A Franchise of Her Own
Name recognition means a lot these days, and franchising provides entrepreneurs with exactly that-a recognizable brand name. In 1998, according to the International Franchise Association (IFA), nearly half of U.S. retail sales came from franchises. And with thousands of franchisors based in the United States alone, opportunities abound for those seeking this route to entrepreneurship. From homebased home-improvement services and fast-food restaurants to candy design shops, it seems there's a business out there to appeal to just about anyone, whether you're a man or a woman.
So it comes as a surprise that, with all these franchising opportunities ready for the taking, the ranks of women involved in franchising have declined in recent years. A recent study conducted for the SBA by Women in Franchising (WIF), a consulting firm in Chicago that works with women franchisees and franchisors, found that in 1995 (the most recent year for which figures are available), female ownership of franchises totaled 8 percent, down from 11 percent in 1990. By contrast, during those same years, the proportion of solely male-owned franchises increased to 62 percent from 60 percent.
The figures are puzzling-especially when you consider the fact that women are starting businesses at twice the rate of men in the United States. But Susan P. Kezios, president of WIF, points out several reasons for the apparent male/female discrepancy: "Opening a franchise often [requires] higher initial capital requirements than starting a business from scratch," she says. And Kezios claims that gender discrimination still exists in the franchise industry: "Franchising is still basically an old boys network, and sometimes, when women want to become franchisees, a franchisor will say, 'We want your husband in on it.'" Despite such obvious roadblocks, Kezios insists there's hope on the horizon. "In the past year and a half, for the first time, the International Franchise Association has made a big push to help women become [more] involved in franchising."
Last year, in fact, IFA hosted several franchise trade delegations and regional education conferences targeting women. Debbie A. Smith, IFA's vice president of public affairs and emerging markets, says the industry as a whole is beginning to accept women more and more. Case in point: The IFA's first woman chairperson took office this year.
A Success Story
One of the country's largest franchisors, Churchs Chicken, boasts a woman president. Hala Moddelmog, president since 1996, says Churchs recognized the gap forming between men and women franchisees several years ago and decided to do something about it. "We thought we should get the word out to women that franchising is a great way to have your own business," she says. "You get systems that are in place, training and a trademark, and yet there is still room for entrepreneurship." Churchs also recently launched its own professional mentoring program directed especially at women. According to Moddelmog, who points out that approximately 19 percent of Churchs franchisees are women, "We're recruiting women franchisees as mentors to go to various events and talk to women about franchising."
Moddelmog acknowledges that financing is one of the biggest obstacles for women franchisees. "Hopefully, times are changing for women getting financing," she says. "There are women out there who need angel investors, and we'd like to hook them up with other women franchisees who've already created their wealth and want to diversify for a small piece of the action in return."
But the idea goes far beyond just bringing more women into franchising-the fervent hope is that all the financing and franchisor effort will incite a new trend that builds on itself. Says Kezios, "More women franchisors will bring in more women franchise entrepreneurs."
As for Churchs, Moddelmog says, "It doesn't hurt having a woman as president."
Meet Mollie Garden
Company name and description: Plato's Closet is a retail store selling "gently used" clothes, accessories and the like, including CDs and jewelry, for teens and young adults. Garden's store is located in St. Cloud, Minnesota.
Starting point: Started plans in 1999 for a July 2000 opening; total estimated first-year costs were approximately $145,000 (including a $20,000 franchise fee).
2000 sales projections: $182,500
Shop around: It wasn't long before Garden, a lifelong shopaholic and mother of two children under the age of 3, had become a devotee of children's resale shops-especially the franchise Once Upon A Child. "I always shop them whenever I see one," she says. "I thought it would be great to open one myself." But Garden hesitated, and someone else beat her to it in her town. Undeterred, she contacted Grow Biz International, franchisor of Once Upon A Child, to discuss other franchising opportunities. Lucky for her, the company had just launched another resale retailing concept called Plato's Closet. "I liked what I heard and saw, and decided to go for it," she says. "And since I was familiar with Once Upon A Child, I felt comfortable with the franchisor."
Step by step: Though Garden believes she's more than capable of owning an independent shop, the benefits of franchising outweighed her desire for autonomy. "I realized that, since I had never owned a business, by buying a franchise, the franchisor would be there to help me with everything I needed to know to open a business," she says, which included, among other things, site selection, store design and layout, and marketing.
Deal her in: Garden also likes the fact that the company offers co-op advertising in her area-meaning Garden gets radio and TV exposure she couldn't afford on her own. The deal clincher for becoming a Plato's Closet franchisee was obvious to Garden, a veteran shopper: "For me, name recognition is huge-at this point, I don't regret my decision at all."
Why aren't there more women franchisors? "More women may not be involved in franchising because it's a little less creative. Though for me that's what I liked-the fact that it was less scary than going out on my own."
Meet Marsha Conant
Company name and description: Kwik Kopy Printing is a printing, copying and digital services franchise; Conant co-owns a Kwik Kopy in Fresno, California.
Starting point: 1982 with about $100,000 (including a $36,000 franchise fee)
2000 sales projections: $600,000
Risky business: When Conant and her partner, Marilyn Watts, 49, went into business together 18 years ago, both knew it was a risk-neither had any hands-on business experience. Recalls Conant, "I didn't know anything about running a business and neither did Marilyn." But it did help that entrepreneurship ran in Conant's blood: "My parents had their own business, and it was always a dream of mine to own one." Help wanted: The pair decided, early on, that franchising was the way to go. "We looked into Baskin-Robbins, but decided to open a Kwik Kopy because we knew two women who owned one and had done well," Conant recalls. Right from the start, the pair realized just how helpful it was to have a well-known franchisor behind them. "There were a lot of reasons why we were glad we franchised," Conant continues. "They really hold your hand throughout the start-up process. They had all the systems in place, including the advertising, which helped us get customers initially."
Brand aid: Conant thinks it's important today for everyone to be part of a nationally known network. "I think franchises are even more acceptable today because they're a known quantity," she explains. "There are just more successful ones around, while at the same time you see fewer independent small businesses making it." One reason: Name recognition.
By the book: For those who decide to buy a franchise, Conant advises following the franchisor's recommendations. "If you're going to pay money to have the name, then follow their plan," she says. "Their experience and expertise are also what you're buying."
Did you ever experience any franchisor discrimination? "Until four years ago there was an award called the Man and Woman Kwik Kopy of the Year Award. I kept saying they needed to change that because they were excluding any store that wasn't owned by a man and a woman. Finally they changed it to the Kwik Kopy Partners of the Year Award."
Why aren't there more women franchisors? "I think fewer women go into franchising because more women open businesses that they have long dreamt of opening-and probably aren't franchises. My dream wasn't a Kwik Kopy but to have a business of my own."
Meet Margaret McEntire
Company name and description: Little Rock, Arkansas-based Candy Bouquet International, started by McEntire, sells both homebased and retail franchises. The company's flagship product: "floral" arrangements made of candy. About 75 percent of Candy Bouquet's 400-plus franchisees sell the company's candy bouquet arrangements and gourmet chocolates through retail shops.
Starting point: 1989 with $1,000 in McEntire's garage; she started franchising the concept in 1993.
2000 sales projections: $5 million to $6 million in sold franchises; combined $40 million to $50 million in 2000 sales for all franchises
A budding business: Like many entrepreneurs before her, McEntire turned a fun hobby into a profitable business. She says, "I used to make these floral arrangements made of candy and give them to friends. People started asking me if they could buy them and told me what a cool business this would be." McEntire listened to friends and opened a small (90-square-foot) shop in Little Rock, selling her "flowers." Her handiwork got rave reviews around town. Before long, customers wanted to know her secrets to making the bouquets. "I realized that if people really wanted to learn how to do this, then I had an idea [that could be franchised]," she says.
Growth spurt: McEntire wrote her own franchise documents from scratch and began selling the first franchises for $2,500. Although she didn't need to buy any advertising her first year, she's since grown the business to include franchisees in 48 states and relies on both print and Internet advertising to attract new franchisees. The Internet has proven an effective recruiting tool for McEntire: "That's where I've picked up most of my foreign franchise sales," she says. Candy Bouquet franchises now span 29 countries worldwide.
Flower power: The Candy Bouquets themselves sell for roughly the cost of a floral arrangement. McEntire insists her Candy Bouquet chocolate roses covered with colored foil and cellophane are so realistic looking that people can't tell the difference right away.
Sweet success: Candy Bouquet franchise fees can range from $3,500 to $22,000, but McEntire charges no royalty fees. Candy Bouquet franchisees train for a week at company headquarters, where they learn to make and market the arrangements.
Share the wealth: McEntire and her husband, Jay (a board member), give a great deal back. They're big supporters of the Rainforest Preservation Foundation, and McEntire has set up a scholarship fund for her Little Rock employees. She says she learned two big lessons early on: "I was always persistent and had the attitude that if I quit when it was difficult, I would never get anywhere. And my husband always told me, 'If you get greedy, you lose.'"
Why aren't there more woman franchisors? "I think a lot of women don't go into franchising because, even though they're good with checkbooks, they're afraid to get into debt by spending that much money to get into franchising."
Ellen Paris is Entrepreneur's "Management" columnist.