Buddy System

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6 min read

This story appears in the July 1996 issue of Entrepreneur. Subscribe »

New and inexperienced franchisees often feel lost or unsure when they're just starting out. To ease the anxiety, King of Prussia, Pennsylvania-based Maaco Auto Painting and Bodyworks has created an annual five-day convention where new franchisees pair up with veteran franchise owners to network and share ideas.

Lisa and Jeff Brennen, Maaco franchisees in Richmond, British Columbia, first met their "mentors" at last November's convention. Charlesan Neugebauer and Jan Marshall were very helpful, offering advice on subjects from financing to advertising, says Jeff. "Mentors have been franchisees for a minimum of five years," he explains. "They have a lot of experience they can pass on to someone who's just starting out."

Since its inception four years ago, the MaacoMentor program has become a vital element in integrating new owners into the Maaco system. "The new and established owners often stay in contact beyond the convention," says Bill Silverman of Maaco.

Jeff Brennen, who says the Mentor program goes far and beyond what he expected, hopes someday he, too, can become a mentor and offer insight to new franchisees. "[The mentoring relationship] gives you a sense of belonging," he says. "You feel that you're now part of the Maaco family."

Shining Example

Owning a franchise means working within a system-but sometimes a franchisee has to go beyond the expected and take a chance on a new idea. That's the lesson franchisee Phil Grossfield learned when a man who lived in a shelter for homeless people asked him for a job.

Grossfield, who owns two Big City Bagels franchises in Minneapolis and St. Paul, was leery at first, but after checking the man's references, decided to give him a chance. He's never regretted that decision. Far from it, in fact: Grossfield has since hired four employees from the Salvation Army's Harbor Light Center for homeless adults. One of those four, John Stokke, is being considered for an assistant manager position.

"I've had a real difficult time finding people who want to work and who show enthusiasm for the job," Grossfield says. "To find somebody who's down and out, who's looking for a job-these are people who really want to work, and it shows in their performance and their loyalty."

Loyalty works both ways for Grossfield: He plans to continue hiring Harbor Lights residents. "It's very rewarding," he says. "It's good for us, and it's good for them."

On The Rise

Franchising is fueling growth in the staffing industry-at least according to a recent survey by Los Altos, California-based Staffing Industry Analysts Inc. The results, which appeared in the company's Staffing Industry Report, revealed that the number of franchised and licensed offices in the staffing industry increased by 11.4 percent last year.

"This year, the office count was up significantly, which means franchisors were adding at a faster rate [than last year]," says Theresa Daly, an editor for the report. "It's a reflection of the overall health of the staffing industry."

Conducted since 1992, the annual survey monitors growth and franchising trends of staffing firms across the United States and Canada.

"Most franchise directors don't expect anything to slow down," says Daly. "The industry is growing in all directions."

'Net Sales

Franchisees and business opportunity owners looking to sell their existing units have a new way to spread the word to potential buyers. Franchise Solutions Information Services, a franchise consulting firm in Portsmouth, New Hampshire, has created the National Franchise and Business Re-Sale Network, a monthly for-sale listing that's posted on two Internet sites and circulated on paper to about 600 readers.

Listing your business costs $225 for the first three months. And you won't be bombarded with calls: Franchise Solutions protects the identities of the businesses, so you have control of contacting potential buyers. "We get pre-qualifying information [about buyers] and relay it to the [seller]," says Calvin Haskell Jr., president and CEO of Franchise Solutions. "It's then up to the franchisee to make contact."

The network, which started in January, currently has about 50 business listings; Haskell expects this number to double in the coming months.

And with thousands of franchise locations and business opportunities going on the market every year in the United States, the listing has the potential to grow even further.

For more information, visit one of Franchise Solutions' home pages at www.bluefin.net/~fransale.

Lending A Hand

Socially and economically disadvantaged individuals in Maryland who want to own a franchise but lack the necessary funds should contact the Maryland Small Business Development Financing Authority (MSBDFA). Since 1986, the government agency has provided about $2.8 million to help underprivileged people become franchisees through its Equity Participation Investment Program Franchising Component.

For a $50 fee, prospective loan recipients receive an application and suggestions on how to formulate a successful business plan. Once the application is completed and the business plan developed, both are sent, with a $100 application fee, to the MSBDFA. The fees are nonrefundable, and the entire process takes about two months.

"We're looking for individuals who have strong management capabilities, financial management and marketing strengths, and general 'relating to people' skills," says program manager Randy Croxton.

Those accepted to the loan program receive 45 percent or less of the total financing needed, to a maximum of $100,000.

For an application, call Croxton at (410) 333-4270.

Duke Of Oil

These days, a dollar usually won't get you very far. But if you're a Valvoline Instant Oil Change (VIOC) franchisee, for just a dollar per year you can lease up to $20,000 worth of lube equipment, including everything from compressors and oil guns to tanks and drain pans.

Although such leases are not uncommon in the industry, what sets Valvoline apart is the method of repayment. Some companies offer low-priced leases, but then increase the prices they charge franchisees for oil and lubricants. With Valvoline leases, says Jeff Malicote, manager of franchise sales, "We know we're going to be repaid through royalties and through a 15-year supply agreement with the [franchisee]," which is part of the leasing agreement.

Offered since VIOC began franchising in 1988, the lease option has garnered a positive response from franchisees-more than 95 percent currently lease equipment. Says Malicote, "Anyone qualified to become a franchisee is qualified to fit into this program."

Small Fries

Holly Celeste Fisk

When Julian S. Garza realized his employees were having problems juggling work and child care, he did what any boss would do: He bought a day-care center. Garza subsidizes the costs of child care at the center for parents who work at any of his four McDonald's restaurants in the Albuquerque, New Mexico, area. "Many parents would like to work but for the fact that they have little ones at home," says Garza. His employees pay about 89 cents an hour, compared with more than $2 for nonemployees. So far, eight children of McDonald's employees are cared for there; Garza expects that number to increase as he incorporates the child-care subsidy into his recruitment efforts.

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