Meta-Franchise Consulting February Newsletter

The February newsletter is now available! Top 10 Franchises for 2011 and Meta-Franchise News

Top 5 Franchises for Sales Executives

One of the reasons people buy franchises is because the franchisor provides initial training and ongoing support to help you make your business as successful as possible.  So for many food franchises you don't need a background in the restaurant business and there are a lot of service-based franchises where you don't need a strong sales background.  However, for the Sales Executive looking for a career change, there are franchises that will let you put your strongest skill set to work. 

Here are my picks, in alphabetical order, of the Top 5 Franchises for Sales Executives:

1. BrightStar Care
Named as one of the Top 10 Franchises for 2011 by Inc. Magazine, BrightStar Care is part of the Senior Care industry that takes care of the more than 38 Million seniors in the U.S.  Nearly 20% of seniors have significant long-term care needs and by 2020 the number of senior households is expected to grow by nearly 53%.  A U.S. government commission recently concluded "the need for Home- and Community-Based Services will grow substantially owing to the desire for seniors to age in place."  BrightStar is on this list because:

• Franchisees have access to multiple revenue streams within each major service offering: Senior Care, Kid Care, and Staffing
• BrightStar is one of the Top 10 Franchises for 2011, and has been recognized by Entrepreneur Magazine on the Franchise 500 list for 2011, Fastest Growing Franchises list for 2011 and America's Top Global Franchises list for 2011

2. HOODZ
HOODZ is the Nation’s Largest Kitchen Hood Cleaning Company. Positioned in a traditionally “mom & pop” industry, HOODZ is a name poised to become synonymous with “hood cleaning”. They started franchising in July 2009 and had 150 franchised locations by December 2010. The parent company is Belfor (the largest restoration company in the world). HOODZ is on this list because:

• Kitchen Hood Cleaning and its vast array of ancillary services is a REQUIRED NECESSITY (by law) for every Restaurant, Hospital, Hotel, University, Public School, Grocery Store, Nursing Home, etc. On average these institutions are cleaned 4 times a year
• HOODZ has secured national contracts, giving new franchisees immediate revenue for locations in their territory
• All products are "green"

3. Money Mailer
Money Mailer franchisees run their own local marketing consulting companies.  They help local businesses succeed by providing integrated direct mail, online and mobile marketing solutions that help business owners target and retain more of the right customers.  Franchisees do the consulting, Money Mailer does the rest. Money Mailer franchisees must have 5+ years of direct sales experience. They are on this list because:

• Coupon redemption is up 27%, but business owners lack time and expertise to implement online and mobile options
• Money Mailer is offering $20k in 1st year start incentives

4. Tutor Doctor
Since the late 90s, the supplemental educational services industry has grown at a compound annual rate of nearly 12%, and the for-profit tutoring industry has grown by double digits nationally. Tutor Doctor offers tutoring programs for children from kindergarten to college level and incorporates an understanding of all learning types. Tutoring is done at home or through their E-Learning System by college students and teachers (not the franchisee). Tutor Doctor is on this list because:

• Tutoring at home offers many advantages over the traditional learning centers, as tutors are working one on one with the student, focusing on their particular needs and challenges rather than the typical group setting with standardized curricula used by conventional learning centers
• Tutor Doctor's sophisticated CRM system helps franchisees manage and grow the business
• Tutor Doctor franchisees convert on average 7 out of 10 in-home consultations 

5. WSI
WSI is one of the most sought after franchises in the world! WSI stands for “We Simplify the Internet” and capitalizes on the explosive demand from small and medium sized businesses for effective Digital Marketing Solutions. They train their franchisees to be Certified Digital Marketing Consultants. WSI Production Centers handle all the technical and development work, which frees up the franchisees' time to develop long term business relationships with clients, resulting in substantial potential for recurring revenue.  WSI is on this list because:

• WSI has been the #1 Internet and Technology Franchise on the Entrepreneur 500 list for 10 years in a row
• In 2009, over $20.3 Billion was spent on Internet advertising. In the 21st century, all businesses big and small, need a good Internet presence to be successful and WSI provides affordable, high quality websites that bring qualified traffic and convert visitors into customers
• WSI franchisees help their clients move from converting just 2-3% of visitors on average to over 16%!

Contact Meta-Franchise Consulting to learn more about these Top 5 Franchises for Sales Executives.

Top 5 Franchises for the Passive Franchise Owner

Starting a business is a scary proposition and a lot of people do not want to quit their job until they feel confident they can make money running their franchise. Whether you want to hire a general manager or work on your franchise part time, you will be looking for a franchise that allows a passive investor. Here are my picks for the Top 5 Franchises for the Passive Franchise Owner:

1. Doc Popcorn
Doc Popcorn built their organization around one of America's most popular and enjoyable snacks. Add in their proprietary blends of all natural delicious flavors and ingredients, and we are talking about a smile that goes ear to ear. Healthy and Natural, Doc Popcorn fills a unique niche in high traffic venues such as malls, stadiums and events including farmer markets, art festivals and any/all sporting activities. Doc Popcorn has several business models ranging from approximately $50K-150K. They have developed a scalable, profitable, simple business model that is ideal for an individual (or family) that is looking for an opportunity to take control of their life and finances.

2. Gamin Ride
Gamin' Ride is an entertainment theater on wheels. The adventure rolls up to doorsteps hosting events from birthday parties and corporate functions to community and fundraising events around town. Gamin' Ride is an affordable alternative to traditional parties offering something new and exciting. Best of all, it's all held in the convenience of the host's own location. Their air-conditioned and heated unit has the latest and greatest gaming systems such as XBOX 360, PlayStation 3 and Nintendo Wii. All of the events are hosted by a Game Guru who brings all participants together regardless of skill level.

3. Great Clips
Great Clips, headquartered in Minneapolis, MN, is the largest single salon brand in the $50+ Billion-a-year hair care industry. It is also one of the fastest growing franchise companies in the United States. Established in 1982, Great Clips has perfected a system for delivering high quality haircuts and perms to the entire family in a convenient no-appointment environment. Today, with over 2300 salons and new salons opening almost every business day, Great Clips is well positioned to reach their goal of becoming clearly the #1 hair care brand. Here's an interesting tid bit: On December 22, 2010 Great Clips announced their 100th new franchisee for the year.  Not bad in a stalled economy!

4. LaVida Massage
The fastest growing segment in business today is the Health & Wellness industry. Did you know that Americans indulge more today on anti-aging and health products than ever before? In fact consumers (especially aging baby boomers) spend over 6 billion dollars on massage therapy each year! Research shows that since 1988, the number of Americans relying on the benefits of massage therapy has doubled. Therapy by massage is now recognized as a legitimate medical treatment. The awareness of the effects of stress through everyday events and the link between stress and disease is extraordinary.

5. Pack and Ship Specialists (PASS)
PASS is a family business, run by Mike who opened his first store in 1981 and his daughter. Since licensing the concept in 1984, they have opened over 900 locations. PASS is different than other pack and ship concepts because they do NOT charge a royalty or advertising fee, saving business owners 7% of gross sales a year, on average. The other thing that makes PASS different is their product mix. Licensees, with help from corporate, figure out the product mix that will work best for their location. Sign making, inkjet cartridge refill, digital photo processing, and mailbox rentals are just a couple of things PASS licensees can choose from in addition to standard packaging and shipping services.

Meta-Franchise Consulting can help you determine whether a passive franchise investment is right for you, and which opportunity best meets your other requirements.

Top 5 Recession-Resistant Franchises

One of the most common statements I hear from clients is "I want a business that will be successful." Of course success means different things to different people and there are no guarantees in business. However, aspiring business owners can mitigate some risk of business ownership through owning a franchise, and owning one that time has proven to be recession-resistant.

The following 5 franchises, in alphabetical order, are my picks for the Top 5 Recession-Resistant Franchises:

1. Liberty Tax Service
As the saying goes, there are two certainties in life: death and taxes.  Every year, by April 15th, most Americans have to file a tax return.  Liberty Tax franchisees work on the business, not in the business, and do not need a background in accounting or tax law. Liberty Tax is on the list because:

• They were #21 on the 2011 Franchise 500 Rankings, the highest rated tax preparation franchise
• During the challenging economic times of the last 3 years, they have added over 1,000 retail locations
• For 8 years in a row, Liberty Tax Service has grown by more returns than H&R Block and Jackson Hewitt...COMBINED!

2. Meineke
Automotive aftermarket maintenance and repair is a $275 Billion a year industry and the "do it for me section" of the industry is $150 Billion. Meineke franchisees do not work on cars and do not need auto industry experience. They concentrate on running the business. The Meineke real estate team can help you find and convert and independent garage so you can started for a lower cost. Meineke is on the list because:

• Every year the number of cars on the road grows, and the average age of those cars is getting older
• Meineke is recognized by 95% of the US adult population, driven by National TV commercials, the Meineke Car Care Bowl, and millions of direct mail pieces
• Average sales for 6 bay centers in the system is $556,000

3. Sharkey's Cuts for Kids
Sharkey's Cuts for Kids provides an unique salon that caters to children of all ages. They provide prompt service for on-the-go parents, a fun environment for children, and reasonably priced services. There are a variety of services for customers to choose from including cuts, color, up-dos, mini manicures, make-up application, and private parties. Hair care is a $55 Billion dollar a year with built in demand and a recurring customer base.  Sharkey's is on this list because:

• They are the fastest growing chain of children's salon in the country. In their first 2 years of franchising they opened 20 franchised locations and had global commitments for 235+ salons
• Children have to get their hair cut multiple times a year and even in a down economy people will spend money on their children
• Sharkey's franchisees enjoy 3 amazing revenue streams: hair care for boys and girls, birthday parties in their famous Glamour room, and specialty merchandise/party favors

4. Stratus Building Solutions
Stratus Building Solutions Master and Unit franchisees are part of a $140 Billion commercial cleaning industry. Stratus franchisees provide their clients with a "one stop shop" for all maintenance services that include "touchless sanitization", specialty floor care, pressure washing and exterior cleaning, "green" recycling, lawn care and landscaping, pest control, energy conservation, and security/safety.  Stratus is on this list because:

• All commercial spaces must be maintained (built-in demand), and they must be maintained regularly (recurring revenue)
• They have doubled system-wide sales each year for the last 3 consecutive years ($30M, $60M, $120M)
• They were recognized as the Fastest Growing Franchise for 2011 by Entrepreneur Magazine

5. Tutoring Club

The Tutoring Club is a family-owned and operated franchise that guarantees one full grade level improvement with 32 hours of tutoring time. Using proprietary software called TutorAid, tutors create custom lesson plans and track students' progress. Franchisees work on the business, not in the business, and don't need a background in education. Tutoring Club is on this list because:

• People will always spend money on their children, and education becomes even more important in a down economy
• Tutoring Club locations are open Monday - Thursday from 12PM to 7PM so you don't have to take away time from your own children
• Since the late 90s, the supplemental educational services industry has grown at a compound annual rate of nearly 12% and the for-profit tutoring industry has grown by double digits nationally

What other franchises do you think should be on this list?

Franchising to See Stronger Growth in 2011

In my January newsletter, I highlighted the findings of the International Franchise Association Educational Foundation's 2011 edition of the annual Franchise Business Economic Outlook, prepared by PwC. If I had to highlight the report in one sentence it would be, "Franchising is poised for stronger growth in 2011."

At a high level, there are three key metrics in the report. Looking at the projected percent change from 2010 to 2011,

• The number of Franchised Establishments will increase 2.5% (compared to 0.3% last year)
• The number of jobs in Franchised Establishments will increase 2.5% (compared to 0.6% last year)
• The Economic Output of Franchised Establishments will increase 4.7% (compared to 3.4% last year)

The report looked at the three metrics across 10 franchise business lines.  Ranked by largest expected increase in Economic Output in descending order, the top 3 lines are:

• Automotive at 7.2%
• Commercial and Residential Services at 6.9%
• Personal Services (education, health, pet care at 6.5%)

So how do you use this information as an input to finding the best franchise for you? Of course we all want to be in a business that is poised for strong growth, but if the franchise doesn't fit your unique goals and requirements, then your chances of success diminish significantly. This is where Meta-Franchise Consulting can help.  Let us help you find that intersection between great franchise opportunities and your requirements.

Franchising Economic Outlook for 2011

Meta-Franchise Consulting's January newsletter is now available! Check out the information on the franchising economic outlook for 2011 and the spotlight franchise this month, Stratus Building Solutions.

SBA Loans and Franchising

It is a common misconception that the U.S. Small Business Administration (SBA) loans money to potential franchisees. Instead of loaning the money, the SBA provides a loan guarantee. If your loan application looks too risky to a bank for a traditional loan, you may apply for an SBA loan through an SBA approved lender. The SBA has approved these lenders and loans made by these lenders will be guaranteed (up to 80%) so your loan application looks less risky to the lending institution.

There are many benefits to an SBA guaranteed loan. Those benefits include:

• Lower capital requirements
• No points or balloon payments
• Longer amortization periods
• Increased loan-to-value financing

Just like banks are pre-approved to be SBA lenders, franchises can be registered with the SBA. The registry is not an endorsement of a franchise by the SBA. Additionally, a franchise not listed on the registry can still be eligible for an SBA guaranteed loan. To be listed on the registry, a franchise must provide the SBA with a copy of the franchise agreement which the SBA will review. Once approved and listed on the registry, the turnaround time and paperwork required are reduced for a potential franchisee.

Need more information on the SBA loan process? Contact Meta-Franchise Consulting.