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Film Stars

Crestcom franchisees use video and live presentation to bring management training to life.
July 1, 2000
URL: http://www.entrepreneur.com/article/29594

The Mind like the body, can grow soft if not put through its paces, and idle brains diminish productivity. Businesses that realize this know management training can provide a competitive edge and propel stagnant executives to greater success. Crestcom International Ltd. offers a franchise that serves this business-to-business need.

Primarily, Crestcom franchisees sell and facilitate training programs supported by proprietary videotaped lectures featuring well-known talent such as Zig Ziglar. The bestselling program by far is "THE BULLET PROOF Manager" series, a yearlong course that meets monthly for half-day sessions. The franchise's primary audience comprises middle managers from companies large enough to afford the suggested retail tuition of $3,000 but too small to have in-house training personnel. One of the great benefits of this training is that it's offered on a continuing basis, voiding one-day motivational-seminar syndrome in which enthusiasm is pumped up but quickly wanes. "Training isn't an event-it's a process," says Crestcom president Hal Krause. "In order to be effective, training must be ongoing."

Crestcom offers franchises in two flavors: standard or executive. Interestingly, everyone who's joined the U.S. system since 1995 has purchased the executive franchise, with an initial franchise fee of $52,500 compared to $35,000 for the standard one. If anything, this is a testament to the fact that the people at Crestcom know how to sell . . . or perhaps to the long-term per-spectives of franchisees. (Executive franchisees pay "distribution fees" of 34 percent of gross revenue; whereas 44 percent is charged for standard franchises.)

Crestcom franchisee Robert Arthur in San Diego, who has been involved with the program since 1996, describes himself as a fairly typical Crestcom franchisee. A middle-aged former corporate vice president of sales and marketing, Arthur says one of the best parts of being a Crestcom franchisee is "watching the participants learn and grow over the year."

Philip Friedman, a franchisee in Minneapolis, Minnesota, agrees the company has its benefits, but points out that franchisees spend a lot of their time selling the program rather than con-ducting seminars.

Running the franchise from home makes for a great commute. The hard part? Even after you've made the investment and been through the indoctrination process, all you have is a product, your training and a newly ingrained good attitude to put into play. In other words, if you can't burn up the phone lines to get clients, you could quickly become a "part-time" participant in this system. Translation: You may still need to make a living doing something else.

Crestcom makes earnings claims in Item 19 of their UFOC but specifically excludes part-time franchisees by only listing "active" U.S. franchisees operating on a full-time basis during the 1998 fiscal year. After applying this qualifying language, Crestcom only reports the gross revenue of 18 locations, although the advertising literature boasts over 100 franchisees in more than 45 countries. It's certainly fair to exclude international locations, but you need to question whether the earnings presented are statistically skewed.

If you decide this opportunity's for you, the estimated cost to open an executive franchise ranges from $61,855 to $72,360. That includes additional funds for three months but doesn't include your salary. Once they got past the break-even point, the franchisees I spoke with found this to be a rewarding business that utilized their previous corporate experience.

Entrepreneur's 2000

Management Training Programs

1. Crestcom International LTD. (NO. 229 overall)

2. Sandler Sales Institute (No. 368 overall)

3. Priority Management Systems (No. 402 overall)

4. Turbo Management Systems (Not ranked)

5. Promemtum LLC (Not ranked)


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