Franchising looking good as small biz
By Janet Forgrieve
ROCKY MOUNTAIN NEWS
DENVER — For shoppers at Lowry Town Center, Squeeze Fresh Smoothies is just the citrus-colored shake shop on the corner. But there's more to it.
Greenwood Village, Colo.-based Squeeze, founded by former Quiznos Seattle-area director Richard Dean, is one of a growing number of companies that are franchising for faster growth. Most recently, the company signed deals to open 75 more of the smoothie shops in Arizona and California in the next seven years.
Nationally, 767,483 franchises have created more than 18 million jobs, nearly 14 percent of the country's private-sector employment, according to figures from the International Franchise Association. Those businesses generated $506.6 billion in payroll in 2003.
Texas-based Interstate Battery, which has been primarily a wholesaler for more than 50 years, instituted a franchisee program last year to expand its 19-store chain of All Battery retail stores.
The concept is simple: Stores sell batteries for everything from the tiniest gadget to the biggest motor vehicle and, if they don't have it, they'll make it. It has opened more than 40 franchises in 26 states, the District of Columbia and Puerto Rico.
Interstate has hired Houston-based Liberty Development Consulting to solicit, qualify and sign up franchisees in new markets.
For franchisees, the attraction is often clear: They start their own businesses but with backup, training and often an established name.
Financing edge
Financing comes more easily to franchisees than to pure startups, because lenders and guarantors such as the U.S. Small Business Administration are more likely to approve loans for franchisees signing on to a proven concept.
Other economic reasons also are adding to the growth of franchising, said Kevin L. Hogan, president of Liberty Development which has also advised Shell Oil, Church's Chicken and Bruegger's Bagel bakeries.
After the stock market burned investors earlier this decade, many looked for alternative investments, Hogan said.
That fueled a real estate boom and, because franchising requires stores and so is often real estate-intensive, the number of franchisees grew.
"Now, people are moving more and more into franchising because even real estate now — it's questionable as to whether it's a bubble," he said. "Franchising is no bubble — you can do it for 30 or 40 years and even hand it off to your kids."
Denver-based Spicy Pickle Franchising was created in 2003 to take the popular local sandwich shop to a slew of new customers.
Franchisees have opened 15 stores in five states, with more under construction and franchise agreements in other states, including New York.
"Franchising is growing at a remarkable rate," said Marc Geman, managing partner of Spicy Pickle Franchising.
"The reason for that is there are a lot of people now who are looking toward owning a franchise as a lifestyle. They're coming out of white-collar industry and places like that, and owning a franchise is an opportunity to make a good living and own their own business."
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