A look at what will happen next in the world economies
Wednesday, November 14, 2012
We have discussed previously how retirees will have to adjust their expectations for pensions and continue to work, here is an example of the and franchises will enable many to get into a business. Aivars Lode avantce
We have discussed previously how retirees will have to adjust their expectations for pensions and continue to work, here is an example of the and franchises will enable many to get into a business. Aivars Lode Avantce
After 13 years in the insurance game in Texas, Glen Goode decided he'd had enough of sitting behind a desk all day.
So earlier this year, he chucked home and auto insurance sales — and the Lone Star State — in favor of a mobile Kona Ice truck franchise in Bradenton.
"I was ready for that next career. I wanted a concept that had a low cost of entry, low cost to run it, but high value as far as community involvement and fun," Goode said.
These days, he sells Kona Ice desserts, the Kentucky-based chain known for its "Flavor Wave" do-it-yourself syrup bar, at Manatee County sporting events, practices and community events.
Goode is among the thousands of baby boomers and retirees in Southwest Florida embarking on second careers or pursuing hobbies for profit-owning franchises, where the advantage is often a recognizable brand, a proven business model and expert assistance in running an operation.
Nationwide, the number of franchise agreements signed in the U.S. this year is expected to rise by 1.9 percent. That would reverse three years of declines and represent about 14,000 new careers for the owners, according to data from the trade group International Franchise Association.
For franchisees, owning a Subway or McDonald's restaurant or other chain outlet can be a lucrative venture, albeit one that often requires following corporate directives to the letter.
"Quick-service restaurants, home care services and fitness centers are some of the most popular industries spreading across Florida," said Rick Bisio, a Bradenton-based franchise consultant and the author of "The Educated Franchisee."
Franchising can be a relatively easy way for chains to expand into new markets or solidify existing ones, while reaping entry and other fees that can run into six figures.
Seven-Eleven Inc., for instance, has opened 16 stores in Southwest Florida since 2010, all franchises, said spokeswoman Margaret Chabris. The Dallas-based company anticipates opening another 15 here by the end of 2013, again primarily through franchisees.
"Some franchises do really well because of the senior market," said Meg Schmitz, a franchise consultant with FranChoice, a Minnesota-based service that links businesses with prospective owners and territories.
"Brands target those that are coming to Florida for retirement, but still have some fire in the belly," she said of prospective owners.
But getting a franchise and the rights to a brand name and often a territory can be pricey.
Initial fees typically start around $15,000, though many companies require prospective outlet owners to have at least $50,000 in additional liquidity for marketing, inventory and reserves, Schmitz said.
Moreover, many companies demand annual royalty fees that can add thousands of dollars to a business' expenses.
But the hefty price tags do offer several advantages for entrepreneurs — especially those trying something new.
Typically, franchise fees buy training, equipment, store build-outs and, sometimes, the right to tag on to corporate marketing promotions.
"Franchisers offer a proven system to do business," said Jerry Chautin, a Herald-Tribune business columnist, franchise expert and volunteer business mentor,
Often, however, the proven path comes at the cost of individual freedom.
"But franchising is no place for entrepreneurs who think they can outwit the system or are happier doing things their own way," Chautin added. "To an extent, buying a franchise brand means giving up your independence."
The growth of personal service franchise businesses, such as lawn care and pest control firms, is expected to top other sectors by 6 percent this year, according to the franchise association.
Retail products and services — a wide category that includes gyms and other services — are expected to experience continued growth as well, the result of burgeoning consumer confidence and spending.
Al Roach already is a believer.
In 2004, he was living in Sarasota when he discovered a St. Louis-based gym brand looking to expand. Today, 20 minutes to Fitness has four sites: two in Southwest Florida that Roach opened in Lakewood Ranch and Sarasota, and two in Missouri.
"I think franchise business is one of the most successful models out there," said Roach, whose first direct franchise experience came with 20 Minutes to Fitness, though he had once worked as a lawyer specializing in franchise law.
Roach wants to further expand 20 Minutes to Fitness. The chain hopes to open three or four more locations this year, Roach said.
As with other chains, the price of entry is not cheap. Franchise fees start at $30,000, with a total investment reaching upward of $245,000.
But Roach believes the cost is worth it to prospective owners.
"We offer a duplicable model, everything is provided," he said. "We teach them how to do everything. There isn't an easier concept out there."