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Outlook 2011







 New, Old Concepts Highlight Franchising  
New, Old Concepts Highlight Franchising

Franchising is a large industry that’s getting bigger with hundreds of new types of offerings, so many that there seems to be something out there for almost everyone.

Area franchise owners represent the varieties of opportunities available for the would-be franchise entrepreneur, ranging from newer ideas such as 1-800-Got-Junk to CD One Price Cleaners to Fast Signs. And of course there are also more traditional franchises such as ones for Subway sandwiches and Midas Muffler and Exhaust.

Franchising is a small business opportunity with big numbers, according to a study conducted by for the International Franchise Association’s Educational Foundation by PricewaterhouseCoopers.

The study found that there are more than 760,000 U.S. franchised establishments generating in excess of $1.5 trillion in economic activity and producing one out of every seven jobs.

Another Foundation study, “The Profile of Franchising 2006,” conducted by FRANdata Corp., determined that 900 new concepts began franchising in the United States between 2003 and 2005. Furthermore, out of the existing brands, 17 of the 18 categories of business experienced significant growth.

The International Franchise Association said that investment in a franchise ranges from as low as $10,000 to more than $1 million. But there can be situations where less money is needed as a down payment.

For instance, Carlos Aguilar of CD One Price Cleaners in Lisle is involved in a manage-to-own agreement.

“There is little money down. I lease the equipment until money is made to pay for it,” he said. “There is more sweat equity than capital involved. There is not a lot of money up front.”

Aguilar previously worked as a manger in another store of the same franchise.

The “One Price” refers to the $1.99 charge for any piece of dry cleaning except shirts. Shirts are priced at $1.09, which is similar to the cost at traditional cleaners. But for other pieces of dry cleaning such as suit jackets, pants and sweaters, the customer can save up to 60 percent.

Once Aguilar, who previously worked as a manager for other retailers, owns the Lisle franchise, he plans to acquire two or three more stores.

“I want to expand as long as I can get good people to work for me. You have to have good people. You also have to stay focused, set goals and chip away at them every day.”

Chris Singer, owner of a Subway franchise in Winfield, already has multiple franchises, and not just stores of the same brand. He and his wife started 13 years ago with a Dairy Queen franchise, also in Winfield. while he was working for a real estate relocation firm. When his employer was purchased by another company, Singer had the option of relocating or taking a buyout.

He took the buyout and invested in a Subway franchise six years ago. Both franchises were purchased because of the continuity of the operation, name recognition and the type of people who come to those types of establishments.

“I did not want to open a liquor store. I chose a path which involved kids, parents and seniors,” said Singer. “But it is not just a case of sitting back and watching the cash flow. It is not that easy.

“It is a lot of work, always managing people, a young group of people from 16-years-old to 25-years-old. You lose kids to college and for other reasons. You do a lot of training all the time. Some of the young people stand around and wait for instructions instead of doing free thinking. It is different than it was 10 years ago.”

But once people on the staff are trained, they can be shared from one store to another, according to Singer. “It is hard to do business at one store, but there is a synergy with multiple locations.”

John Mirski, owner of two Midas Muffler and Exhaust stores in Carol Stream and Hanover Park as well as ones in Carpentersville, Des Plaines and McHenry, has also found it more time-consuming to train employees because the nature of the business has changed since his father started the business in 1974.

“The operation has evolved into a full service auto business, not just mufflers and exhaust systems,” said Mirski, who joined the business in 1988. “The cost of training has gone up as much as 40 percent. Also, the margin on parts is not the same as it was years ago.”

One person in another type of franchise business has no plans for multiple locations.

“I am perfectly content with just one franchise,” said Shane Beard, who has been operating FastSigns in Naperville since 1996. Until the last few years, business has been growing at double digit rates.

“I know my business is not recession-proof, but I can work both sides of the equation since people need signs whether business is good or when it is down.”

Beard said he likes the “umbrella” effect that comes from having a nationally known franchise, that is, people who have moved here from elsewhere in the country may come into his store, having had a good experience in another FastSigns.

“Also, I am passionate about what I do. I enjoy making signs. In this business I was able to keep a foot in the arts from when I was a wedding and portrait photographer.

Another franchise owner never thought about that type of business while he was in the corporate world for 27 years. But opportunity knocked for Mark Bischoff after doing some house cleaning.

“I was cleaning up things around the house. I wound up having to work with garbage men and hauling things out to the curb,” he said. “Then I came across an advertisement for 1-800-Got-Junk.

“I liked the idea of bringing a level of professionalism to a mom-and-pop business by computerizing a system of scheduling, as well as uniformed people driving trucks with standard colors.”

Bischoff started his business in September of 2006 with two trucks and plans to eventually add a third truck for his territory, which covers several counties, including McHenry, Boone, Winnebago and Stephenson.

“There is not a lot of competition. So far business has been good. Homeowners and businessmen like the idea of well dressed service people coming to get the stuff. We will take away anything as long as it is not hazardous material.

“We are a premium service and charge $213 to $243 for items which take up a quarter to a third of a truck load. You get what you pay for. You never know what kind of service you might get from some other junk removal companies.

“We give a free estimate to a customer. We do not touch anything until customers ask us to proceed.”


Posted on Wednesday, August 08, 2007 (Archive on Wednesday, August 15, 2007)
Posted by mthomton  Contributed by mthomton
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