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All innovative entrepreneurs considering starting a business face a tough decision: Should you start your own company--becoming master of all business decisions and champion of personal destiny--or succumb to a franchise's rules, plans and, of course, royalties?
Marc Guttman has faced this very dilemma. He co-owns three Navis Logistics Network franchises in the Colorado area--two with his wife, Kathy, and one with his partner, Howard Feldstein. "We could have started our own business and become Marc and Kathy's Pack and Ship," says Guttman, 54. "But the concept of franchising was more appealing because I didn't know how to start a business. I just knew I wanted to do it."
Guttman found he didn't have to sacrifice his creativity to gain guidance when he heard a radio ad mentioning the sale of seats from the now-demolished Mile High Stadium, the former home of the Denver Broncos. He realized these seats would need to be packaged and delivered, and his company wound up being the exclusive shipping company for the project.
Guttman isn't the only example of this new breed of creative franchisees. Felix Mirando, 42, found his franchise system, Heavenly Ham, allowed flexibility when he developed the "box lunch," a ready-made lunch meal catering to nearby large corporations. "I recognized the potential for offering catered lunch packages," says Mirando.
So what's the downside of franchising? Royalty payments, both entrepreneurs agree. Royalties cut into your profits and usually come off the top. Guttman also cautions that franchisors "have the right to stick their nose in every part of [your] business."
Still, Guttman's Mile High triumph validates his decision to purchase a franchise. "I went to my franchisor and said, 'I've got this potential piece of business, and I need some help,'" says Guttman. "I could not have done that job without the help of the franchisor."