On the Go
Brian Carter first saw Wheelchair Getaways, a wheelchair-accessible van rental company, advertised in a disabled services directory in 1995. When Carter, who has spina bifida, called the Versailles, Kentucky, company, he realized it offered more than a transportation solution.
"We help disabled individuals who may feel trapped at home by providing them the opportunity for [business ownership]," explains Stewart Gatewood, president of Wheelchair Getaways, which has 31 franchises in the United States and Puerto Rico.
Carter had used a power wheelchair as a student at the University of Kentucky. "With no way to transport the chair, there was nowhere I could [go] but to classes and back," says Carter, 25.
In 1996, he, his mother, Noretta von Helm, and friend Norita Rowe became partners in Getaways' only Kentucky franchise.
Thanks to advertising and referrals, Carter's fleet has grown to three full-sized vans and four minivans. "It's fantastic when you see people who can't get out, and all of a sudden they've got this van and they can travel and do what they want," says Carter. "That's where the real joy in this business comes in."
For The People
By Elaine W. Teague
AFC enterprises Inc., parent company of Churchs Chicken, is committed to minority franchising and the economic empowerment of U.S. inner-city communities. In keeping with its mission, AFC has hatched a "New Age of Opportunity" philosophy and recently made the Atlanta Franchise Development Co. (AFDC) its largest franchise partner--and the nation's largest African-American restaurant franchise owner. The AFDC, under president and CEO Dwayne Heard, will purchase 100 Churchs locations and has plans to build 100 additional restaurants.
The shared philosophy of AFC and AFDC will be the cornerstone of AFDC's new Employee Ownership program, which will allow restaurant managers to buy units. Similarly, AFC's PLUS (Programs Launched Universally for Success) Program gives AFC an opportunity to offer a lower cost of entry to individuals purchasing a Churchs franchise by targeting minority franchisees in government-assisted empowerment zones.
"Inclusion" is the '90s buzzword at AFC's Atlanta headquarters. "[We provide] annual scholarships to college-bound Churchs employees or children of employees, and we've dramatically increased the number of our minority suppliers," says Hala Moddelmog, president of Churchs and, fittingly, the first woman to head an international food-service chain.
AFC has also built 100 homes for low-income residents through the international program Habitat for Humanity, with a pledge to build 100 more.
By Janean Chun
Since we last visited Scott Shane, assistant professor of entrepreneurship at the Massachusetts Institute of Technology in Cambridge ("Opportunity Insider," September), he has broken new ground in his quest to uncover the factors that determine franchise survival. Whereas he previously studied individual factors, Shane has now determined that unexpected combinations provide new franchise systems with advantages. "This is the first time I've ever examined the interaction of these different factors," says Shane. His latest study found that new franchise systems are more likely to survive if they meet this criteria:
- They are ranked highly in Entrepreneur magazine's Franchise 500 and are founded in states that require franchise registration. "State regulators aren't necessarily looking for the quality of the system--they're looking for full disclosure. And Entrepreneur is looking for indications of quality, geared heavily toward growth," says Shane. "These are two different, and yet complementary, kinds of investigation. Franchisors who are both disclosing properly and growing rapidly offer many advantages."
- They have a higher percentage of franchised outlets and are located in states with laws restricting termination of franchisees. "A new franchisor can grow faster through franchised outlets, so a higher ratio of franchised outlets to company-owned outlets is beneficial. Without termination laws, franchisees aren't protected against opportunistic franchisors. It becomes easier for franchisees to be terminated and harder to build a system of mostly franchisees with relatively few company-owned outlets."
- They require comparatively high capitalization and have a higher percentage of franchised outlets. "When the amount of capitalization needed for a franchised outlet is higher, you need more resources, so it's better to have a system that's more heavily franchised rather than company-owned," says Shane. "Otherwise, you can't grow quickly enough."
By G. David Doran
Franchisors are seeking creative venues to battle saturation. Melbourne, Florida-based Kinderdance International Inc. is definitely innovative: Who else but McDonald's can claim outlets at high-caliber locales such as the Kennedy Space Center and Walt Disney World in Florida, and the World Trade Center in New York City?
Devin McHugh, a Kinderdance franchisee for 11 years, was teaching in about 12 different locations per week in Brevard County, Florida, when she got a call from the director of the Kennedy Space Center's Childhood Development Center. The director had heard about the mobile dance and movement program for children ages 2 through 8 and wanted McHugh to teach at the center. "Kennedy is an extremely large facility, but it is run well. Our program fit right in," says McHugh.
The sprawling 84,000-acre space-flight complex may be intimidating to some, but McHugh saw an opportunity. "The more kids we can reach, the better," she says.
Pizza The Pie
By G. David Doran
Employees who fantasize about being the boss will be glad to hear this: Marco's Pizza Inc., a Toledo, Ohio-based pizzeria, has a number of franchisees who once delivered pizzas or tossed dough for the restaurant.
Eric Schmitt, director of franchise sales for Marco's, believes employees who start at the bottom make the most successful franchisees. "They understand the work, the hours, and the problems with hiring and firing," he says. Called "internal growth," Marco's policy allows employees to gain experience for owning and managing a restaurant franchise.
Delivery drivers Todd Timmins and Joe Boles Jr. are cases in point. "Since we'd worked [at] Marco's, we already knew 90 percent of what it took to run a store," says Boles. "We just needed to learn the other 10 percent--the administrative and ownership aspects of it." Timmins and Boles now own three stores in Ohio.
Schmitt shares his employees' enthusiasm for internal growth, which accounts for more than a quarter of Marco's franchisees. "They see the opportunity that exists," he says. "They know they can move into management, and they get very gung-ho about it."
By Natasha Emmons
Looking for a way to take advantage of the Internet explosion, but you're not exactly a techie? With The Internet Yellow Pages Inc., you can become an official "Internet consultant" even if you don't know the difference between a mouse and a modem.
Internet Yellow Pages consultants sell ad enhancements to the 16 million businesses in the national Internet Yellow Pages. Consultants give listed businesses the option to add animation to their ads, for example, or to be listed first when users do a search of the database. Advertisers can even choose to sell their merchandise directly through a link to their own site. And unlike the traditional, printed Yellow Pages, businesses advertising in the Internet version can update their ads as often as they like.
"The beauty of the Internet Yellow Pages is that you have a national directory that can [connect] you to local advertisers," says Michele Erard-Coupe, president and CEO of Chester, New Hampshire-based Internet Yellow Pages.
Trainees pay between $995 and $5,500 for the initial sales instruction, which includes a manual, practice selling ads, and even personal coaching, depending on the package chosen. There are no territory restrictions, so consultants can sell ads anywhere in the United States.
By G. David Doran
A plastic life-sized cow stands next to a busy highway, wearing a sandwich board that begs passersby to "Eat Mor Chikin," in scrawled handwriting. The newest ad campaign for Atlanta-based Chick-fil-A Inc. may sound like a bad joke, but if the numbers are any indication, people are taking the cow's pleadings to heart. The company started 50 years ago as a chicken restaurant so small it was actually called "The Dwarf House." Chick-fil-A now has 750 locations in 35 states plus South Africa and Canada, with 1996 sales of $600 million.
According to Chick-fil-A's Huie Woods, the key to the company's expansion is its independent operators. Operators pay $5,000 to sublease a pre-built location from the company, but before stepping behind the counter, they receive six weeks of paid training in store operations and marketing.
While it's not a franchise, Chick-fil-A takes 50 percent of net profits and 15 percent of gross sales. However, operators are guaranteed a $30,000 base salary regardless of profits, which can exceed $100,000 per year in some freestanding locations. And, if that isn't enough, Chick-fil-A restaurants are closed on Sundays, a long-standing company tradition, giving employees the day off.
By Natasha Emmons
Auto painting and body works giant Maaco Enterprises Inc. will be seeing green if Denver-area franchisee and environmental-management advocate Judi Sorensen has her way.
Sorensen, who helped launch a coalition in Denver called the Northeast Metro Pollution Prevention Alliance (NEMPPA) last December, hopes to help the environment through workshops aimed at community businesses.
"One of the greatest obstacles to both compliance [with environmental laws] and pollution prevention is lack of information," says Sorensen. At NEMPPA's first workshop in May, auto-paint suppliers provided information on environmentally friendly practices that save companies money. More workshops are planned for the auto-body industry this winter.
Funding has come from the Environmental Protection Agency and international petroleum company DuPont/Conoco Inc. Maaco is providing support in the form of information resources.
By Connie Cousins
- Game Plan
Minneapolis-based Grow Biz International--the parent company of used-merchandise franchises Once Upon A Child, Play It Again Sports and Disc Go Round, among others--has just added a sixth division to its franchise group.
With the recent acquisition of Cleveland-based Video Game Exchange (VGE), Brad Tait, president of the new division, expects to open 50 new It's About Games! stores next year.
It's About Games! sells used video, computer and board games; comic books; trading cards; and "Japanamation" videos. A competitive idea, considering VGE's 40 corporate-owned stores racked up $17 million in sales last year. That track record, plus Grow Biz's expertise, should be a winning combination.
In July, London-based Allied Domecq PLC, parent company of the Dunkin' Donuts and Baskin-Robbins Ice Cream chains, acquired Campbell, California-based sandwich chain Togo's Eateries.
Togo's acting president Kim Lopdrup says the three chains' units will become co-branded locations, drawing customers all day long for Dunkin' Donuts doughnuts, Togo's sandwiches and Baskin-Robbins ice cream.
The key to Ann Arbor-based Molly Maid Inc.'s newest franchise venture, Home Service Express, is simple: Consumers lead busy lives--a reality this home-cleaning franchise system has banked on since 1979.
Home Service Express opens this month as a sister company to Molly Maid, offering customers laundry and dry-cleaning pickup and delivery.
David McKinnon, Molly Maid CEO and chairman, says he foresees the company adding 50 to 75 Home Express Service units next year.
- Word Has It...
In August, Princeton, New Jersey-based Berlitz International acquired ELS Educational Services Inc. With the purchase, Berlitz adds to its career- and business-oriented language programs a franchise system chiefly aimed at students preparing to enroll in U.S. colleges or universities. ELS' franchise operation covers 16 countries; the company's revenues for 1996 were $62.6 million. Berlitz currently operates language schools in 39 countries worldwide.
Berlitz Franchising Co., 400 Alexander Pk., Princeton, NJ 08540, (609) 514-3000
Chick-fil-A, 5200 Buffington Rd., Atlanta, GA 30349, (404) 765-8000
Churchs Chicken, (800) 848-8248, ext.10, http://www.churchs.com
Grow Biz International, 4200 Dahlberg Dr., Minneapolis, MN 55422, (800) 645-7299
The Internet Yellow Pages Inc., 4 Haverhill Rd., Chester, NH 03036, (800) 377-1754
Kinderdance International Inc., (800) 666-1595, firstname.lastname@example.org
Maaco Enterprises Inc. (headquarters), 381 Brooks Rd., King of Prussia, PA 19406, (610) 265-6606
Maaco Enterprises Inc., 2324 E. Colfax Ave., Denver, CO 80206, (303) 377-3789
Marco's Pizza Inc. (headquarters), 5252 Monroe St., Toledo, OH 43623, (800) 262-7267
Marco's Pizza Inc., 31 Erie Rd., Tallmadge, OH 44278, (330) 686-6888
Massachusetts Institute of Technology, Sloan School of Management, email@example.com
Molly Maid Inc., (800) MOLLY-MAID
Togo's Eateries Inc., 900 E. Campbell St., Campbell, CA 95008
Wheelchair Getaways Inc. (headquarters), (800) 536-5518, http://www.blvd.com/wg.htm
Wheelchair Getaways Inc., P.O. Box 23812, Lexington, KY 40523-3812, WCGofKY@aol.com
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