From the December 1998 issue of Entrepreneur

The Mohawks were dismal. We knew our town had never witnessed a worse little league hockey team. We tried, but our pathetic skating nonetheless produced a spotless record (no wins), and thus the team banquet was peppered with despair. Fortunately, our coach was an experienced loser and saved the season when he surprised us all by producing a few boxes of gleaming trophies from under the table. Until that point, we felt like failures, but as each of us received our trophies with such inscriptions as "Most Improved," "Hustle Award" and "Team Leader," each boy found redemption. Now that had a value that far exceeded the cost of a plastic trophy.

Crown Trophy Inc., a franchisor based in Yonkers, New York, has capitalized on people's need to be recognized since 1985, when it began franchising Crown Trophy stores. The company was also the top-ranked Sports Memorabilia/Recognition Products franchise in Entrepreneur's 1998 Franchise 500®. Besides trophies of all kinds, Crown Trophy stores offer engraving, signs, plaques, medals and desk accessories. The chain now has 54 stores in operation, and according to Crown management, there hasn't been a franchise failure, license cancellation or franchisee lawsuit in the chain's history.

That's pretty remarkable for a 13-year-old franchise, and it appears to be due to the company's attitude toward its franchisees. For example, according to Charles Weisenfeld, co-owner of this privately held company, the franchisor isn't interested in making a profit from the sale of supplies to franchisees. Rather, the company is content to see to it that its franchisees maintain the lowest prices in the business. In fact, selling "deep and cheap" ($4 to $6 per unit) is a primary company strategy that permits various organizations to afford participation awards, like those presented to my fellow Mohawks.

On the plus side for operators, stores close by 6 p.m. each evening and are closed on Sundays. On the other hand, very little business walks through the door unsolicited. Instead, franchisees spend a great deal of time smiling and dialing to time solicitations with the beginning and end of each local sports season.

Crown has a minimum monthly royalty payment that steadily increases over the first six years of the 10-year license. During this time, your royalty remains at 5 percent of gross sales if your annual sales are less than $500,000; during the first year, however, you must pay the greater of 5 percent of gross sales or $3,750. During your second year of operation, the minimum is raised to $7,500, and in year three, it's $10,500. Accordingly, a store paying a 5 percent royalty of $3,750 would have first-year sales of $75,000. If you paid $10,500 in royalties, your corresponding annual sales would be $210,000. This method of extrapolation is crude, but it should give you an idea of your minimum sales expectations while also reinforcing the fact that you'll need to have money tucked away to cover your personal expenses during the start-up period.

The initial investment, according to Crown's Uniform Franchise Offering Circular, ranges from $100,885 to $118,885. The bulk of this cost ($70,000 to $74,000) is paid to the franchisor for a start-up package that includes equipment, inventory and supplies.

To a team like the Mohawks--or any other worthy organization--companies like Crown Trophy are real winners.


Todd Maddocks is a franchise attorney and small-business consultant. You can reach him at TMaddocks@aol.com

Crown Trophy Inc., (800) 583-8228, scott@crowntrophy.com