The stronger the economy, the more powerful the word "convenience." In our best economy in more than two decades, Americans are working longer hours to enjoy prosperity's perks. As a result, there's a scarcity of time to shop, cook, pick up dry cleaning or get much-needed oil changes for our cars.
It's no wonder, then, that smart franchisors are jumping on society's obsession with convenience by offering critical services to busy career-builders, senior citizens and anyone else who gets by with a little help from their service providers.
You may want to make a living by making consumers' lives easier, but is this actually an easy market for entrepreneurs to break into? To answer this question, you must understand the economics of the specific business in which you're interested. What's the ratio of the value of the convenience vs. your cost of delivering the convenience? "If you're delivering dinners, for example, how much extra will people pay to have dinners delivered, or how much of a discount can a restaurant afford to give you?" asks Erik Gordon, director of the Center for Retailing Education and Research at the University of Florida in Gainesville's Warrington College of Business Administration. "Some businesses have better scale economies than others, and mobile businesses sometimes are difficult to scale."
Equally important is knowing whether you have the skills to pull it off, says Jack Armstrong, president of the Franchise Network of New Jersey in Linden. Without question, plenty of opportunities exist in the service industry, but you have to do a little self-evaluating to figure out whether you possess the personal or business skills necessary to make it happen. "If it's a retail or food business, you have to be prepared to work seven days a week, plus long hours, during the start-up phase," says Armstrong. "You also have to enjoy working with people and be a good salesperson to boot. No matter how attractive the opportunity, you must first decide whether it's a business you'll really enjoy building."
Working It Out
The success of convenience-related franchises proves the demand is solid; however, actually getting the businesses off the ground takes hard work and serious thought. It took three years of trial-and-error testing, for example, for Yvette Gooch to get E Z Pantry started. The service, which allows customers to order groceries and have them delivered to their homes, recently sold its first franchise. "We had to work out the snags and develop a system that works," says Gooch, who runs E Z Pantry in Berlin, New Jersey, with her mother, Maria Solorzano. "That's why we waited a long time before franchising the concept."
Now virtually snag-free, E Z Pantry runs like clockwork: Customers choose their groceries from a printed catalog; employees enter orders into a computer; an employee assembles the orders; and, within 24 hours, drivers deliver the orders to customers (Tuesday through Friday) for a modest $5 fee.
Another problem was marketing the service and building clientele--Solorzano worked the phones religiously day and night. Again, the hard work paid off: The service now brings in $1 million-plus annually, and Gooch estimates that 70 percent of their customers (75 percent busy employees and 25 percent senior citizens) are repeat users. "Our business expands every day by word-of-mouth," says Gooch.
The 133 franchisees of Sudbury, Massachusetts-based Pressed4Time charm their customers by offering free alterations, shoe repair, and pickup and delivery of dry cleaning. "We've negotiated wholesale prices with local dry cleaners so our customers pay retail prices for the service," says CEO Kent Issenberg, who projects next year's systemwide revenues at $11.5 million, an increase over the current $10 million. "The vast majority of cleaners are working under capacity and had no objections to taking wholesale prices to increase their business." And Pressed4Time customers aren't complaining. "It's hard to beat this kind of deal," Issenberg adds.
Similarly, Oil Butler International Corp. franchisees lure customers with the unbeatable combination of convenience and savings. The mobile service offers customers quick oil changes and lube jobs; franchisees also rotate tires, change windshield wipers and check tire pressure at no extra cost. The Union, New Jersey-based franchisor has 137 franchisees nationwide, plus one company-owned location, and expects to sell between 100 and 400 franchises next year. According to founder Sam Casternovia, the company's grateful clientele includes not only busy professionals who gush over the convenience of having their oil changed in their company parking lots, but also owners of rental agencies and car and truck fleets.
Rich Dennis, 36, is a prime example of an Oil Butler success story. It took Dennis a full year to build a loyal clientele after purchasing his Bethlehem, Pennsylvania, Oil Butler franchise six years ago. Three years ago, he averaged about 30 oil changes a day; now he averages 40 to 50 a day with a full-time assistant and earns $25 per car.
Dennis, who expects sales of $180,000 by year-end and $220,000 next year, says a love of hard work and willingness to hustle are more important than your abilities as an auto mechanic. "Anyone can learn these basic skills," says Dennis, who previously ran a grocery/convenience store with his father.
Industry experience was also a nonissue for Bill Bailey, a former sales executive turned Pressed4Time franchisee. To jump on the convenience trend, you just have to be willing to put in the hours and labor to build a clientele, says Bailey, 43, who bought his Richmond, Virginia, franchise in January. Bailey, who expects to bring in $100,000 this year and nearly double that in 2000, is justifiably proud of the fact that he was profitable just three months after starting. "I believed in the concept," he says, "so it was a surprisingly easy sell because I'm persistent and passionate about selling."
Not So Fast
There is a downside to franchising's perfect fit with this convenience trend: More franchisors are entering the market for convenience-hungry consumers, making it tough to profit in certain types of businesses, says Gordon. "Even if a business has a magic word such as 'convenience,' this doesn't mean it's a winner," he explains. "There's nothing magical about a convenience business or a franchise. When you have a good match between the entrepreneur and the business, plus a strategic model that makes economic sense and is well-executed, nothing's more powerful."
While many franchisors are capitalizing on the convenience trend, Elaine Romanelli, associate professor of strategy and entrepreneurship at the McDonough School of Business at Georgetown University in Washington, DC, warns against franchisors that are "highly economy-dependent." "If and when the economy slows or takes a tumble, demand for these services will be one of the first things to decline," she says.
Finally, Romanelli warns that successful franchising of any sort of personal service business--including services such as house-painting, gardening and plumbing, in addition to more personal services--is one of the most difficult tricks to pull off. "Personal services can't be systemized in quite the way McDonald's or Mail Boxes Etc. can," she explains. "The quality of the personal service depends greatly on the competence, reliability and interpersonal skills of the individuals offering the service."
With that in mind, Gordon warns franchisees to be very careful before pursuing any trendy franchises. You'll need to determine whether the franchise will allow you to successfully offer a high level of personalized service. "Thorough research is absolutely critical," says Gordon. "The time to learn about its long-term prospects is before you reach for your checkbook."
For more detailed information on franchises that provide convenience services to consumers, visit Entrepreneur's Franchise Zone.
Bob Weinstein is the author of 10 books and is a frequent contributor to national magazines.
This story appears in the December 1999 issue of Entrepreneur. Subscribe »
