement The ASBDC (Association of Small Business Development Centers) represents the collective interest of America’s Small Business Development Center
46 Franchise
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Network. ASBDC seeks to improve the SBDC national network by promoting, informing, and supporting the work of all state SBDC programs. ASBDC members as a national network deliver nationwide educational assistance to strengthen small/medium business management, thereby contributing to the growth of local, state and national economies.
Chocolate Empire Company Client Profile Martha Flechas, owner Assisted by the SBDC in Miami
•SBDCs help small businesses increase sales. SBDC in-depth clients* generated $6.1 billion in new sales in 2004.
• SBDC clients’ sales grow faster. Small businesses that received SBDC assistance experienced sales growth of 18.5% between 2003 and 2004 – compared to 6.6% for businesses in general.
•SBDC clients create more businesses. More than 60% of all pre-venture SBDC clients started 16,140 businesses.
• SBDC clients find out where to get money. SBDCs helped clients obtain an estimated $2.6 billion in financing in 2004. Small business owners and aspiring entrepreneurs can go to their local SBDCs for free, face-to-face business consulting and at-cost training on writing business plans, accessing capital, marketing, regulatory compliance, international trade and more. The SBDCs are a partnership that includes Congress, the U.S. Small Business Administration (SBA), the private sector, and the colleges, universities and state governments that manage SBDCs across the nation. * Source of Statistics: SBA; and the “Economic Impact of Small Business Development Center Counseling Activities in the United States: 2003-2004,” by Professor James J. Chrisman of Mississippi State University
When Martha Flechas came to the United States in 1997, she made it her personal goal to own a company. Toward this end, in June 2003, she began attending classes put on by the Small Business Development Center at Florida Atlantic University. Miami Office. At the same time, she discovered the art of producing different sorts of chocolate products from someone with whom she attended church. Among the products she imagined selling: chocolate souvenirs for all occasions. Today she does just that, as owner and operator of her own company, Chocolate Empire, Inc. While taking SBDC classes to increase her knowledge of small business operation, Martha met with Certified Business Analyst Nancy Orozco. During their first meeting, Nancy advised her to concentrate her marketing and manufacturing efforts on just one of her current products, the chocolate souvenirs. This allowed Martha to focus her efforts on growing her business more efficiently. Sales have steadily increased, and now Martha has two private investors willing to provide the financial injection her business needs to move to a commercial location and grow.
INSIDE SBA
THE SBA CAN HELP YOU START Congratulations on thinking about starting your own business. Each day thousands of people across the United States exercise their independence by creating small businesses.
Small Business Administration and its partners can help at every stage of turning your entrepreneurial dream into a thriving new business. expand your business, obtain government contracts, recover from disaster, and have your voice heard in the federal government.. You can access the SBA help online 24 hours a day at www.sba.gov or visit one of their local offices for assistance. You can find your local office at our Web site or by checking the government pages of your phone book.
HELPFUL WEB INFO SBA www.sba.gov
SCORE www.score.org
You can use SBA resources to help organize your thoughts on what type of business you want to open.
W
hether your target market is global or just your neighborhood, the U.S. Small Business Administration and its partners can help at every stage of turning your entrepreneurial dream into a thriving new business. If you’re just starting, the SBA and its resources can help you with loans and business management skills. If you’re already in business, you can use the SBA’s resources to help manage and
SBA resources include district offices in every state and territory, nearly 400 offices of SCORE – Counselors to America’s Small Businesses, and more than 70 Small Business Development Centers (SBDC) primarily located on college campuses. These professionals can also help you with writing a formal business plan, filling out loan applications to finance your business, managing and expanding your business, finding opportunities to sell your goods or services to the government, recovering from disaster or acting as advocates for small businesses with Congress and regulatory agencies. The SBA also has programs for helping special audiences, such as women and veterans become small business owners.
Small Business Development Center www.sba.gov/sbdc/index.html
SBA Business Plan Help www.sba.gov/starting_business/index.html
Business.gov 24/7 access to the critical information businesses need from the federal government: www.business.gov
Services for Women Entrepreneurs: www.sba.gov/women
Franchise Startup Info: www.sba.gov/starting_business/startup/franchise.html
Franchise Registry: www.franchiseregistry.com
INSIDE SBA
SMALL BUSINESS SUCCESS
REQUIRES PLANNING Most new business owners who succeed have planned for every phase of their success. Thomas Edison, the great American inventor, once said, “Genius is 1 percent inspiration and 99 percent perspiration.” That same philosophy also applies to starting a business.
SMALL BUSINESS DEVELOPMENT CENTERS Small Business Development Centers, in coordination with federal, state, local and privatesector resources, including funding through a cooperative agreement with the SBA, meet the needs of small businesses and promote economic development in local communities by helping create and retain jobs. SBDCs provide services such as development of business plans, manufacturing assistance, financial packaging assistance, contracting assistance and international trade assistance. Based on client needs, SBDCs tailor their services to meet the evolving needs of the local small business community. As the SBA’s largest non-finance program, SBDCs meet the counseling and training needs of nearly 1 million start-ups or existing business clients annually. For more information, visit the Web site at: www.sba.gov/SBDC
First you’ll need to generate a little bit of perspiration deciding whether you’re the right type of person to start your own business.
START BY EVALUATING YOUR STRENGTHS AND WEAKNESSES. Are you a self-starter? It will be up to you – not someone else telling you – to develop projects, organize your time and follow through on details.
How well do you get along with different personalities? Business owners need to develop working relationships with a variety of people including customers, vendors, staff, bankers, lawyers, accountants and consultants. Can you deal with a demanding client, an unreliable vendor or a cranky staff person?
How good are you at making decisions? Small business owners are required to make decisions constantly, often quickly, under pressure.
Do you have the physical and emotional stamina to run a business? Business ownership can be challenging, fun and exciting. But it’s also a lot of hard work. Can you face 12-hour workdays six or seven days a week?
How well do you plan and organize? Research indicates many business failures could have been avoided through better planning. Good organization – of financials, inventory, schedules, production – can help avoid pitfalls. If you haven’t already done so, after you’ve answered those questions you’ll need to decide what type of business you want to start, and where it will be located. Do you want a home-based business? Want to buy an existing business? How about opening a franchise of a chain business? Each type has advantages, and SBA’s professionals can help you sift through it all. For more information on types of businesses, see page 63.
INSIDE SBA
Business.gov WRITE A BUSINESS PLAN. After you’ve thought about your business, the next step is to develop a business plan. The business plan is a formal document explaining in some detail your plans to develop a financially successful business. It’s vitally important for two reasons:
MARKETING • Discuss the products and services your company will offer. • Identify customer demand for your products and services. • Identify your market, its size and locations. • Explain how your products and services will be advertised and marketed. • Explain your pricing strategy.
FINANCIAL MANAGEMENT • Preparing a business plan forces you
to think through every aspect of your business. If you need outside money, your business plan will be one of the first things the lender or investor wants to see. • A business plan serves as an
assessment tool for the owner. A comprehensive business plan is not done on the spur of the moment. It can be a long process, and you need good advice. The SBA and its resource partners, including Small Business Development Centers located on many college campuses, and SCORE, Counselors to America’s Small Business, have the expertise to help you craft a winning business plan. You can find the nearest SBDC at: www.sba.gov/sbdc/. The nearest SCORE chapter can be located at www.score.org. You can also find business-plan help on the SBA’s Web site at www.sba.gov/starting_business/index.html.
GOOD BUSINESS PLANS CONTAIN: INTRODUCTION • Give a detailed description of the business and its goals. • Discuss ownership of the business and its legal structure. • List the skills and experience you bring to the business. • Discuss the advantages you and your business have over competitors.
• Explain your source and the amount of initial equity capital. • Develop a monthly operating budget for the first year. • Develop an expected return on investment and monthly cash flow for the first year. • Provide projected income statements, balance sheets for a two-year period. • Discuss your break-even point. • Explain your personal balance sheet and method of compensation. • Discuss who will maintain your accounting records and how they will be kept. • Provide “what if” statements addressing alternative approaches to problems that may develop.
Business.gov provides 24/7 access to the critical information businesses need from the federal government. Business.gov is managed by the SBA in partnership with federal agencies providing business-oriented programs and services. You can find links to accurate information on how to comply with federal rules and regulations; all the government forms you’ll need; and tax information from federal and state tax resources, including forms and assistance. Business.gov has thousands of forms issued by more than 40 federal agencies. You’re just a computer click away from help 24-hours a day at www.business.gov
OPERATIONS • Explain how the business will be managed day-to-day. • Discuss hiring, personnel procedures. • Discuss insurance, lease or rent agreements, and issues pertinent to your business. • Account for the equipment necessary to produce your goods or services. • Account for production and delivery of products and services.
CONCLUDING STATEMENT Summarize your business goals and objectives and express your commitment to the success of your business. Once you have completed your business plan, review it with a friend or business associate or SCORE counselor or Small Business Development Center representative. When you feel comfortable with the content and structure, review and discuss it with your lender. Remember, the business plan is a flexible document that should change as your business grows.
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INSIDE SBA
WOMEN BUSINESS OWNERS Women entrepreneurs are changing the face of America's economy. The SBA serves women entrepreneurs nationwide through its various programs and services, some of which are designed especially for women. There are women’s business ownership representatives in every SBA district office to help women access all
of SBA's programs and services, including loan guaranties, federal contracting opportunities, training, counseling and more. These local representatives can also provide information about other local resources available for women entrepreneurs.
Another valuable tool available for women business owners and entrepreneurs is the Women's Business Center Program, funded in part through a cooperative agreement with the SBA. Located across the country, approximately 100 WBCs provide training, technical assistance, counseling and mentoring specifically to women, especially those who are socially and economically disadvantaged. Mindful of the special needs of women entrepreneurs, the centers offer their services at convenient times and places. In addition, some centers provide child care, and many provide their materials in Spanish and other languages, depending on the unique needs of the communities in which they are located. Many classes offered by the centers are either free or charge a small fee. And often there are scholarships to help those who need them. If you can’t get to a Women’s Business Center, the full range of services is available through the SBA’s Web site for women entrepreneurs, which provides access to all of the SBA's online services, including its extensive library of information, training courses and electronic tools designed to help small businesses. This site also contains information about the services available in local communities. It can be accessed at: www.sba.gov/women.
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INSIDE SBA
WHAT TYPE OF BUSINESS DO YOU WANT? FRANCHISING Franchisees have been active particpants in the SBA's small business loan program for many years.
There are primarily two forms of franchising: 1) product/trade name franchising 2) business format for franchising. In the simplest form of franchising, while you own the business, its operation is governed by the terms of the franchise agreement. For many, this is the chief benefit for franchising. You are able to capitalize on a business format, trade name, trademark and/or support system provided by the franchisor. But you operate as an independent contractor with the ability to make a profit or sustain a loss commensurate with your efforts.
HOME BASED BUSINESS CONSIDERATIONS
One suggestion is to set up a separate office in your home to create this professional environment.
Going to work used to mean traveling from home to a plant, store or office. Today many people do some or all their work at home. Garages, basements and attics are being transformed into the corporate headquarters of the newest entrepreneurs – the home-based business person.
Before diving headfirst into a homebased business, you must know why you are doing it. To succeed, your business must be based on something greater than a desire to be your own boss. You must plan and make improvements and adjustments along the road.
Working under the same roof where your family lives may not prove to be as easy as it seems. It’s important to work in a professional environment.
Getting Started
Ask yourself these questions – and remember, there are no best or right reasons for starting a home-based business. But it is important to understand what the venture involves.
There are more than 3,000 franchised businesses. The challenge is to decide on one that both interests you and is a good investment. Many franchising experts suggest that you comparison shop by looking at multiple franchise opportunities before deciding on the one that's right for you. Some of the things you should look at when evaluating a franchise: profitability, effective financial management and other controls, a good image, integrity and commitment, and a successful industry. If you are concerned about the risk involved in a new, independent business venture, then franchising may be the best business option for you. Remember that hard work, dedication and sacrifice are key elements for success. For more information visit the SBA Web site at: www.sba.gov/starting_business/startup/franchise.html
or visit the Franchise Registry at www.franchiseregistry.com or call your local SBA office. www.franmarket.com
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INSIDE SBA
Ask yourself: • Can I switch from home responsibilities to business work? • Do I have the self-discipline to maintain schedules? • Can I deal with the isolation of working from home? • Am I a self-starter?
FINDING YOUR NICHE Choosing a home business must be approached carefully. Before you invest time, effort and money.
Ask yourself: • Does my home have the space for a business? • Can I identify and describe the business I want to establish? • Can I identify my business product or service? • Is there a demand for that product or service? • Can I successfully run the business from home?
LEGAL REQUIREMENTS A home-based business is subject to many of the same laws and regulations affecting other businesses.
Some general areas include: • Zoning regulations (including certificates of occupancy). If your business operates in violation of them, you could be fined or shut down. • Product restrictions. Certain products cannot be produced in the home. Most states outlaw home production of fireworks, drugs, poisons, explosives, sanitary or medical products and toys. Some states also prohibit home-based businesses from making food, drink or clothing. • Copyrights. Protect thoughts and original writings, recordings, broadcasts. • Federal self-employment tax • Immigration Act. Verifies the eligibility of new employees. • Adequate insurance. Covers liability, property, business interruptions, key persons, autos. • Workers’ Compensation
Be sure to consult an attorney and your state’s department of labor to find out which laws and regulations will affect your business. Additionally, check on registration and accounting requirements needed to open your home-based business. You may need a work certificate or license from the state. Your business name may need to be registered with the state. For home-based businesses, a separate business telephone and bank account are normally required. Also remember, if you have employees you are responsible for withholding income and social-security taxes, and for complying with minimum wage and employee health and safety laws. If you’re convinced that working from home is for you, it’s time to create your business plan. The SBA and its resource partners, such as SCORE and SBDCs can help make the process easier.
CHOOSING YOUR BUSINESS STRUCTURE You may operate your business under one of many organizational structures generally chosen for liability and tax reasons. The most common organizational structures are sole proprietorships, general and limited partnerships, C and S corporations and limited liability companies. Each structure offers options appropriate for different personnel situations and
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INSIDE SBA
which affect tax and liability issues. If you’re uncertain where to start, contact the SBA first and you’ll be referred to the proper source.
SOLE PROPRIETORSHIP One person operating a business as an individual is a sole proprietorship. It’s the most common form of business organization. Profits are taxed as income to the owner personally. This rate is usually lower than the corporate tax rates. The owner has complete control of the business, but faces unlimited liability for its debts. There is very little government regulation or reporting.
GENERAL PARTNERSHIP A partnership exists when two or more persons join together in the operation and management of a business. Partnerships are subject to relatively little regulation and are fairly easy to establish. A formal partnership is recommended to address potential conflicts, such as, who will be responsible for performing each task; what, if any, consultation is needed between partners before major decisions, etc. Under a general partnership each partner is liable for all debts of the business. Profits are taxed as income to the partners based on their ownership percentage.
the corporation. It’s the most complex form of business organization and is comprised of shareholders, directors and officers. The corporation can own assets, borrow money and perform business functions without directly involving the owners. Corporations are subject to more government regulation and have the advantage of limited liability, but not total protection from lawsuits.
risk only their investment, not personal assets. The limited liability partnership is similar to the LLC, but it is aimed at professional organizations.
SUBCHAPTER “S” CORPORATION This is a special section of the Internal Revenue Code and permits a corporation to be taxed as a partnership or sole proprietorship, with profits taxed at the individual, rather than the corporate rate. A business must meet certain requirements for Subchapter C status. Contact the IRS for information.
LLCs and LLPs The limited liability company is a popular business form. It combines selected corporate and partnership characteristics while still maintaining status as a legal entity distinct from its owners. As a separate entity it can acquire assets, incur liabilities and conduct business. It limits liability for the owners. LLC owners
LIMITED PARTNERSHIP Like a general partnership, this is established by an agreement between two or more individuals. However, there are two types of partners. • A general partner has greater control in some aspects of the partnership. For example, only a general partner can decide to dissolve the partnership. General partners have no limits on the dividends they can receive from profit so they incur unlimited liability. • Limited partners typically receive a share of profits based on the prorated amount on their investment, and the liability is similarly limited in proportion to their investment.
“C” CORPORATION A “C” corporation is a legal entity made up of persons who have received a charter legally recognizing the corporation as a separate entity having its own rights, privileges and liabilities, apart from those of the individuals forming www.franmarket.com
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[ CLOSINGQUOTES ] Quotes From Successful People
“
You aren’t wealthy until you have something money can’t buy. —Garth Brooks
The beginning is the most important part of the work. - Plato The believer is happy; the doubter is wise. - Hungarian proverb The best executive is the one who has sense enough to pick good men to do what he wants done, and self-restraint to keep from meddling with them while they do it. - Theodore Roosevelt If money be not thy servant, it will be thy master. - Francis Bacon There are no shortcuts to any place worth going. - Author unknown He who loses money, loses much; He who loses a friend, loses much more; He who loses faith, loses all. - Eleanor Roosevelt The bravest are surely those who have the clearest vision of what is before them, glory and danger alike, and yet notwithstanding, go out and meet it. - Thucydides
54 Franchise
Winter 07/08
Empty pockets never held anyone back. Only empty heads and empty hearts can do that. - Norman Vincent Peale The man who does things makes many mistakes, but he never makes the biggest mistake of all doing nothing. - Benjamin Franklin
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Great things are not done by impulse but by a series of small things brought together. - Vincent Van Gogh Setting an example is not the main means of influencing others; it is the only means. - Albert Einstein Wealth - any income that is at least one hundred dollars more a year than the income of one's wife's sister's husband. - H. L. Mencken We will either find a way - or make one. - Hannibal
Work for the fun of it, and the money will arrive some day. —Ronnie Milsap