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Movin' On Up

Innovative franchisees take the risk out of choosing a new site.

Picking a successful location for your business is sometimes hit-or-miss. So how do you know your site is a smart investment?

After a few misses of their own, Taco John's franchisees Terry Newman, 42, and his brother Robert, 45, came up with a new approach: They decided to hit the road with a mobile unit in 1997. "We were trying to figure out a way to test a town without tying up a large amount of money," says Terry, a franchisee in Herrin, Illinois, since 1989. After a year at a test site, they review the numbers, analyzing demographics, accessibility and exposure. If the business has proved successful, they find a permanent location and construct a site while the mobile unit stays in operation.

When the Newman brothers first sought approval from headquarters, they ran into a bit of skepticism. But thanks to their detailed plans and professionalism, the company decided to take a risk and let them proceed. Since then, the Newmans' big idea has paid off: Their average store revenue was $456,000 in 1998, and that's increased by 42 percent this year. Today, the Newmans have five Taco John's sites, as well as plans for three additional stores and one mobile unit, which costs one-third the amount of setting up a permanent site.

"Once you build a full-sized store, you obviously can't pick it up and move it," says Terry. "With this, if you don't hit your goals, you're out a little bit of money, but at least you're not out half a million."

Contact Source

Universal Enterprises (Taco John's franchisee), (618) 942-2816, fax: (618) 942-4100

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This article was originally published in the November 1999 print edition of Entrepreneur with the headline: Movin' On Up.

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