Click to Print

Learning From College-Age Franchise Owners

These enterprising students made the smart choice to pursue franchise ownership. What can they teach you?
November 23, 2004
URL: http://www.entrepreneur.com/article/74308

College has long been a time to drink in knowledge, grow personally and begin exploring career options. It's still that, but something about the college experience is shifting. With the astonishing business successes and media exposure of their peers, many college students are realizing they don't have to walk down the job search road. Today, some form of entrepreneurship training is available at more than 1,500 colleges and universities nationwide, according to the Ewing Marion Kauffman Foundation. And the Collegiate Entrepreneurs' Organization, a Chicago-based organization that supports college students who want to start businesses, has grown from zero to 14,000 members since its inception five years ago, with entrepreneurship clubs on 120 university campuses nationwide. College students are purchasing franchises, too-and while some feel students might be too "wet behind the ears" to helm franchises, college franchisees are finding that ambition and effort, not candles on a birthday cake, determine success.

While practically everyone has heard of Subway, not many people know that its founder, Fred DeLuca, started the sandwich juggernaut as a 17-year-old college student in 1965. Nearly 40 years later, he's inspiring other young people to choose their own destinies. Working at the local Subway has become almost a rite of passage for teenagers, as it was for Jeff Smith back in 1994. He, like DeLuca, was 17 when he began his relationship with Subway-Smith worked there part time during high school and college before graduating to the next level at Subway: ownership.

Smith isn't the only early achiever looking beyond the corporate path. Brandon Gough, president of Juice It Up! Franchise Corp., notes a recent increase in younger applicants interested in the smoothie franchise. Gough says that while just "a handful" of the existing franchisees are college-aged, Juice It Up! is very receptive to taking on more youthful franchisees. "College students who don't have the business background to be successful on an independent level are able to take advantage of the opportunity that a franchise provides," he says.

For two years, Smith dedicated himself to sub sandwich artistry at the Subway in Cypress, California, before moving to the nearby Garden Grove location while attending college. But Smith realized a degree wasn't what he wanted. He was ready to start a career.

Idle chitchat with the Garden Grove franchisee led to bigger things when Smith said he was interested in purchasing a Subway. When that owner found out the Cypress franchisees wanted to sell their location, he told them of Smith's interest. "I was looking [for an opportunity], and this was the only job I had had in my life," says Smith, now 27. "It all just came together at that point."

Higher Power

If cramming for finals is the most pressing item on your agenda, don't automatically rule out becoming a franchisee. Gough explains, "For Juice It Up!, if franchisees have the financial capability and broad business experience, that's good. We don't expect any industry-specific experience." The most important factors for promising Juice It Up! candidates are the right background and attitude.

Gough says someone can learn how to manage the finances of a franchise like Juice It Up! without a business degree or an accounting background, but he recommends that franchisees have a legal representative as well as some kind of financial consultant or accountant. The biggest challenge for younger franchisees who don't have a lot of experience is working with employees. "Managing people is critical," says Gough.

Smith was only 21 when he purchased the Cypress location in 1998; he had his father and his father's wife sign on as partners, though he was the owner/operator. His father, who had recently retired as president of a shipping and transportation company, helped Smith handle the paperwork and some financial aspects of the business. "I was good at running the operations," says Smith, "but I wasn't educated in [those areas]. He made sure everything was in order."

While working at a location of the franchise you're interested in does provide experience, be cognizant of the increased responsibilities that await you as owner. When Smith first ran the store as an owner, he had to make a few adjustments since he no longer had a superior to turn to. "I had to take care of any situation that arose, from the time I opened to the time I closed," says Smith. That included the unpleasant task of firing employees. His Cypress location employed many people who were either relatives or friends with each other, and Smith himself had worked with some of them as an employee. Though he admits firing someone for the first time was strange, he says, "It didn't really bother me. I knew it had to be done."

While Smith's operational challenges have been minimal, the work hasn't. Smith, with his partners, purchased a second location in Orange, California, in 1999. He's since hired a manager for his Orange location, but still spends time at both locations seven days a week. And even in his off hours, Smith is on call. "When someone calls in sick and it's a Friday night, I can't go out. Sometimes you have to sacrifice."

And when it comes to vacationing, Smith warns other young, would-be franchisees, "It's definitely hard to do. You have to have people you can trust to take care of your business while you're gone. If something goes wrong, you need to have someone there who can handle it, or get back in time to take care of it."

And don't let your youthful appearance fool anyone. Advises Smith, "Be firm, and stand up for yourself, because people might try to walk all over you."

Winging It

Another franchise that welcomes the college-aged set actually originated from that demographic. Wing Zone, a takeout and delivery Buffalo wing chain, was started in the fraternity house kitchen of founders Matthew Friedman and Adam Scott. When he first arrived at the University of Florida in Gainesville, native New Yorker Friedman loved everything about the region but noticed one omission-Buffalo wings were nowhere to be found. "I felt chicken wings and college students were a perfect match, so I came up with a takeout and delivery restaurant primarily based around college markets," Friedman says.

Friedman, now 33, and Scott, now 31, got permission from their fraternity to use the house kitchen at night, installed a separate phone line, and began handing out menus around campus. For six weeks, the pair tested their concept and quickly realized they had hit on something. Says Friedman, "We were very fortunate to have immediate success for a lot of reasons. We were definitely undercapitalized and needed to do business right off the bat in order to pay bills."

As word spread, it became obvious the fraternity kitchen could no longer contain Wing Zone, so in 1993, with profits from the business and loans from their parents, Friedman and Scott opened the doors to their first restaurant. They also earned business degrees. Today, the company has more than 70 locations.

Though they faced challenges in starting the business, and Friedman and Scott's grades and personal lives may have suffered in the process, they believe college was the right time to take the leap. "Being young and starting a business, you don't have the pressures you do when you get older. You can survive a financial fall," Friedman explains. "If we had failed back in 1993, we would have recovered without a problem."