Behind every successful franchise concept is a successful franchiser. Is this obvious? Perhaps; but according to Karen Spencer, CEO and founder of Fran-Systems, a Marietta, Georgia, franchise consultant, it bears repeating. "Some people are a natural fit as franchisers, and some are not" says Spencer. Those who don't conform, she says, face the likelihood that their concept won't live up to its potential, unless the person or people at the top either acquire the necessary attributes, or step aside for others who already have them.
Spencer lists four traits she finds in franchise leaders who can hope to be masters in their field. First, she says, they need a certain level of financial capacity. At a minimum, franchisers need the wherewithal to fund the six-figure costs of preparing disclosure documents and operations manuals. "You really do have to have some money in the bank to get that started," she says.
"The second thing we're looking for in a master of franchising is the acumen level -- the skill level," Spencer adds. By that, she means both the ability and the inclination to teach and mentor other people. "Because that's, in essence, what you're doing with franchisees," she says.
Next, consider whether the franchiser displays a serious commitment to franchising. One indicator is whether the money to fund development of the concept is in the bank. Another is whether the franchiser has assembled a strong management group. "If they make the commitment to hire the team right out of the gate, that's a huge commitment," Spencer adds.
Last is a comprehensive yet elusive quality Spencer calls "culture." It's something of a combination of all the above, almost a feeling. When she finds a viable franchising culture, she says the rest of the requirements will naturally fall into place: the money will be raised, the necessary skills will be acquired and the capable executives will be hired. Indeed, culture is probably the most important single variable of all. "I'll take that above any of the rest," Spencer says.
When leaders of franchising businesses talk about what makes a viable opportunity, they tend to downplay their own personal characteristics, however. Instead, they want to highlight the markets, brands, products, services, and support systems they can provide.
When Jeff Thames talks with would-be business owners about picking a franchise concept, for instance, he tells them to choose an industry with growth potential. "After all, this is your livelihood," reminds Thames, the president and COO of franchise sales for Hastings, Minnesota-based Anytime Fitness. "You want to be in an industry that has the potential to support you and your family."
The fitness industry certainly has that, Thames notes. Even though medical experts, public health officials, insurers, and employers increasingly stress the importance of maintaining an active lifestyle, relatively few people belong to health clubs. As ever-larger numbers of people take up exercise, health franchisers stand to benefit enormously. "There are a lot of tailwinds in the fitness industry today," Thames says.
People deciding which club to join are drawn to Anytime Fitness's convenient locations. Potential franchisees are interested in participating in a growth industry with a concept that has a strongly increasing membership base -- now approaching 1 million people -- involves helping others, and enables many franchisees to indulge their personal passion for fitness and health.
The combination has led Anytime Fitness to open 1,334 facilities and an ongoing growth rate equivalent to opening approximately one new club every business day. Clubs already operate in five countries besides the U.S. and Canada, and in all 50 states. "We still have great expansion possibilities in the U.S. and Canada, but we're just scratching the surface internationally," Thames says.
Potential franchisees who like the idea of a business opportunity offering the rare combination of a well-established name and wide-open possibilities for opening new territories, are drawn to AlphaGraphics. Art Coley, vice president of global development for the Salt Lake City-based franchiser, says that although they have been around for 40 years and cover much of the United States as well as eight foreign countries, available territories exist in many states and major metropolitan areas. "We have a tremendous opportunity for growth," Coley says.
In addition to the prospect of enticing markets, franchisees are drawn to AlphaGraphics because it's a business-to-business concept. That means regular hours and the potential to reach seven-figure annual sales volumes with a single location. Customers, typically small businesses, come to AlphaGraphics not just for printing and document solutions, but increasingly for design, direct marketing, and digital marketing services that amount to providing an outsourced marketing department.
Today AlphaGraphics has nearly 300 business centers up and running and expects to add 30 more in the next 12 months. Coley says large domestic markets including Houston, Miami, Tampa, Orlando, Las Vegas, Washington, D.C., the San Francisco Bay area, and greater New York City all offer attractive opportunities for expansion.
The attraction of Coverall Health-Based Cleaning System resides in its low cost of entry and the fact that it operates in a huge industry -- commercial cleaning -- where most competitors are unsophisticated mom-and-pop operations. "It's an industry that hasn't seen a significant amount of change for 50 or even 100 years," adds Ted Elliott, president and CEO for the Boca Raton, Florida-based franchiser.
Coverall is out to end the lack of innovation, if nothing else. "What we've done is really get into R&D from the chemical and equipment side and put together what we call the Coverall Health-Based Cleaning System, a process that cleans at an unseen level as opposed to only an aesthetic level," says Elliott. While providing a powerful lure for consumers concerned about health issues, the approach doubles its leverage by also significantly improving franchisees' productivity, he adds.
Coverall has nearly 9,000 franchise owners globally and anticipates growth of approximately 400 this year, Elliott says. A focus for the next 12 months will be international expansion. "We just opened Qatar; we anticipate opening Sweden over the summer; and we really hope to get the U.K. open by the end of the year," he says.
