Eric Horstman's pitch to schools sounds a little like a bad infomercial: A brand-new scoreboard! Pads for the gym! New baseball uniforms! No cost or risk!
But Horstman's sports-marketing franchise is legit. Sports Image, based near Dayton, Ohio, sells advertising to local and national companies and uses the revenues to buy new equipment for its clients, which include schools, peewee leagues, parks and rec departments and colleges.
Sports Image acts as an ad agency, selling space on gym walls, scoreboards, banners and even tickets to sponsors. The sponsorship money is used to buy equipment for the schools, and Sports Image takes a percentage of the sponsorship dollars.
In 2002, Horstman, an engineer and self-proclaimed sports nut, was fed up with the day-to-day grind. Helping his high school alma mater find sponsors for a new basketball scoring table provided Horstman with his "aha" moment. Sports Image was born--and soon after started fielding calls from needy teams around the country.
Horstman realized that local knowledge was the best way to expand the base of advertisers and engage with new clients. So in 2009, Sports Image sold its first franchise.
We caught up with Horstman to get a glance inside his playbook--including plans to have 25 units by the end of this year.
How do you make money?
We make the bulk of our revenue when the school starts making revenue. We maintain the scoreboards with new sponsorship contracts so schools don't have "Harry's Plumbing" in left field when he's been out of business for 27 years. We're not going to make any money unless the school gets their free scoreboard--and a revenue check that we're splitting with them 50-50.
Who are your franchisees?
People from all walks of life with the urge to be on their own as a businessperson. A lot of franchises look to expand in their city and then expand in their region. I'm not so interested in what cities we are in--I'm more interested in the person. If John Doe is the perfect candidate and is in Des Moines, Iowa, versus Sarasota, Fla., guess what? Iowa has schools and parks and recs that are hurtin' just like there are in Sarasota.
Do franchisees work together?
One of the beauties of franchises is the power of the collective. When John Doe does something in Florida, we're spreading it through our franchise system, saying this is what we did, this is how it came together. And it starts putting those ideas in Jane Doe's head in Kentucky who has a similar problem.
Are you pushing out mom-and-pop pizza parlors as sponsors?
Seven out of the 10 sponsors we get are local or regional. And the school or organization is in charge. We get everybody OK'd by them. We want to give the local folks the first right of refusal.
Any plans to expand beyond high school and peewee leagues?
We're looking at event management. Eight or nine years ago an athletic director approached me about doing a basketball tournament in Dayton. Now it's called the Good Samaritan Hospital Flyin' to the Hoop tournament, and it was ranked as one of the top 10 prep events for high school basketball in the nation by USA Today. There are 16,000 people involved, and it brings $2 million into the local economy.