Families start their own business legacies through FranNet

Family-owned businesses are part of America’s fabric, and FranNet is happy to help make them a reality.

Many entrepreneurs who set out to launch their own careers hope to eventually bring their children into the business. Of the tens of thousands of franchisees that FranNet has helped get started, about one in four have involved people who wanted to run a family business or hire their children. We help about 100 family businesses get off the ground every year.

“Are there four better words than ‘family owned and operated?’” says FranNet President and COO Jania Bailey. “It’s wonderful for people to be able to work alongside their family members and share in one another’s success.”

It’s an especially good tool now.

The still-staggering economy has made it hard for young adults to find jobs — the unemployment rate for those 24 and younger was 16.7 percent in November, according to The Wall Street Journal. The recession also cost a lot of skilled managers and executives their corporate positions, making franchising an attractive solution for both generations.

We recently profiled four families who started businesses with FranNet’s help and are now creating their own financial successes: A father-son team that runs a child education franchise in Nashville; a son whose parents helped him open a custom T-shirt franchise in Marietta, Ga.; a husband-wife team that owns a T-shirt franchise in Snellville, Ga.; and a corporate retiree who now owns a leather and upholstery repair shop with his son in Milledgeville, Ga.

FranNet consultants can help families identify businesses that match their skills and passions and can provide guidance to help ensure their franchises succeed.

For Diane Langford of Macomb, MI, it turned out to be a home improvement franchise that their 25-year-old son Randy operates. Like a lot of other young adults, his employment prospects had been grim.

“We still have 10 to 15 years of working left and our son, who recently graduated with a history degree, had few career options,” Langford says. “Buying a franchise gave us a less risky way to start a family business and allowed us to help our son.”

Randy is his own boss, and his parents have a second source of income thanks to the business.

We have 25 years years worth of these success stories to share. If you’d like to hear how we can help your family, see www.frannet.com.

Massaging the deal to build a franchise

Mary Teresa Bitti  Jan 23, 2012 – 12:53 PM ET

Massage Addict founders Lori MacKenzie and Chris Harker

The pitch: Accessible, affordable massage therapy. That is the concept behind Halifax-based Massage Addict, the latest venture for Lori MacKenzie, owner and president of the company. She hit on the idea when she injured her back a few years ago. “I was seeing a massage therapist a couple of times a month and it became very expensive. I remember thinking, surely if the therapist knew I was coming in for treatments so often they could afford to charge me less.”

A commitment to regular visits at a discounted rate is proving to be an attractive differentiator for the membership-based clinic. Becoming a member at Massage Addict requires clients to commit to one treatment a month at a cost of $59 a treatment, significantly less than $70 to $90 fees being charged by Massage Addict’s competitors, Ms.MacKenzie says. Depending on the clinic, there are anywhere from 13 to 15 therapists on site. “It’s easy to get appointments, even same-day appointments,” she notes.

After launching the business in 2008, Ms. MacKenzie quickly realized she had a recession-proof business model. And that, she says, is largely because 80% of Massage Addict’s members have health-care benefits that cover massage therapy. The demand has been strong from Day 1.

“I had just opened my first clinic in Dartmouth, N.S., and someone came in and assumed it was a franchise and approached me about opening another location in Halifax,” says Ms. MacKenzie, who was a multi-unit owner of a fitness franchise for seven years before launching Massage Addict. “I went through the steps to franchise it and here we are. We now have six locations in Nova Scotia and two in Ontario.”

The franchise fee is $39,000 plus a 5% royalty. “Getting a location up and running costs between $100,000 and $200,000 depending on the area and the lease you are able to negotiate on office space. And we help you with all that,” Ms. MacKenzie says. “We want to be within 10 minutes’ drive of people’s homes.

“We perfected the model in Atlantic Canada and now we are rolling out across Ontario. It’s definitely going to be a national brand but right now we are focusing on Ontario,” says Ms. MacKenzie who is scouting out locations in Ottawa, Vaughan, Richmond Hill and Mississauga.

Ms. MacKenzie and Chris Harker, chief operating officer of Massage Addict, approached the dragons to help bring the brand to the next level quicker. “The exposure the dragons offer was something we just couldn’t pass up,” Ms. MacKenzie says.

The deal: She asked for $125,000 for a 10% stake, valuing the company at $1.25-million. That valuation was based on strong sales and a proven business model and four of the dragons’ jumped on the opportunity to get on board. Jim Treliving was the first to make an offer: $125,000 for a 20% and his franchising expertise set him apart. “When we were standing there it was very exciting to have all those offers coming in, but we just knew that Jim was more the direction we wanted to take it,” Ms. MacKenzie says. “He could see what the model was and he seemed to really get it.” But as is often the case, things can change after taping. “As a direct result of our experience on the Den, we were able to structure an even stronger deal with an outside investor but we are not ruling out any future deal with dragons,” Ms. MacKenzie says. At the time of writing, Mr. Treliving was unavailable for comment.

The expert’s opinion: John Cho, partner in Transaction Services at KPMG Enterprise likes the model and the deal. “It’s an on-trend niche. The aging demographic will help drive demand and even if you’re employed with a plan, massage therapy often isn’t fully covered and these prices are very attractive. I like that she’s targeting small towns and suburbs and locating in strip plazas. The lease rates are more attractive and she’s close to her customer base. This is the type of service that will translate into any geographic area and the franchising model is a good idea.”

On franchising: “Franchising a business model successfully really comes down to systems, systems, systems,” says Gary Prenevost, president of FranNet of Southern Ontario. “The vast majority of franchise systems fail because they didn’t build the correct infrastructure to support their growth. It’s one thing to have a location that’s going well but to be able to duplicate it again and again you need to grow the support in terms of people, point of sale, IT and marketing. It can’t be a myopic view. A lot of franchisors grow their staff after they have a certain number of franchisees. But my position is hire staff, build capacity, service your franchisees so that they can get up and running fast and effectively.”

FranNet of San Francisco President Gordon Dupries. From FranNet website.

In franchising, trends are coalescing to form what could be the next large-scale movement in the industry: absentee ownership of franchises. Or, as franchise owners themselves call it, “manager-run franchises.”

The developments:

• Skilled, experienced professionals are leaving the corporate world and often turning to franchising to make a living.
• The economy is still bad, and Social Security and retirement funds look shakier than ever, so people are trying to shore up their economic futures as much as they can by changing what they invest in.
• The franchising industry is yielding more and more relatively inexpensive, service-oriented franchises that don’t require an owner to run the business every minute of every day and thanks to the sagging job market, there are quality hires to help manage franchised businesses.
• Prospective business owners can tap into retirement funds for start-up capital that was once unavailable to them and 401k rollovers to finance franchise startups are now one of the most common funding sources.

It all adds up to people who already have jobs pursuing franchise ownership as an additional source of revenue that doesn’t require full-time time investment. And these owners aren’t necessarily gravitating to food concepts, either; they’re exploring the full spectrum of service-based and lower-investment franchises, including child services, day spas, hair care and restoration businesses.

“Because a lot of the people we work with are corporate veterans, they understand how to manage employees by delegating responsibility. For some of our clients, that comes as second nature,” says Jania Bailey, FranNet’s president and chief operating officer. “So it makes sense that they’d want to buy franchises but not necessarily have a hand in every aspect of the business’ day-to-day operation. And that’s fine. You don’t have to do that to be a successful franchise owner.”

When you hear “absentee owner,” the image of a venture capitalist in a three-piece suit might enter your head, but the reality doesn’t match the stereotype. Recently, FranNet of San Francisco President Gordon Dupries closed a pair of multi-unit massage business deals with highly educated Bay Area women with corporate experience and young children.

They told Dupries they were interested in home-based franchises they thought would give them the flexibility to work while taking care of their kids. Dupries told them even home-based businesses would require them to leave the house to meet with clients and spend plenty of time on the phone — not exactly what they were looking for. Dupries suggested they buy massage franchises they could hire managers to run. That’s what both clients did.

“Clients ask me if it’s possible to own a franchise business, or more than one, while holding down a full-time job,” Dupries says. “I tell them, ‘It’s not easy, and don’t think for a moment that you won’t be involved at all, but yes, it is doable.’”

One of the clients, he said, has an MBA from Harvard — demonstrating the education level of people attracted to franchising these days. “If she can’t do it,” Dupries says, “we’d better all hang up our spurs.”

For nearly 25 years, FranNet, based in Louisville, Ky., has been one of North America’s leaders in matching franchisees with franchise companies. FranNet consultants use a specific profiling and consultative process to determine a business model unique to each client’s goals, skill sets and interests, and have matched thousands of happy entrepreneurs to rewarding small business opportunities. If you think you’re interested in a manager-run or any other kind of franchise opportunity, see www.frannet.com.

These days, only the strong survive in the world of franchising. Some franchises that were promised to be successes have now shut their doors and some surprising ones are still thriving. When getting into the business of franchises, how do you know which direction to take? People like Todd Bingham at FranNet have watched the trends and have a good read on where certain companies are heading. Bingham recently offered his expertise in the Entrepreneur. Read more in the article below.

Photo: Alex E. Proimos on Flickr

Veterans looking to start their own business may get a big assist from the United States Senate, which is considering a bipartisan bill that would provide tax rebates to veterans who become franchisees.

The American Growth, Recovery, Empowerment and Entrepreneurship Act is cosponsored by Sens. Marco Rubio, R-Fla, and Chris Coons, D-Del., who introduced the legislation in November. The bill proposes to give veterans a 25 percent tax rebate on the cost of franchise fees, up to $100,000.

“The AGREE Act is a meaningful step to find common ground and create a better environment for job creators to start businesses or expand existing ones,” Rubio said in announcing the legislation.

A report by the International Franchise Association shows that for every $1 million of lending obtained by a franchised business, more than 34 jobs are created. The IFA and other organizations are lobbying Congress to help entrepreneurs create jobs for themselves and others by making it easier to borrow the money they need to start and operate a franchise.

The help would come at the same time that federal agencies are aggressively trying to send more of contracting dollars to veteran-owned small businesses. Executive Order 13360, signed by President George W. Bush, directed all federal agencies to send at least 3 percent of their contracting dollars to businesses owned by service-disabled veterans.

“Now is an excellent time for veterans to use the skills they’ve acquired and open new franchised businesses,” said Jania Bailey, COO of FranNet, a national franchise consulting firm. “These incentives make a franchise purchase much easier for veterans.”

With government contracting adding up to more than $425 billion a year, that means there is $12.5 billion that the government is eager to send to veteran-owned businesses.

The U.S. General Services Administration notes, though, that agencies have fallen far short of the 3 percent goal — largely due to the lack of identified veteran-owned small businesses in the marketplace.

The tax rebate on franchise fees would give service members an ideal way to start businesses that already have a proven business model — many of which are well-suited for government contracting work. FranNet can help veterans identify the opportunities.

The AGREE Act also reflects a growing realization in Congress that if the economy is going to regain its strength, something needs to be done to free up money to start franchises and other small businesses. Small businesses have accounted for 65 percent of new jobs over the past 17 years, according to the Small Business Administration.

Want to learn more about the wide range of franchise opportunities available for returning veterans? Schedule a meeting with a FranNet consultant. The advice and guidance is free and may help you start the next productive chapter of your career.

Our blog last week about the promising future of franchising despite a recession proves to be a topic people are talking about. Last week, Business Reel featured our post about IFA’s economic outlook for 2012 which showed a tremendous spike in franchising growth patterns. To see the placement, click here.

Jania Bailey, President and COO of FranNet.

Franchising keeps creating jobs and new business opportunities every year, even in the depths of a recession. Why is that?

Part of the reason: Professionals realize the diversity of opportunity franchising provides, in traditional food franchising or service franchises that meet the growing needs of demographics like the baby boomers, who are only now entering retirement age.

People understand that corporate jobs aren’t as secure or lucrative as they used to be. Since the economic collapse of 2008, professionals have turned more and more to franchising as a way to control their careers and build long-term futures for themselves and their families, options that don’t have to depend on a giant corporation’s stability or government largesse.

The recent Franchise Business Economic Outlook for 2012, prepared for the International Franchise Association by IHS Global Insight, pinpoints in their projections where they expect the growth to occur — and the franchise experts at FranNet, the international network of franchise consultants, are well-positioned to analyze what the numbers mean.

“The IFA report projects strong growth in the personal services and retail products and services segments, which we’ve seen ourselves in the last several years,” says Jania Bailey, FranNet’s president and COO. “People new to the franchising world are usually surprised to find out how many different kinds of franchises are out there, from child education to senior care to car maintenance — and market demand is growing for all of them.”

A closer look at some of the report’s numbers:

• It projects the number of U.S. franchise establishments to increase by 13,928, and for the number of jobs to grow by about 168,000. “At a time when most of the private sector remains stagnant,” Bailey says, “that’s impressive growth.”
• Franchising’s economic output is expected to grow by 5 percent, from $745 billion to $782 billion. “What’s good for franchising is good for the economy,” Bailey says. “Every new franchise creates an average of 10 jobs, and franchising in general is a reliable engine for economic growth.”
• Among franchise segments, the report predicts strongest economic output increases from personal services (6.2 percent increase) and retail products and services (6.1 percent), and business services the highest in projected job growth at 3.6 percent. “Business-to-business franchises are doing very well as businesses adopt leaner, more cost-effective operations and outsource some of their internal services,” Bailey says.
• If anything is holding the industry back from truly outstanding growth, it’s lack of access to credit. The report shows that more than 80 percent of franchisors and more than half of franchisees say limited access to credit continues to impair their ability to expand. “At FranNet, we’ve been advocating hard for banks to loosen credit restrictions to give entrepreneurs a chance to create new businesses and boost the economy at the same time,” Bailey says. “We match clients to the franchise businesses that fit their interests and goals, so they have excellent chances to succeed if they only had access to capital.”

For nearly 25 years, FranNet, based in Louisville, Ky., has been one of North America’s leaders in matching franchisees with franchise companies. FranNet consultants use a specific profiling and consultative process to determine a business model unique to each client’s goals, skill sets and interests, and have matched thousands of happy entrepreneurs to rewarding small business opportunities.

With national unemployment still hovering around 9 percent and “job creation” the term on every politician’s lips, you’d think employed North Americans would be happy to just have jobs — and you’d be wrong.

A recent survey by Right Management, a Philadelphia talent and career management firm, yielded some astonishing results: For the second year in a row, 84 percent of more than 1,000 employees surveyed said they plan to look for other jobs in 2012. The percentage of workers who said they intended to stay in their jobs remained steady, too — at a shocking 5 percent.

Those data take on even more meaning when you consider that huge numbers of Americans, even with the economy in the shape it’s in, are actually quitting their jobs. Nearly 2 million voluntarily quit in May 2011, up 35 percent from January 2010, according to the U.S. Bureau of Labor Statistics.

Voluntarily quit, often without another job lined up.

So what’s going on?

One explanation: Professionals are simply getting tired of the corporate job treadmill, with its rigidity and limited opportunities for advancement, and turning to self-employment through franchising as a way to seize control of their careers and financial futures.

Even in the midst of a recession, the franchising industry has grown at an impressive pace, adding 19,000 units in 2011 and continued growth projected into 2012. The diversity of franchise opportunities continues to grow, too; the industry is adding low-cost, service-oriented businesses to its roster of traditional food franchises.

“In the last couple of years, we’ve helped thousands of professionals burned out from the corporate grind reinvent themselves as entrepreneurs through franchising,” says Jania Bailey, the president and COO at FranNet, an international network of franchise consultants. “The opportunities in the franchising industry are more extensive than ever, and the Right Management survey results and BLS statistics just show that American workers crave the kind of control and growth opportunities franchising offers.”

Right Management surveyed 1,077 American and Canadian employees online from Oct. 15 to Nov. 15. The firm concluded that employees distrust management in their jobs and believe they lack options. Many franchisees cite the freedom of self-employment and the scalability of their businesses as advantages.

“We find over and over that once smart, driven professionals take the plunge into entrepreneurship,” Bailey says, “they never want to go back to working for someone else.”

For more information about franchise opportunities and FranNet’s free services, see www.frannet.com.

FranNet President and COO Jania Bailey.

The American franchise industry expects to add nearly 14,000 establishments and 168,000 new jobs in 2012 — the latest indication that American franchising is healthy and growing, even in a sluggish economy.

The news comes from a recent report from IHS Global Insight for the International Franchise Association that predicts growth across the franchise industry in number of establishments, employment, economic output and contributions to U.S. gross domestic product.

The 2012 Franchise Business Economic Outlook projects that the franchise industry will add nearly 14,000 establishments in 2012, an increase of 1.9 percent; and 168,000 jobs, an increase of 2.1 percent. The report also projects 5 percent growth in economic output, from $745 billion to $782 billion; and a 5 percent increase in growth of GDP originating in the franchise sector, from $439 billion to $460 billion.

So why is franchising growing when the rest of the economy remains stagnant?

A lot of it involves a change in the way professionals see their careers. Corporate jobs aren’t as secure or lucrative as they were five years ago, and plenty of corporate veterans have turned to franchising as a way to build secure futures and control their careers after losing or walking away from their corporate jobs.

“The growth figures square with what we’ve seen at FranNet in recent years: People leaving or being forced from their corporate jobs and finding new opportunities in franchising,” says Jania Bailey, the president and COO of FranNet, the international network of franchise consultants. “With each passing year, more and more professionals discover how diverse and affordable the franchising industry is.”

FranNet has grown extensively in recent years as professionals have flocked to franchising; in 2011, American entrepreneurs have opened more than 19,000 new franchise businesses, and FranNet experienced a record year, capped by its inclusion in Inc. magazine’s list of the fastest-growing U.S. companies.

“We’re seeing franchising opportunities open up that would have been unimaginable a few years ago,” Bailey says. “With the economic climate and the projected growth in the industry, there’s never been a better time to explore franchise opportunities.”

For nearly 25 years, FranNet, based in Louisville, Ky., has been one of North America’s leaders in matching franchisees with franchise companies. FranNet consultants use a specific profiling and consultative process to determine a business model unique to each client’s goals, skill sets and interests, and have matched thousands of happy entrepreneurs to rewarding small business opportunities.

Michael Sipe

Michael Sipe, an investment banker, entrepreneur and business consultant, worked with FranNet consultants on small business development projects in California and the Pacific Northwest for 20 years. In July, he decided to become a FranNet consultant himself, purchasing the FranNet territory covering Idaho, central and eastern Oregon and eastern Washington state.
The 56-year-old Arizona native also is president and founder of CrossPointe Capital, a mergers, acquisitions and business development firm that helps owners of small and mid-sized businesses with business purchases, sales and transfers. Over his career, he’s worked in civil engineering, publishing, multimedia production, direct sales and other fields — ideal training for a small business consultant responsible for guiding the career paths of other professionals. He’s also active in church and civic organizations in Bend, Ore., where he’s lived for eight years after moving from the Silicon Valley in California.

What’s your professional background?
I’ve worked in civil engineering, publishing, computer simulation, multimedia production, direct sales, business consulting, training and education, manufacturing, retail, real estate – you name it. I’ve started several companies of my own, so entrepreneurship is familiar to me. In the process of buying and selling my own companies, I noticed a lack of a well-developed market for consulting services for small- and mid-sized companies to address ownership transfer issues, which can be very tricky and complex. I founded CrossPointe to help remedy that problem. Over the years, I’ve been involved in numerous professional associations for CEOs and business leaders.

How did you get into franchising? Why FranNet?
I began helping people buy, sell and start businesses around 1991, when I was living and working in the Silicon Valley, so naturally I found myself working a lot with Joan Young, who’s the FranNet consultant for the Bay Area. I always admired the work Joan and FranNet did to help people find new, fulfilling career paths through franchise business ownership and recently decided this was the right path for me at this time. What I see now in the demographics is a huge opportunity to serve baby boomers with franchises — to help middle-aged, high-quality executives who have either sold their businesses or left their corporate jobs involuntarily and have to figure out how to make a living at the standard they’re used to in an economy that’s radically changed. We can help them build some equity, get some cash flow and enable them to control their own financial futures. That’s why I think franchising is the perfect business for me to be in right now.

What are some of the best franchise opportunities in your territory?
One is senior care, of course, because many of these areas are popular for retirees. Also, fitness, wellness and health franchises are very strong in these markets. In general, the fitness quotient of people in these areas is very high. We’ve got a lot of athletes, and plenty of people move to these areas because they love sports. We have a gym franchise that is very strong in Bend, and a therapeutic spa business we represent will be fantastic in all these communities. Education franchises and businesses that relate to kids are very strong because people in these communities tend to be very pro-education.

Do people still have preconceptions about franchising? How do you educate them about the diversity?
They do, but I find that more and more people are realizing how much diversity there is in franchising. The first thing to do is to acknowledge is that people do think of restaurants when they think of franchising. Although they certainly are very viable businesses, for our primary candidates those franchises are too expensive. The challenge is to provide an affordable path to business ownership. Some of our lowest-dollar investments produce the highest return on investment. There are about 3,000 different kinds of franchises, from business services to personal services to pet services. Just about any kind of business people can make money at is franchised.

What advice would you give someone thinking about buying a franchise business?
Anyone who wants to get into business for themselves and starts by looking at a particular kind of business is making a mistake. Start by looking at yourself: What your skills are, what your interests are. That’s why FranNet’s personal profile and assessment tool is so helpful, to help clients figure out first of all whether they should go into business, then whether should they be in franchising, then what might give them the most personal satisfaction. When people are truly satisfied in what they’re doing, that optimizes the possibility of success. That’s the big distinction between a franchise salesperson and a franchise consultant.

What kind of person makes a successful franchisee?
Number one, you really need to have a strong desire to be in business for yourself. Number two — and this sounds contradictory, but it’s really not — it’s helpful if they like to work within a system, within the concept of a team. You’re running the business, but you’re not all alone. With a franchise, you get the safety and security and predictability of a system, but you get to be your own boss. So the wild-eyed entrepreneur who wants to be the next Steve Jobs is not a good match for franchising. You need to be disciplined and coachable and self-motivated, kind of like an athlete. The most successful athletes are self-motivated, but they work with a coach.

What are the benefits of franchise ownership?
I believe it’s the safest and most secure way to get into business and the quickest way to profitability. I’ve started businesses, bought them, sold them, and my experience is that the money you pay up front to the franchisor turns out to be absolutely worth it. You’ll have higher performance that more than offsets the franchise fee and initial expenses because the franchisor provides you with the blueprint for running the business and making it work. The last is the camaraderie you can have with your franchisor and fellow franchisees. It’s often said that entrepreneurship is a lonely path, but it doesn’t have to be that way. You can have great friends and a great team to play on in franchising.

Franchise Consultants Function as…

…. headhunters matching corporate workers with franchise systems

By Kathy Fisher

SALT LAKE CITY, UTAH – In the corporate world, employees are a business’s most valuable asset. Companies go to great lengths to recruit top talent, hiring corporate recruiters, “headhunters,” to identify and screen the best candidates.

To franchise systems, franchise owners are the most valuable asset, and companies are using FranNet of Utah to identify and recruit top-performing owners from the corporate world.

This matchmaking is revolutionizing the way franchise systems grow and is contributing greatly to job growth and the recovery of the economy.

“FranNet’s job is to match client and franchise opportunity according to the client’s skill set, passions and life goals,” said FranNet of Utah owner, Chad Wright. “We accomplish this through a carefully crafted evaluation process that assesses each client and ensures they look at the right franchises. Our services are free, and we’ve helped match thousands of clients with fulfilling careers in franchising.”

Franchise matchmakers are consultants who link clients seeking franchise opportunities with the right franchises. Often, clients are former corporate employees or executives who lost their jobs in downsizing; others are retirees who want a more dependable source of retirement income; still others are recent college graduates who are having trouble finding traditional work in the recession.

FranNet has helped connect professionals and franchises as diverse as Tom Kuthy, a former Frito-Lay executive in Colorado, and a web-based marketing franchise; and Oliver Howey, laid off from his job in employment assistance services in the Toronto area, and a home tutoring franchise.

“The diversity in franchising is the single biggest surprise to most of our clients,” Wright said. “The vast majority are expecting sandwich shops. But there are more than 3,000 franchises of all kinds, in the U.S. and Canada. Even if they know the number of opportunities, sorting through them can be overwhelming. That’s where we come in.”

Franchise matchmakers’ popularity continues to grow with the franchising industry. INC magazine listed FranNet as one of the fastest-growing companies and one of the top 10 franchise systems in the country for 2011, a year in which FranNet posted the largest revenue year in its 25-year history.

The franchise industry is booming. More than 19,000 new franchise locations will open this year, according to the International Franchise Association. Each new location creates an average of 10 new jobs, according to FRANData, a franchise industry reporting firm.

“In this economy, franchise ownership is one of the safest and highest-yield financial choices a professional can make,” Wright said. “Small business ownership allows people to build their careers and equity in something they own, and it’s our job as franchise matchmakers to make that happen.”

About FranNet - For nearly 25 years, FranNet, based in Louisville, Ky., has been one of North America’s leaders in matching franchisees with franchise companies. FranNet consultants use a specific profiling and consultative process to determine a business model unique to each client’s goals, skill sets and interests, and have matched thousands of happy entrepreneurs to rewarding small business opportunities.

Scott Gerber of Youth Entrepreneur Council, mastermind behind the Gen Y Fund. Photo from mixergy.com.

We at FranNet understand how the crushing burden of student loan debt prevents many of our brightest young minds from starting their own enterprises.

Just one incredible statistic: The total amount of student loan debt in the United States recently passed the $1 trillion mark, surpassing even the total amount of credit card debt. Another: For the two-thirds of college graduates who have student loans, the average debt load is $27,000.

Young people worried about defaulting on their student loans just need to find ways to make money quickly. So they settle for the job treadmill instead of taking the time, energy and risk to start businesses that might not produce immediately but can succeed spectacularly over the long term.

That’s why we were happy to hear (finally!) some encouraging news out of Washington.

President Obama announced a new “Pay As You Earn” student loan relief plan, a mix of loan consolidation, reduced interest rates and income-based repayment options. The program caps monthly payments at 10 percent of income and allows for debt forgiveness after 20 years. It’s an extension of the existing Income Based Repayment program, with its 15 percent cap and debt forgiveness after 25 years.

What’s truly encouraging is that the administration expressly connected the plan to young entrepreneurs, recognizing that small business ownership can be a much better option for a bright young person than a corporate job — as long as the young person has a fighting chance to manage his or her student debt load.

President Obama announces his administration's new student debt relief program in Denver on Oct. 26. Photo from Getty Images.

As part of President Obama’s announcement, the Young Entrepreneur Council stepped up with a new private-sector Gen Y Fund committed to investing $10 million in as many as 100 millennial-generation startups and paying down young entrepreneurs’ federal student loan debt over the next three years.

Those are positive steps in an economic climate that offers too little hope for young people. FranNet can play an important role, too.

We help guide potential entrepreneurs to the right franchise business opportunities by taking stock of their goals, preferences, interests and dreams and matching them to an array of franchise businesses that hope to join forces with someone smart and willing to work.

We’ve found over the years that recent college graduates often make excellent franchise business owners. The best have all the fire and passion they need, and good franchise systems can provide the structure and support. The right fit can mean a great opportunity — and our services are free!

Think you might be interested in franchising as a career option? Check us out at www.frannet.com.

A recent article found in Pala Alto Online features the story of three people who made the move out of the corporate world and into business with themselves. But this isn’t the normal “work for yourself” story – these people found their independence through franchising. Read the full article below:

Franchise owners weather turbulent economic times

by Carol Blitzer
Palo Alto Weekly Staff

Lisa Anter, owner of the Curves franchise in Menlo Park, talks to a customer in early December. Photo by Veronica Weber/Palo Alto Online.

While other girls were playing with their Barbies, at 6, Lisa Anter was charging 10 cents a cup at her lemonade stand at a lake near her Montreal, Canada, home.

The following year she upped it to 15 cents.

It would be another 20 years or so before her entrepreneurial instincts kicked in and she left the corporate world to open her own business.

But Anter didn’t choose to go it alone. Instead she purchased a franchise — in her case a couple of Curves circuit-training gyms — where she could count on a national organization to back her new endeavors.

Amos Wu and his wife were concerned about how the economy was affecting Wu’s career as an engineer in Silicon Valley. Just as the economy was starting to get rocky, Wu opened his first Subway in Palo Alto.

And Lewis Knapp, made “redundant” by the Oracle buyout of Sun Microsystems where he’d spent more than 20 years, opted to open his own business — Team Logic IT — which offers computer services to small businesses.

Each did their research, learning that opening a franchise can take anywhere from $19,000 for Made in the Shade Blinds or Creation Carpets to $1 million for ARCO and AMPM, according to www.franchisesolutions.com.

And each weighed the pros and cons of going the franchise route, rather than opening an independent business.

Most said they found the corporate support — often in marketing and advertising — filled in vital gaps.

“You can’t be an expert in everything — design, finance, customer service. Nobody is good at everything,” Anter said.

But that support comes with a less flexible side. Franchise owners are locked into an agreement with headquarters and must meet certain expectations, including financial ones.

“If you need to close, you can’t. … If they’re unhappy with you, they might not negotiate with you when something happens,” Anter said.

But for those motivated by basic disenchantment with the corporate rat race or by the economy, with its mergers, takeovers and layoffs, opening a franchised business can be an attractive choice.

Success rates appear to back them up: “The No. 1 reason businesses fail is lack of cash for working capital. After 10 years, only 16 percent of existing start-ups are still in business. With franchises, it’s 90 percent,” said Katie Fagan, franchise consultant for FranNet, a franchise consulting group in San Jose.

What Anter, Wu and Knapp have in common is their choice to pursue their passions, drawing on their corporate experiences to help them run their new businesses — their way.

Originally from Taiwan, Amos Wu, now 44, came to the U.S. in 1989 to attend graduate school at the University of Southern California, then moved to the Bay Area in 1997 to work as an engineer at Lucent.

But by 2003, he and his wife, Amanda Lee, were looking to start their own business.

“We thought it might be easier for us to open a restaurant,” Wu said, given his wife’s background in hotel management and experience working in France and Switzerland.

They briefly considered going it alone, but they didn’t have any family members knowledgeable about running their own businesses and were discouraged by information they gathered.

“We read some articles that said 50 percent of new businesses fail in the first year; 70 percent of businesses fail in three years. So we wanted to take a more conservative approach to starting our own business,” Wu said, adding that they could minimize risk with a franchise.

So they started checking out food franchises, such as Togo’s, Quizno’s and Jamba Juice. Some were rejected because of location; for Jamba Juice they were told they’d need to start by opening five stores.

“At the time we wanted to start small. We think this is too big (of a) commitment for us,” Wu said.

Ultimately, Wu and Lee bought an existing Subway franchise on University Avenue in Palo Alto in 2003, followed by one on El Camino Real in south Palo Alto in 2006, California Avenue in 2007 (a month after a fire at Walgreens closed his adjacent University Avenue location), and Midtown in 2008.

They re-opened a University Avenue shop, across the street from the first location, this past August.

At first the couple lived in San Jose, but they soon moved to Palo Alto. Today they manage about 10 employees per store, and they each work in all four locations as well.

Wu chose Subway for both the product and the company.

“We provide value food to customers. Subway in general is still growing — the number of stores, but also sales. People start seeing Subway provides value. Look at the $5 footlong — that has helped us. It really helped us to survive at a difficult time. It’s healthy but also real affordable,” Wu said.

Wu not only talks the talk, he eats at Subway most days.

“I believe in the food and that the system will do well,” he said.

Although he easily puts in more than 40 hours a week, Wu said, “I wish I would have changed earlier. My wife feels the same.

“We want to do this business long term, so we must enjoy our business. It’s not only ourselves but (we want to) keep our employees happy,” he said, noting that some have worked for them for more than eight years.

The couple has chosen to build their business slowly.

“When we opened, we took three years to open a second store. We have hands-on experience for three years. Now our focus is training people to do the right things,” Wu said, noting that he and Lee come in at different times, morning, evening and night.

“On University Avenue, we’re open 24 hours,” he added.

In addition to training the Wus on how to run a Subway franchise, corporate also offered demographics, including where competitors are located and what average disposable income is.

“That information helped us decide what location was more doable than others,” he said.

He also meets monthly with his development manager, who handles franchises in Santa Clara and San Mateo counties, to analyze the competition and talk about how to get draw customers in.

“This system works. They listen to the individual franchisee’s voice. It’s flexible. Corporate understands what individual stores need,” he said.

And when the Walgreens fire happened, the Wus were able to terminate the lease and salvage some equipment, including the bread oven. It took nearly four years to find the right-sized space on University Avenue.

In the future, the Wus could open another Subway, perhaps in Los Altos. Once they hit five, they’ll need a general manager to help keep the businesses going, Wu said.

But family is still their first priority.

“If we sacrifice our family, what’s the point of doing business? We have one 8-year-old daughter. We always keep cell phone within reach for her,” he said.

—

Lisa Anter, now 36, entered the corporate world by working for Reebok after earning a masters degree in international studies and an MBA. Then she was recruited to work in Denver at Johnson Controls, a Fortune 100 company headquartered in Minneapolis. But after a few years, corporate life palled.

“I had been working for huge corporations and was very disenchanted. As a young woman working in a predominantly male field, I found it really difficult.

“I think it would be different for me today, in my 30s, but it didn’t work in my 20s,” Anter said.

After her parents moved to Santa Barbara County, she decided to follow them to California and open a couple of Curves franchises in the Bay Area. She considered opening her own business but said that buying “a franchise is less risky. Curves had a 10-year track record.”

At first she looked at San Francisco, but its younger demographics didn’t suit the Curves model: 40- to 60-year-old women with a finite amount of time for working out.

As it turned out, most of the dozen Curves franchises in the City have closed, she said.

“I wanted a business where I wouldn’t work every weekend — that took out restaurants and sandwich shops — provided a service that I believed in, could really stand behind, and could provide me with a stable income so I could live my life and run a small business,” she said.

Anter opened the Menlo Park/Atherton Curves on El Camino Real in November 2003.

Setting her sights on Burlingame, she cleared the regulation hurdles in that city within a year and opened in a 100-year-old cottage that had parking on site.

In 2006 she purchased an existing Curves franchise in Belmont. But soon, she found that running three was more than she could handle.

“I thought I would get economies of scale but needed five locations (with a district manager, to do that),” she said.

“I was running myself ragged. I could see that my other two locations were suffering because of it,” she said. She ended up selling the Belmont gym a couple of years later. The buyer closed it less than nine months after that.

Then, a year ago, an electrical fire destroyed the Burlingame location. Not only did she lose her equipment and the structure but all of her membership records as well.

“Curves was as supportive as they could be,” she said, including not charging royalties for six months.

But by the time the building was repaired, re-opening would be just like starting a brand-new business — and this was not the right economic environment for that, she said.

As early as 2007, she said, “We started noticing numbers weren’t where they should be. Other Curves were starting to close in areas that I said were precarious to begin with.” She noted that Curves shouldn’t have opened a gym in East Palo Alto, “but they’re in Texas; they don’t know about rent.”

Curves’ traditional model is $400 rent, 120 members, in a rural town, she explained, adding that rent here is “thousands and no one has 400 members (to support that).”

But back in 2007 “there was no growth. Membership plateaued. … Slowly, slowly, we saw our numbers dropping.”

Curves corporate did offer advice on renegotiating leases, cutting hours and promoting the program. From the beginning, headquarters emphasized that a successful owner works in the business, Anter said.

“When I first opened the club, I had one part-time employee. I spent every second breathing, building up that business. Membership was growing; systems were in place. I knew how to run payroll, bookkeeping.

“I’ve always considered myself an active Curves owner. I never had a second job.”

Anter attributes the drop in enrollment to the economy. Although the business is based on a model of members working out three times a week and paying $45 each per month, many members only used Curves four or five times a month.

And when women — or their husbands — lost jobs, it was easier to cut out Curves than not pay for cable, she said.

“It’s very short term (solution). Now you’re not going to fit into your clothes. A pair of jeans is at least $50! … If you think about it, it’s a tank of gas,” she said of the monthly membership fee.

Economic pressures have kept her from re-establishing Curves in Burlingame, where she lives and used to bike to the office. She’s gathered contact information from about 75 former members, she said, but “I lost so many clients — many of them went to do other things, or join other Curves. Once you start a routine, it’s hard to switch back again. There’s no guarantee people would come back.

“I wasn’t willing to risk the time and my heart to reopen. And it was a huge financial risk. … I don’t know anyone who would open a Curves in this economy,” she said.

Asked if she had considered buying the recently closed location in downtown Palo Alto, she said, “The economy wasn’t where it needed to be to expand. Membership wasn’t where it needed to be in order to be viable long term.

“I don’t know if I had it in me to build another Curves. There isn’t the challenge for me. Opening a business at the beginning was really fun.”

Today she’s putting in 20 to 25 hours a week, a sharp contrast to the 65 to 80 hours she devoted when she had three Curves franchises.

“It was ridiculous. I had no personal time at all.”

She’s earning a living but not without personal sacrifices, she said, such as no more international travel. But she’s living a few hours away from family and values the time with them.

Where will she be in five years?

“I’m 36, single. I hope to be married and have kids and be able to run a business,” she said.

—

Leaving Sun Microsystems wasn’t Lewis Knapp’s choice in 2010. He had started there as a software developer in 1987, working his way through program management, an executive role as chief of staff, then into the visual design of Sun’s website. But upon being downsized, he took the opportunity to look around. Part of his “transition” package was meeting with a career-services company, which in turn put him in touch with FranNet.

After assessment, he met with a counselor who earmarked eight potential franchises, showing him a binder several inches thick. They narrowed the choices down to three.

Knapp, who formerly thought of franchises as fast-food businesses, found the range of opportunities eye-opening, he said.

He considered the three carefully: Hoods was a company devoted to cleaning restaurant exhaust systems, which are required to be serviced every quarter; another was a private-investigation business; and the third was what he ultimately chose, Team Logic IT.

His company provides information technology (IT) support to small- to medium-sized businesses, covering computers, backup systems, telephones, email, security and network management.

What appealed to him most was the independence.

“In the back of my mind I always wanted to run my own thing. Having the ability to start something up with the support of a known system took a lot of the uncertainty out.

“I don’t have a strong marketing background or direct-sales experience. The franchise can help shore up those gaps in my experience,” Knapp said.

Where his personal skills come into play are in the knowledge of hardware, operating systems and software development and in understanding the IT landscape his clients need.

“Every client is different. We want to represent ourselves as the trusted partner for everything IT,” he said.

And if he can’t come up with an immediate solution, he has a network of 50-plus other Team Logic IT franchise owners who are available for consultation.

“I don’t get any sense of competition. … Everyone’s been really helpful offering up solutions that have worked for them,” even sending supporting documents, he said.

Start-up was slow: It took him five months to hire his first (and only) employee, a technician. He finally opened in mid-June 2011.

But start-up costs were relatively low: $35,000 for the initial fee, plus royalties that were suspended for the first six months.

“I could get by with a desk phone and laptop for each employee,” plus a server for the office and a Prius wrapped with the company’s logo and contact information.

Over time, Knapp expects to hire a team of three technicians and a salesperson.

“That will give us a scalable model to support our clients,” he said.

While Knapp has the territorial rights to sell his services to clients in Menlo Park, he’s not limited by contract to those borders. The next closest franchise is Mountain View, which covers the southern part of Palo Alto.

Part of his attraction to Team Logic IT is its overlap with his corporate background. Although that background is more on the software side, he calls himself a very advanced home-computer user. That enables him to talk easily to potential customers about their office needs.

He also enjoys being able to control his work hours. Even putting in 45 to 50 hours a week, he can see his kids in the morning and be home for dinner.

“I might work after the family goes to bed and a little on weekends,” he said, including cleaning the office. “I wear many hats — but I try not to send emails in the middle of the night.”

That contrasts with the old Sun schedule, when “clients were worldwide and we had to get the job done yesterday.”

One of the reasons he rejected Hoods was the third-shift work. Restaurant equipment needs to be cleaned in the middle of the night.

Although he’s only been open for a few months, Knapp expects to become profitable within the first year.

“We’re bringing customers on at a rate that’s pretty healthy,” he said.

So far he’s found the Team Logic corporate support useful. He talks with someone at corporate weekly about what’s in his pipeline, going over his prospect list and making sure he fully understands the systems the company provides.

“I can call the president anytime asking for advice,” Knapp said, or any other department, from legal to human resources.

“I see them as both my board of directors and an employee I’m paying 8.5 percent as a salary,” he said.

Will that ever get old?

Once his business stabilizes and he isn’t taking as much advantage of the company’s resources, he said, he might question what he’s getting out of the partnership.

But “I don’t foresee any regrets,” he said, pointing to the company’s constant updating of marketing materials, leaving him free to look for new clients.

For Knapp, opening a franchise has taken much of the risk out of starting a new business.

“It’s almost an inverse: In the first five years, one in 10 independent businesses succeed and one in 10 franchises fail. It’s a remarkable difference,” he said.

Jania Bailey, COO of FranNet, talks about her franchise industry predictions for 2012

The nation’s job market will continue to struggle in 2012, opening more opportunities for former corporate executives and managers to reinvent their careers through self-employment in franchising, say the franchise experts at FranNet.

FranNet, a national franchise consulting firm, has worked in the last three years with a growing number of potential entrepreneurs who either lost their corporate jobs or chose to leave them. Many of these workers have turned to the growing franchising industry as an alternative that gives them more flexibility and control over their jobs and lives and a more secure financial future.

“Since 2008, the franchise industry has been one of the few segments of the national economy that’s shown consistent growth,” said Jania Bailey, FranNet’s COO. “In 2012, many corporate workers who have been out of work for months will realize they are not going to replace that six-figure income and will research franchise ownership as their next career move.”

Each new U.S. franchise creates an average of 10 new jobs, according to FRANdata, which tracks franchise industry statistics. In 2011, American entrepreneurs opened more than 19,000 new franchise businesses; it was a record year for FranNet, which Inc. magazine listed as one of the fastest-growing U.S. companies.

FranNet’s 2012 trends for the franchise industry:

• More outplaced corporate executives will turn to franchising as career options dwindle. Experienced workers will leverage their experience to manage and grow viable franchise opportunities, creating wealth and jobs.
• Low-investment, service-based franchise brands will continue to grow. Franchises that require initial investments of $150,000 or less will have the greatest chance of growing because of their potential for high returns despite the low initial cost.
• Senior health care and other franchises that offer goods and services to the elderly will grow as more baby boomers hit retirement age.
• Family-run franchises, which already make up 25 percent of the new business FranNet helps establish, will remain popular as people invest in franchise opportunities to employ out-of-work spouses and adult children with poor career prospects.
• Franchises that help people extend the life of goods and do more with less will continue to thrive. Car repair, home improvement and refurbishing brands do well in an age when people would rather repair items than replace them with new ones.
• As has been the case since the financial collapse of 2008, financial institutions will continue to be tight-fisted with loans, leading to frustration for potential entrepreneurs who lack money for their initial investments. Most new franchisees will have to rely on 401K rollovers and Small Business Administration loans from small community banks.

Thousands of former corporate employees who have discovered franchising have learned what entrepreneurs have always known: Franchise ownership can not only replace lost income but create jobs, help invigorate the local economy and establish a reliable source of retirement income with substantial resale value.

“The coming year will be a great one for the franchise industry,” Bailey said. “As a country, we’re becoming more realistic and practical about where the job market is going. Workers who have been sitting on the fence are likely to jump into franchising this year, and the franchise industry is going to be the big winner.”

About FranNet
For nearly 25 years, FranNet, based in Louisville, Ky., has been one of North America’s leaders in matching franchisees with franchise companies. FranNet consultants use a specific profiling and consultative process to determine a business model unique to each client’s goals, skill sets and interests, and have matched thousands of happy entrepreneurs to rewarding small business opportunities.

In a down economy, starting your own business is a smart way to go and most of the time franchising is the answer. That’s why the Moores purchased ten locations of the Five Guys burger franchise as soon as it became available. Interviewed by the Knoxville News Sentinel, the father-son duo talked about why they jumped on board.

“It was a no-brainer,” says Kevin Moore. “There was no risk to us because we knew the product. We felt it would be a very popular brand.”

But for those who aren’t sure where to start, getting some advice from a franchise consultant can be a great help. Jerry Bird, franchise consultant in Tennessee, spoke with the Sentinel. Would-be small business owners can choose among roughly 3,200 franchises operating in 80 industries — “some good, some bad and some we would not recommend,” says Bird.

In the article, Bird also noted that some of America’s most recognized brands are actually a network of small businesses — franchisees — who operate under the rules created by the franchiser. Think fast-food restaurants, automotive dealerships and many retail outlets. Categories such as senior care, education, fitness and service industries like home repair and cleaning services are increasingly popular.

The article also gives a little of Bird’s background and why he himself chose to become a franchise consultant. To read more of the article, click here. If you’re interested in starting your own franchise and being that much closer being your own boss, give us a call and let’s talk.

FranNet of Southern Ontario President Gary Prenevost offers franchise advice to client Rachelle Shea. (The Toronto Star)

What do all the online dating service commercials say?

We use our special 46-point formula to determine the precise mesh points for you and the romantic partner you’ve been waiting for along a 13-axis spectrum of compatibility. Or something like that.

Sometimes it works, sometimes not. But what if you took the same basic idea, simplified it and applied it to the world of franchising?

It’s a big pool. Thousands of franchise opportunities are open every day, in fields that go way beyond traditional restaurant franchising: tutoring, auto service, technology management.

And a lot of bright, skilled people — from recent college graduates trying to find work and pay off their student loans to former corporate executives in their 50s looking for fresh starts and dependable retirement income — are flooding the job market.

FranNet’s job is to take stock of clients’ interests, life goals, desires and skills and find franchise companies that match them.

That’s what we mean by “franchise matchmaker.”

Corporations and other large institutions like universities do the same thing. When a large corporation needs an executive vice president’s position filled, it contacts its corporate recruiters — “headhunters” — who search for the best candidates to fill the position.

That’s what FranNet does, too — but on a smaller, more intimate scale. Buying a franchise isn’t just a major career step. It’s a deeply personal thing.

When you start a business, you can’t just drop it if it’s not working out. You’ve invested time, money and energy. The fit has to be just right for franchisor and franchisee alike, or it won’t work.

At FranNet, we take that responsibility very seriously. It’s why our more than 75 skilled franchise consultants in the United States and Canada spend so much time and care with each client, making sure they understand just what the client is looking for.

FranNet Colorado owner Stacy Swift helped Tom Kuthy, a former Frito-Lay executive, reinvent his career through a web-based marketing franchise.

In Canada, FranNet of Southern Ontario President Gary Prenevost walked Oliver Howey, laid off from his job in — what else? — employment assistance services, through his options before Howey found his new job owning a home tutoring franchise.

FranNet West President Cari Vinci helped former commercial real estate agent Richard Kerr survive the crash of California real estate and get a fresh start through ownership of an urgent care franchise. Kerr is 60. It might seem like an unlikely pairing. But people never know until they try.

Think franchise ownership might be your professional heart’s desire? Check us out at www.frannet.com and consult, for free, with a local franchise expert who might just introduce you to the job of your life.

Dan Aronoff speaks to a class of young entrepreneurs.

In today’s business economy, the franchise industry, not big corporations, are stealing the job creation headlines.

Students at Nashville’s Belmont University are getting a hands-on look at franchising, a business model experts regard as an important alternative to large corporations.

Belmont asked Dan Aronoff, a Nashville franchise expert and owner of FranNet of Middle Tennessee, to share his expertise as a franchise consultant by teaching a class for students hungry to start their own businesses and considering franchising as a career option.

“Business schools traditionally teach the large corporation approach to business, which is filled with multiple levels of management,” said Aronoff. “In today’s market, businesses that thrive are often smaller and more nimble, and franchises often perform better than their corporate counterparts. Anyone studying business at the university level should become more aware of the franchise industry.”

The Center for Entrepreneurship at Belmont is a good fit for the course. The Center, highly regarded in the business world, elevates its curriculum further by using a FranNet owner to teach undergrads, said John R. Reynolds, President of the IFA Educational Foundation.

“Being able to draw on that expertise, bring in the practical side of franchising and use a network of contacts for guest speakers is very important,” Reynolds said. “I think it is great.”

Aronoff and his guest speakers provide from-the-trenches information that won’t be found in many business textbooks. College credit courses devoted solely to franchising are rare at either graduate or undergraduate levels. “Most of the time, franchising is taught as part of an overall course on entrepreneurship,” Reynolds said.

Aronoff uses an impressive list of Nashville-area franchisors, franchisees and franchising experts as guest speakers, making the class one of the best franchising courses in the country.

Dan Aronoff talks business.

“This is an exciting time in franchising because it is one sector of the economy that is growing and creating jobs,” said Aronoff. “These students see that. As a group, they are business-savvy and have a clear entrepreneurial leaning.”

Belmont has offered an upper-level undergraduate franchise management course for three years, and interest in the course — and entrepreneurship in general — is booming, said Dr. Jeff Cornwall, who holds the John C. Massey Chair of Entrepreneurship and directs the Entrepreneurship Center.

“Thirty percent of our incoming freshmen class have already declared themselves as entrepreneurship majors,” Cornwall said. “It absolutely blew us away. We have students showing up with interesting businesses already.”

For more information on FranNet, see www.frannet.com.

Big Frog carries shirts and apparel for men, women, children, babies and pets.

Gene and Debbie Rogero were ready to seek a new type of business after being fed up with the corporate world. The couple met with Leslie Kuban of FranNet Georgia, and found a Florida based T-shirt printing franchise that really caught their interest. Their new business, with five locations in Atlanta, has taken off with more customer traffic than expected.

In an article from Online Athens, the couple was interviewed by John Vanhoose about their recent success. “We’re getting a lot of people in here through word of mouth, which being that we’ve only been open for three weeks is encouraging,” Rogero said. “We were expecting the campus groups to come in, but we’ve also had businesses from all ends of the spectrum.”

A man with an entrepreneurial spirit, Gene Rogero was looking for something outside the banking world where he had spent 25 years. After being downsized “one too many times”, Rogero was eager to be his own boss and start his own business.

“Six months ago, I had never heard of Big Frog,” he said. “But I have always been entrepreneurial at heart. I didn’t see any holes in the concept.”

To read more about the Rogeros and their venture into owning their own business, read the rest of the article by clicking here. If you’re interested in moving away from working for others in the corporate world and would like the opportunity to be your own boss, give us a call and start the conversation today.

A Facebook user. From Google images.

Small business owners who have continued to succeed during the recession are among the most avid users of social media to reach customers, says a new national survey of entrepreneurs.

The fall American Express OPEN Small Business Monitor found that 58 percent of business owners who described themselves as “riding high” say they use social media to attract new customers, and 37 percent say their companies’ social media presence is part of their everyday interaction with customers. Facebook, which a full third of surveyed businesses use, is the most popular social media tool among small business owners, the survey found.

FranNet, a North American network of franchise consultants, maintains a strong presence on Facebook, Twitter, LinkedIn and other social media outlets, encouraging its team of more than 75 franchise owners in the United States and Canada to maximize their impact via social media as well.

“More and more people are reaching out to us and reading our content on Facebook, Linkedin and Twitter,” said Jania Bailey, FranNet’s president and COO. “They’ve become indispensable tools for our franchise owners because they provide a way for customers to learn about and communicate with FranNet, and at no cost and minimal expense of time and energy for our consultants. I can’t imagine trying to succeed today in a small business without a significant social media presence.”

More than one in four small business owners surveyed said social media has helped their businesses survive the recession, and owners who are “riding high” are less likely than others to see social media as a waste of time and energy. The degree of social media expertise varies widely: Nearly half of respondents described themselves as social media “newbies,” while 24 percent said they were “mavens” and 18 percent said they had no grasp of the medium.

The state of the economy has forced entrepreneurs to make some hard, practical choices, the survey found. Only 31 percent of respondents said they planned to add staff over the next six months, and 38 percent said they believed the United States is still in a recession.

But the survey showed some signs of optimism, too. A lower percentage of business owners are worried about meeting payroll, and an increased number — nearly half — plan to make some kind of capital investment before the next survey in the spring.

Interested in a franchise opportunity with a growing team of franchise consultants? See www.frannet.com.

Mike Welch, owner of FranNet Minnesota

Mike Welch doesn’t mind talking about his “failure” as a traditional small business owner because it eventually led him to seek the structure and success of franchising. Welch, 35, was a highly successful advertising sales executive before the age of 30. Then, he started his own company, a journey that proved difficult. Luckily, Welch is a fast learner. He quickly leveraged the hard lessons he was learning as an independent small business owner and found a home in franchising.

Q. What is your professional background?
A: I started out in my early 20’s selling advertising on movie theater screens. I was the national sales manager by the time I was 27. I decided to start my own technology company. It didn’t go very well, but I like to say I had the good fortune of experiencing failure as a small business owner. I was such an entrepreneurial dreamer. We were completely unorganized and needed someone meticulous, grounded and disciplined. Ultimately, the business didn’t survive. After that experience I had more of an appreciation for the structure and power of the franchise business model. I then purchased an All Over Media (advertising) franchise and fell in love with franchising. It was a way I could own my own business without having to be as grounded and structured as you need to be when you are going it alone. All I had to do was execute the playbook. Within two years I sold that franchise for a 300 percent profit.

Q. How long have you been a FranNet consultant?
A: Less than two years. I looked into FranNet after I sold my All Over Media franchise.  Franchise consulting is a great match for me, especially because of my experience in running a business by myself. A friend who’s very prominent in the franchising world recommended FranNet. I could have opened any franchise brokerage in the country. Choosing FranNet was a no-brainer. It’s top notch and has the best systems, processes and support available. It’s the country’s marquee franchise brokerage.

Q: Can you give a couple of examples of your success stories? Who comes to you looking for help?
A: I see many people from many different walks of life, but there’s high percentage of displaced corporate executives — middle managers all the way up to CEO. Most are in their 40’s and 50’s and I’d say almost all of them are nervous. Their security is important to them. They are looking for more control and independence and financial security. They don’t want to face layoffs and the unpredictability of corporate life. Their usual mindset tells them to go find a traditional job. But here are the jobs, and is that what they really want?

Starting your own businesses seems like the antithesis of security to many of the people I see. I introduce them to franchising and help them see how they can use their attributes in this unfamiliar model. There’s a lot of education – meetings with franchisors, seminars, telephone consultations. We are looking for as close to an ideal fit as possible.

Q. Can you talk about franchising in this economy?
A: Franchising is counter cyclical. When Corporate America is downsizing and displacing talent, franchising is there to give that person a place to land. So when the economy is down and corporate talent is being thrown aside, there are more people interested in starting their own business.

When looking for a franchise, I recommend looking for industries that are relatively recession resistant. Examples? Well, you are going to get your hair cut whether it’s a bull market or a bear market. I don’t care how hard your life is, when your transmission goes out you are going to take it somewhere to be fixed. Children’s services are great because people will always spend money to make sure their kids are getting what they need. No one wants to go into a nursing home. You can’t completely insulate yourself from the world and the economy around you, but you can protect yourself by going into good industries.

Q. Do people still have preconceptions about franchising? How do you educate them about the diversity?
A: Most people have an awareness of the major franchise chains that they see every day. They tend to assume that is what franchising is — food-based retail. We immediately let them know that franchising exists in 80-plus other industries. What they are aware of is like the tip of an iceberg. We put our scuba gear on and see the rest of the iceberg.

Franchising is a fiscal juggernaut. It can’t be ignored as a viable channel through which to start a business. Many benefit from the coaching process to understand and become comfortable with the trade-offs. They might be giving up some of what they think of as creative independence in exchange for the opportunity to reach their goals. Because I’ve been down the road of owning my own business without support systems in place, I’m able to talk from experience. I failed as an independent business owner. I don’t want to write the playbook.  What’s another example of a trade-off? Well, let’s say you pay a 7 percent royalty fee and in exchange you increase your chances of success four-fold. Franchised businesses are four times as likely to survive as similar independent companies.

Q: Who makes a successful franchisee?
A: I believe the world has always and will always break down into a 20-60-20 model. Twenty percent will be at the top even if you are playing a game of pick up sticks. Winning is mandatory. Another 20 percent is at the bottom. They aren’t willing to do those things everyone else is willing to do to be successful. The rest, the 60 percent, are in what I call the comfortable middle. Of course, there’s a range of skills and motivation within that 60 percent, but many of the people in this range make successful franchisees. They need to find the right franchise because they to be excited about what they do on a consistent basis. Of course, they also need to be tenacious and hard working.

Q: What are the benefits of franchise ownership?
A: A Gallup poll found that 90 percent of people want to own their own business. And yet many people go it alone and fail. It’s like trying to jump over the Grand Canyon. If you choose a franchise with good systems and processes it’s more like jumping over a little creek.

Q: What are a couple of success stories?
A: I worked with a former vice president of strategy and business development at a large corporation – a Baby Boomer and a corporate refugee. I showed him a light manufacturing/sign franchise and his first reaction was that it was a waste of time to even look at it. I asked him to suspend his perception of reality and take the time to really consider it. This is an important part of the process with many clients because they don’t realize yet how their skills can be leveraged. His transferable skills were very much in line with the top owners in that particular franchise and he’s now happy as an owner.

I also recently worked with a corporate refugee from a major electronics and appliance chain. He was used to a six-figure income. I introduced him to a painting franchise. He didn’t initially perceive himself in this kind of industry because he’d been in this white collar career. But the transferable skills were there in spades – especially the management skills. He’s doing great now. He’s ramping up quicker than any franchisee I’ve ever seen.

Tom Kuthy. Photo from his Twitter account.

FranNet helps former corporate employees make the transition to business ownership through franchising. Many of our clients were forced out of their corporate jobs and turned to franchising because it was their best option.

But even as a success in the corporate world, Tom Kuthy knew he wanted to work for himself.

“I never really wanted to be back in the corporate world,” Kuthy says. “I wanted to become an entrepreneur.”

Kuthy had held impressive positions: vice president of Frito-Lay in the 1990s, and until last year vice president of marketing and business development at Resolution Media, a Chicago-based digital marketing agency. But in 2010, the Colorado Springs, Colo., resident reached out to Stacy Swift, the owner of Denver-based FranNet Colorado.

Based on Swift’s recommendation, Kuthy bought a franchise license from WSI, an Internet marketing franchisor that specializes in web-based marketing and other services for small and mid-sized businesses. WSI is based in Toronto, and its three-country empire — the United States, Canada and United Kingdom — is expanding, having added 149 franchises last year and a projected 210 more in 2011.

It was just what Kuthy was looking for.

“WSI allowed me to capitalize on my skills in marketing but be independent,” he said. “For a sales and marketing executive, a franchise like WSI is the perfect fit.”

Kuthy’s story was recently featured in USA Today’s “Franchising Today” section, which highlights franchising success stories. He’s quick to credit Swift and FranNet for helping him realize his dream of business ownership: “Without Stacy and FranNet, I might never have made the best career decision of my life.”

Swift returns the praise. “Tom is exactly the kind of dynamic, skilled professional we at FranNet love to take on as a client,” she says. “He’s like so many clients of ours who have more than enough energy, skill and passion to win at their corporate jobs but want to take control of their professional and financial futures in uncertain times for corporate America. FranNet specializes in assessing the skills and passions of people like Tom and finding the right fit for them in franchising.”

FranNet, based in Louisville, Ky., is a privately held franchised business consulting company that for nearly 25 years has excelled at helping professionals move from the corporate world to new and fulfilling careers through business ownership. FranNet consultants work one-on-one with clients and use a specific profiling and consultative process to determine a business model unique to each person. For more information, see www.frannet.com.

All Business Magazine

College tuition is on the rise and these days, many people are starting to wonder what the purpose of a degree is. In an article by Sara Wilson for Allbusiness.com posted on Oct. 27, an interesting discovery is made: having a college degree does not necessarily guarantee success in the franchise industry. Mike Welch knows this first hand. As a very successful franchisor and current franchise consultant, Welch never actually received a degree. In the article, Welch gives us some insight into this decision.

Mike Welch

“I’m quite certain that the lessons that I learned in my time in corporate America and as a small business owner have served me better than anything that I might have picked up in English Lit as a 19-year-old,” Welch says.

Not having a college degree has not hindered Welch’s personal success, but is it something that franchisors look for? “Most franchisors are going to give little weight to a person’s degree during the selection process,” says Welch. “Good franchisors with proven track records are looking for transferable skills that the franchisee can leverage in order to be successful as an owner. Skills like marketing, management, team building, administration, etcetera, are most often built during a person’s working years, not their college years. Thus, franchisors tend to gravitate to corporate refugees because they already know how to implement systems and follow processes. In stark contrast to corporate America, franchising, in most cases, prizes the wisdom that comes with battle scars more highly than the wisdom that comes with a sheepskin.”

The article continues on to note that it’s really up to the individual to bring out the best in his or her franchise. A degree can be a a great start in the right direction, but in the franchising industry, it’s not necessarily the only means of success.

Are you ready to get involved in owning your own franchise? Give us a call to start a conversation. Interested in reading more of the article? Click here.

The Louisville Business Journal ranked FranNet, a North American network of franchise consultants, 12th in its “Fast 50” list of the Louisville area’s fastest growing businesses.

The business publication held its annual awards luncheon Oct. 27 at the Kentucky International Convention Center before a record crowd of more than 600. FranNet, based in Louisville, recently made INC Magazine’s list of the top 500 fastest-growing companies in America as well, having posted 792 percent revenue growth over the last three years and record 2010 revenue.

“In a down economy, franchise opportunities are some of the best business opportunities available for skilled professionals who have lost their jobs or decided to leave corporate America,” said FranNet President and COO Jania Bailey. “FranNet has been able to grow quickly over the last three years because it meets a need in the marketplace for good, viable, long-term business options.”

Jania Bailey

FranNet uses a network of consultants in more than 70 American and Canadian markets to help talented professionals move into small business ownership through franchising. The company, a franchise business itself, evaluates clients’ needs and aspirations and matches them with the best franchise opportunities. FranNet offers its services for free.

“We expect our final numbers to show that 2011 was another record year for FranNet,” Bailey said. “We’ll help open more than 500 new franchise businesses this year, and when you realize that each new franchise creates an average of 10 new jobs, that’s a significant benefit to the economy.”

To be eligible for the Fast 50 award, companies had to average at least $1 million in revenue for the three most recent years; operate within the greater Louisville area;

and have a three-year operating sales history. This was the 12th year for the Fast 50 program.

For more information, see www.frannet.com.

Upscale decor and expanded menu offerings are part of a new cafe concept being tested by Subway at a test store in Arizona. Food, retail and service are hot franchise opportunities, according to experts.

We at FranNet know new franchised businesses create local jobs but also like to see local media outlets recognize it. John McLellan, president of FranNet of Chicago, provided key insights to the Daily Herald Business Ledger, a suburban business publication, in an Oct. 21 article that hammered home how franchising is key to the U.S. economic recovery and why so many corporate workers look to franchise ownership as their next step.

“With the disappearance of corporate loyalty and the instability brought on by downsizing and buyouts, the greatest appeal to new franchise owners is not money, but control and independence,” John McLellan, president of FranNet of Chicago, a franchise consulting firm, told the Business Ledger.

“People want control of their future. They want to and are willing to invest in themselves rather than the stock market or with banks. Franchises give people the opportunity to ‘ be in business for themselves, but not by themselves.’”

To read the full article, click here.

“We are seeing great franchise candidates from many age groups and industries, and many of them want to be part of the economic recovery,” McLellan said in the article.

FranNet, a North American network of franchise consultants, uses a specific process to help clients evaluate franchise options and find the best match. Looking for a career alternative? Check out the Daily Ledger story and fill out our contact form. Franchising may be the answer.