Franchise Frenzy

For investors with entrepreneurial tendencies – and a willingness, at least to some degree – to roll up their sleeves and get to work, buying into franchises might be the right fit. While franchises come with significant startup costs – and sometimes, royalty fees, the payoff can come not only in money, but also in the satisfaction of business ownership.

Leaders at Springfield Area Chamber of Commerce are in the planning process for a franchise opportunity fair, slated for early August.

Ryan Mooney, senior vice president for economic development, said the franchise fair would be the first event of its kind for the chamber, though details such as the date, venue and number of franchisors expected are still to be determined.

Rather than a response to local economic or population changes or companies’ inquiries, the event is meant to support entrepreneurs and connect them with franchises, Mooney said.

“It’s more about the matchmaking effect than it is the volume,” he added, emphasizing that sincerity from both sides is the key to success for such events.

Still, Mooney acknowledged anecdotal flickers of optimism about the business climate, which he suggested would be fanned as banks become more willing to lend money as the recession recedes. Amid these signs, actual and potential franchise opportunities abound in southwest Missouri.

As chamber leaders hammer out details for the franchise fair, potential investors need not wait to explore whether franchise ownership would be a good fit for their financial plans.

But they’ll need to think about more than just the requisite startup capital that will be required, said John McKearney, a counselor with the Springfield chapter of Score-America’s Counselors to Small Business.

Unlike an investment in equities, bonds or commodities, most franchises follow the owner-operator model that requires the franchisee to work in the business, so time commitment also should be investigated, McKearney said.

He recalled one client who decided not to pursue a restaurant franchise after learning that owner-operators typically were required to work five or six days a week and spend the seventh doing administrative work at home.

Some franchisees, however, are fine with pouring myriad hours into a franchise. Lyle Armstrong, who with his wife, Natalie, owns two Which Wich locations in Springfield, works 60 to 75 hours a week at the restaurants and from his Branson home.

“I want a presence in our business,” said Armstrong, who noted startup costs were in the $300,000 to $400,000 range.

Armstrong, who holds finance and accounting degrees from Missouri State University, bought his first franchise in 2009 after operating a family business focused on retail building materials – a gig that solidified his hands-on approach to business.

In contrast, Brian Addotta worked for 25 years in the nuclear power industry before he bought his first Culver’s at Osage Beach in 2005. He thought he had a tough schedule working in radiation safety at the plant in Byron, Ill., but he admits the transition was challenging.

“It was like shell shock,” Addotta said. “In the first six months in the restaurant business, there were many days when I wondered what I got myself into and why.” He toughed it out, and with his son, he now owns a restaurant in Webb City and will open Springfield’s second Culver’s later this month. He works a manageable 40 to 50 hours a week, he said.

On the lower end of the time-commitment scale, Texas-based Sport Clips is modeled as a part-time business, founder Gordon Logan said. The franchisee’s main role is to hire and coach a manager to develop a team. In addition to working directly with the manager, the franchisee must perform administrative work at home, network with local businesses, and engage in neighborhood marketing to get the word out about the store, Logan said, with a total estimated workweek of 10 hours. The company is targeting several of Springfield’s bedroom communities.

Here’s a quick rundown of franchises that are  seeking local franchisees:

Dunkin’ Donuts
Taking a high-profile approach with local advertising, Dunkin’ Donuts, the Massachussetts-based quick-service purveyor of pastries and coffee, is actively seeking candidates willing to open five locations in the Springfield area, four in Columbia/Jefferson City and three in Joplin.

Dunkin’ Donuts had a presence in Springfield in the 1980s, but agreements expired with those franchisees and were not renewed, said Grant Benson, Dunkin’ Donuts vice president of franchising and market planning. Since then, the company has found that the practice of sprinkling stores one at a time in various locations is not as effective as the current strategy of opening multiple stores in a single market, properly located in strong trade areas, he said.

“Missouri is ripe for development. The demand is there from the consumer perspective,” said Benson. “We think we fit well in that wholesome Midwestern demographic.” He pointed to reasonable real estate costs as an added attraction to the region and said the five Springfield locations would be built in roughly six years.

“Springfield is a market with more than a million people in it. It’s not a small opportunity,” Benson said.

Mad Dogs British Pub
The British-themed sports bar with kilt-wearing servers targeted Springfield in early April as part of a plan to expand throughout Missouri. CEO Terry Corless said the company’s marketing department found Missouri’s demographics suited the franchise.

To publicize expansion plans, the San Antonio, Texas-based company contacts news media and places Internet ads and releases, Corless said.

That leads to a more in-depth, more structured networking process to get to the people we need to reach,” he said.

PotBelly Sandwich Works
The Chicago-based sandwich shop targeted Springfield in early 2010 as part of an expansion plan but has not located a buyer yet, Franchise Zone Manager Mike Walters said.

Wood Re New
The Springfield-based exterior wood cleaning company has the Lake of the Ozarks territory open, founder and CEO Stan Krempges said.

Krempges said he’s seeing a national surge in activity for new franchises. Two Wood Re New locations are opening in Austin, Texas, and one each in Detroit and Hendersonville, N.C., he said, with prospective interest in Nashville and Knoxville, Tenn., Denver, Corpus Christi, Texas, and in New Jersey.

Culver’s
Though Springfield’s second Culver’s eatery is slated to open in May at Interstate 44 and U.S. 65, the Prairie du Sac, Wis.-based franchise is open to expansion in Missouri.

“Between Joplin, Springfield and Kansas City, there’s a pretty big area that we can build on,” said Tom Goldsmith, director of franchise development.  

Outdoor Living Brands
Based in Richmond, Va., the company offers three businesses as franchises: Archadeck (deck building); Mosquito Squad (mosquito and tick control); and Outdoor Lighting Perspectives (landscape lighting design, installation and service). The latter two franchises would be suitable for southwest Missouri, CEO Chris Grandpre said. The businesses are well suited as add-ons for contractors in related fields who wish to diversify, he said.

Sport Clips
The Georgetown, Texas-based men’s haircut company has openings in Nixa, Ozark and Branson, and founder Gordon Logan said he’s interested in additional southwest Missouri locations.

Title Boxing Club
The Overland Park, Kan.-based boxing-workout gym is in its 12th month of franchising, said Danny Campbell, co-founder and managing partner.

“I’ve always thought Springfield would be an ideal spot,” said Campbell, who once called another Missouri town, Theodosia, home. Seven clubs are located in the Kansas City area, one in St. Louis and two in Columbus, Ohio.[[In-content Ad]]