Get With the System

A Hot Ticket

What's fueling the franchise connection? In part, it's the franchise industry's own continued growth over the past 30 to 40 years, according to Robert Purvin, the board of trustees' chairman for the American Association of Franchisees and Dealers in San Diego. "We estimate there are 500,000 franchisee-owned units and an equal number of independent dealerships in the United States today," Purvin says.

Another factor is the uniformity of franchise systems. "If you become an approved vendor for a franchisor, you can automatically multiply the number of customers who are either required to buy from you or encouraged to buy from you," says Purvin. "For example, by selling to 1,000 units in a franchise system, you don't have to make 1,000 separate presentations to 1,000 different businesses.

"In addition," Purvin says, "most franchise systems have very aggressive supplier programs in which franchisees come together to amalgamate their collective buying power. Vendors sell directly to these franchisee co-ops. It's a great way to increase your sales potential."

Franchise systems--spread throughout some 60 different industries--are poised and receptive to vendors who can supply their needs. And they need it all: mailing labels and printing services; spices and cooking utensils; custom fleet van rentals; and accounting services. Franchise systems look for vendors that understand how their systems operate, know their specific needs, and are prepared to deliver products or services that meet exacting specifications and quality-control standards.

"If you think you can change the specifications or do something differently, you're dead wrong," says Dr. Robert Justis, a professor of franchising at Louisiana State University's Institute for Entrepreneurial Education and Family Business Studies. "But adhere to a franchisor's specifications and provide the best quality and the largest quantity you can, and you can make millions."

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This article was originally published in the April 1999 print edition of Entrepreneur with the headline: Get With the System.

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