O, Pioneers! 40 companies that helped define franchising success.
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Like the wild west, franchising has a hearty share of pioneers: entrepreneurial companies that have broken ground in their industries, claimed impressive territories, lassoed lots of consumers and, most important, survived the onslaught of competitors.
But don't mistake these companies for old-timers content to sit back and reminisce about the early days of franchising. These pioneers are constantly seeking innovative ways to improve their systems and meet consumer demand as they face the new millennium.
As a result of their steadfastness, these franchises have become household names not only among consumers but also with prospective franchisees seeking a tried-and-true trail to success. To introduce you to these grandfathers of franchising, Entrepreneur has compiled the following listing of 40 companies that have been franchising since 1963.
This listing is not intended to endorse, promote or recommend any particular company. When considering buying a franchise, you must conduct your own independent investigation by reading its Uniform Franchise Offering Circular, visiting the locations of existing franchisees, and enlisting the help of an attorney and CPA to review the company's legal documents.
Once you've researched the franchise opportunity thoroughly, you have a much better chance of conquering a territory of your own . . . and riding happily into the sunset.
See the 40 successful franchise companies in our Pioneer Table Listing.
Time To Grow
A lot has changed since TacoTime International Inc.'sfounder, Ron Fraedrick, mortgaged his home in 1960 to come up withthe $5,000 he needed to launch the Eugene, Oregon-based franchise."Nobody really knew what franchising was then," says headof international development John Shickich of TacoTime's earlydays. "It was a bunch of entrepreneurs feeling their waythrough a new way of growing a concept."
Today, TacoTime's original franchise agreements, shortenough to be written on a napkin, have expanded to numerous pagesthat rest in the hands of approximately 330 franchisees. But evenwithin a more complicated regulatory framework, the essence of thefranchising model has remained intact, says Shickich. "Thecore element of [taking] a perfected concept and teaching peoplehow to do it still works." In 1997, it worked to the tune of$110 million in gross sales.
Over the years, technology has brought about some of the biggestchanges. "We try to innovate through technology to lower ourcosts and reduce the risk of foodborne illness," saysShickich. "One of the things we're noticing is every timewe make a significant technological change, it helps reduce costsand improve sales."
When TacoTime started out, its primary means of marketing wasthrough individual stores. Today, the franchisor's marketinghas expanded to include co-op advertising with TacoTime'scorporate stores and franchise outlets. "There's a synergythere," says Shickich. "You get a lot more bang for yourbuck."
Shickich believes all of franchising's rules and regulationsmay actually provide a bonus to franchisors. "It's verypositive in that [the law] requires you to disclose key informationabout who you are and what you do," he says. "It'sgood for franchisors to [review that information] regularly andlook at the business they're in and what they'redoing."
The wave of TacoTime's future? Expanding beyondAmerica's borders. Says Shickich, "It's a greatbenefit to go overseas, but it brings a host of challenges,"challenges the company is meeting head-on in such locations asAsia, the Middle East, Europe and Canada.
Driven To Succeed
In 1959, when most auto repair shops were still offering a broadvariety of services, Anthony A. Martino opened a shop thatspecialized in automatic transmissions, dubbing it AAMCOTransmissions (an acronym for his name). The shop's first yearin business proved to be an overwhelming success, and the BalaCynwyd, Pennsylvania, company began franchising in 1962. Some 18million transmissions later, "[The automotive servicesindustry is] very specialized," says AAMCO's vicepresident of franchise development Jack Wilki. "Brake,fast-tune and muffler specialists work in each other's favorbecause consumers are now used to going to specialty franchises forservice."
In the 1960s, says Wilki, investors were buying AAMCO franchisesbecause they offered a proven system and training that wouldprovide extensive support. The resulting benefit for today'sapproximately 710 AAMCO franchisees? "Our name recognition inAmerica today is 93 percent," says Wilki. "We'vespent probably half a billion dollars on TV and radio advertisingalone"--much of it as pioneers in the use of celebrityspokespeople and athletes.
Even with AAMCO's estimated systemwide sales of $450 millionin 1997, it takes more than a big name to bring customers back yearafter year. "Training is incredibly important," saysWilki. "Over the years, we've learned what works and whatdoesn't and how best to teach it to franchisees and theirstaffs."
Perhaps the biggest key to AAMCO's franchising success,however, is building relationships between the franchisor and itsfranchisees. "Relationships were always important," saysWilki, "but today we're realizing that when a franchiseecomes into the system, he brings a lot to the party."
Technology also rates high in AAMCO's overall scheme,allowing the franchisor to communicate more efficiently withfranchisees and provide valuable support to AAMCO dealersthroughout the chain. And AAMCO's evolution continues, saysWilki. "I don't think we've explored all theoptions," he says. "We're always trying to better ourpersonal best
Contact Sources
AAMCO Transmissions Inc., (800) 292-8500, http://www.aamco.com
TacoTime, 3880 W. 11th Ave., Eugene, OR 97402,(800) 547-8907
Listing compiled by Liza Potter