Taking Flight

Chicken empire conquers new ground.
Magazine Contributor
7 min read

This story appears in the March 1998 issue of Entrepreneur. Subscribe »

Atlanta-based AFC Enterprises Inc., parent company of Churchs Chicken and Popeye's Chicken & Biscuits, has big plans for the new millennium. Already a giant in the domestic and international fast-food industries, AFC plans to further diversify its holdings. With last year's acquisition of Chesapeake Bagel Bakery, AFC now has more than 2,600 restaurants worldwide with sales in excess of $1.5 billion.

Seeking to add more value to the company, AFC has earmarked $100 million to acquire food-service brands in the sandwich, pizza, coffee and Italian cuisine markets. In the future, AFC plans to conquer nonfood franchise concepts, such as automotive maintenance and business services. In addition, the company has become a corporate sponsor of Habitat for Humanity, donating 180,000 man- hours and $2 million toward home construction in the United States and overseas.

The company's vigor is fairly remarkable considering that as recently as 1992, both chicken chains were bankrupt. AFC bought them from their parent company and brought in new staff to reorganize operations and design an image-enhancement program. A year later, the chains were not only out of bankruptcy but had grown by 77 restaurants.

Picture Perfect

A creative take on franchising.

By Elaine W. Teague

It was the early '70s when Linda Perlmutter made the transition from art supervisor for New York City Public Schools to stay-at-home mom. She now had a schedule flexible enough to continue her love of teaching art--this time in her own home studio.

From those humble beginnings came Odyssey Art Centers, now in its third year, a fine arts education franchise offering art history-based creative expression and art skills for children and adults. And what began in Perlmutter's home is now offered in several East Coast home studios.

In contrast to a crafts-type curriculum, says Perlmutter, "it's a learning center." A four-week summer program and three 10-week sessions are held yearly, each year featuring a theme (such as Greek art) with specific media (such as clay) used in each session.

And here's a tip for potential franchisees: Keep a travel bag packed, thanks to the new Art at Sea program. "We've been asked by a major cruise line to teach [classes onboard]," says Perlmutter, "but we don't have enough teachers to fill their needs."

Silver Lining

Businesses get a boost after disaster strikes.

By Natasha Emmons

Hurricane Andrew dealt a devastating blow to South Dade County, Florida, businesses when it ripped through the area in 1992. But there's a silver lining: Part of an $850,000 grant from the federal Hurricane Andrew Recovery and Rebuilding Fund is being doled out as five individual $75,000 awards to African-American entrepreneurs who want to open a business.

Ribbons have already been cut on a Jackson Hewitt Tax Service, an Almost Heaven hot tub store, and an Ace America's Cash Express check cashing and financial services operation. A Denny's restaurant and a Texaco are in the works, according to Ed Brown, franchise development director for the program's administrator, the Metro-Miami Action Plan (MMAP) Trust.

The advocacy group says African-American-owned businesses are typically less likely to reopen than others hit by the storm because of their size, lack of funds and lack of insurance. The program was tailored to franchises because they offer a proven product and support services.

The rest of the grant money goes toward a youth entrepreneurial training program. "We want to show them [they should aspire to be] honest, hard-working people," Brown says.

Brown looks to grow MMAP into a clearinghouse for African-American business opportunities in the Miami area and hopes it will be a model for African-American business groups nationwide. For more information, call (305) 252-5815

Piping Hot

"Underground" franchise heats up.

By Elaine W. Teague

You could call them pipeline detectives. Hydro Physics Pipe Inspection Corp. franchisees venture 20 feet beneath the surface of concrete or earth, using underground video technology. Their mission? To identify problems in commercial, residential and industrial pipelines.

Video inspection has long been used by government agencies for large, municipal-sized pipes. Now, Hydro Physics, based in Englewood, Colorado, has carved a niche out of smaller, 3-inch to 6-inch pipes.

The company doesn't sell or repair piping systems, which means purely objective appraisals for its customers. "My inspection [simply] confirms the problem and shows the customer what needs to be done to correct it," says franchisee John Richmond of Pleasant Valley, Missouri. Customers can observe the inspection process, and receive the revealing videotape and pipe analysis on the spot.

Surprisingly, local plumbing contractors pose no competition for franchisees. To the contrary, plumbers often come to Hydro Physics to take the guesswork out of their own troubleshooting process, thus eliminating costly, unnecessary digging.

A background in the pipeline industry isn't required. At the Hydro Physics training facility, practice pipeline setups mimic specific problems. As a result of the training, says Richmond, whose background is in food processing, "I had no problem transitioning to this field."

Two's Company

Franchises who do the math just add one.

By Elaine W. Teague

Adding a new business to your existing site may be easier than you think. As dual-concept franchising continues to flourish across the country, business owners are inventing winning business combinations and putting them under the same roof or side by side.

Pizzas of Eight, a business opportunity based in St. Louis, offers its flexible pizza program to a variety of businesses, including bowling centers, convenience stores, amusement centers and, recently, hotels. "It helps to create a profit center and also generates interest and additional foot traffic for the core business," says Abe Smith of Pizzas of Eight.

Over the past year, Houston-area World Gym Family Fitness Center franchisees Dan and Sherry Granader have established Smoothie King franchises near two of their fitness centers--and one inside their gym. "Smoothie King is a simple operation [to add on]," says Sherry.

It's not really a hard sell, either. Picture this: You're finishing your fitness workout, and you spot the inviting juice bar business across the gym, just beyond the glass wall. You watch as another customer downs a thirst-quenching fruit smoothie. As your workout ends, you know your next move.

On the flip side, Smoothie King customers can easily glance into the glass-enclosed gym. With free workout passes at the juice bar's cash registers, a tour of the fitness center can result in a new World Gym membership.

"It's been a win-win situation," says Sherry. To join the sizzle, put on your matchmaking hat and determine the right business combination for you.

What's New

  • In November, Denver-based Quizno's Corp. purchased Philadelphia-based Bain's Deli, a sandwich chain that operates mainly in mall food courts. The existing 63 outlets have the option to be converted to Quizno's, and Bain's Franchise Associates will have the rights to develop Quizno's in part of the Philadelphia area.
  • Disproving the idea that water and oil don't mix, Leesburg, Virginia-based Precision Tune Auto Care (PTAC) Inc. recently introduced two new franchises: Precision Auto Wash and Precision Lube Express. The outlets are designed to be operated individually, together or as PTAC add-ons.
  • In a recent move likely to increase exposure and expansion, Virginia Beach, Virginia-based Jackson Hewitt Inc. was purchased by Parsippany, New Jersey-based Cendant Corp., parent company of Century 21, Coldwell Banker and several other real estate and travel-related businesses.

Contact Sources

AFC Enterprises, 6 Concourse Pkwy., Atlanta, GA 30328-5352, (800) 848-8248, (770) 353-3032

Cendant Corp., (973) 496-8414, fax: (973) 496-7604

Hydro Physics Pipe Inspection Corp., (816) 792-9779, jprapr@qni.com

Hydro Physics Pipe Inspection Corp.(headquarters), 1855 W. Union Ave., Unit N, Englewood, CO 80110, (800) 781-3164

Odyssey Art Center, P.O. Box 512, Tarrytown, NY 10591, http://www.odyssey.com

Pizzas of Eight, 11800 Borman Dr., St. Louis, MO 63146, (800) 422-2901

Precision Auto Care Inc., (800) 438-8863, http://www.precisionac.com

Quizno's Corp., 1099 18th St., #2850, Denver, CO 80202, (303) 291-0999

World Gym Family Fitness Centers, 17223 Mercury Dr., Houston, TX 77058, (281) 286-2951, ext. 22

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