A lot has changed since TacoTime International Inc.'s founder, Ron Fraedrick, mortgaged his home in 1960 to come up with the $5,000 he needed to launch the Eugene, Oregon-based franchise. "Nobody really knew what franchising was then," says head of international development John Shickich of TacoTime's early days. "It was a bunch of entrepreneurs feeling their way through a new way of growing a concept."
Today, TacoTime's original franchise agreements, short enough to be written on a napkin, have expanded to numerous pages that rest in the hands of approximately 330 franchisees. But even within a more complicated regulatory framework, the essence of the franchising model has remained intact, says Shickich. "The core element of [taking] a perfected concept and teaching people how to do it still works." In 1997, it worked to the tune of $110 million in gross sales.
Over the years, technology has brought about some of the biggest changes. "We try to innovate through technology to lower our costs and reduce the risk of foodborne illness," says Shickich. "One of the things we're noticing is every time we make a significant technological change, it helps reduce costs and improve sales."
When TacoTime started out, its primary means of marketing was through individual stores. Today, the franchisor's marketing has expanded to include co-op advertising with TacoTime's corporate stores and franchise outlets. "There's a synergy there," says Shickich. "You get a lot more bang for your buck."
Shickich believes all of franchising's rules and regulations may actually provide a bonus to franchisors. "It's very positive in that [the law] requires you to disclose key information about who you are and what you do," he says. "It's good for franchisors to [review that information] regularly and look at the business they're in and what they're doing."
The wave of TacoTime's future? Expanding beyond America's borders. Says Shickich, "It's a great benefit to go overseas, but it brings a host of challenges," challenges the company is meeting head-on in such locations as Asia, the Middle East, Europe and Canada.