How Franchises Keep on Growing
Printed in USA Today
by Nancy Rathbun Scott
Country Clutter sells items with a down-home, warm 'n fuzzy feel. The franchise company's marketing approach makes customers feel right at home, too. "We do things that even large corporations don't do," says CEO Ken Petersen. "We send thank-you cards out to our customers on a weekly basis. We track their birthdays and send what we call a 'Bearthday' card, which tells customers we have a special gift for them in the store. People that are shopping here love the store, so we're constantly communicating with them."
High-touch marketing approaches like these have helped Country Clutter grow customer loyalty and sell franchises. But this company isn't resting on any laurels. Instead, it's blooming outward. The first offshoot was a related specialty franchise called Christmas Clutter. "We feel we're qualified because we've been a franchisor for so many years and because we've been buying Christmas for our Country Clutter stores since 1990," says Petersen.
The company expects to open 50 Christmas Clutter stores this year. Meanwhile, corporate expansion plans have the Christmas forest growing denser yet. This year, would-be franchise owners can opt for Santa's Clauset, a new, seasonal, turnkey franchise that's open only from October until the end of the holiday season. "We feel we really know the market and we have it down, as far as franchising goes. Santa's Clauset will let somebody get into a Christmas store for a few months, during the height of the season. We provide the franchisee with a grand opening kit and a grand closing kit. A totally inexperienced person can run it."
Branching out is only one way to make a franchise grow. Other companies have penetrated new markets, taken clever advantage of social trends, successfully tested and introduced fresh new products, or simply worked to dominate a niche market.
Expanding into new markets
Sandler Systems, the corporate trainer with 175 franchise owners, has beefed up its offering with the introduction of a strategic sales management program. Aimed at corporate executives who want to build an organization that sells, the program differs from training programs offered in the past, says Jim Martin, Sandler's executive vice-president and CEO.
"People have been asking us for years to come up with a next-level strategic sales management type program. Growing numbers of corporations are recognizing their need for ongoing training of corporate employees. The three-module program covers general-as well as sales-management, including 140 hours of curriculum based on the Adult Learning Model.
Conrad Helms, franchise development manager for Norrell Services, Inc. echoes a franchise company's need to adapt to the marketplace. "Thirty years ago, we were focused pretty much on traditional temporary help, meeting a tactical need with a limited range of skills. Over time, more and more businesses have looked to staffing companies to help them run different parts of their organization. We've found that it's a tremendous asset to have proactive, rather than reactive, solutions for businesses."
Helms believes that's why Norrell has consistently outpaced the rapidly growing employment industry. "Our unique marketing position is created and maintained by 'Strategic Workforce Management.' We offer a very complete spectrum of services: everything from traditional temporary help, through managed staffing, through professional services, through out-sourcing services."
As a one-stop provider for all human resource needs, Norrell franchisees can strategize as partners with-rather than vendors to-client companies, says Helms. "Our ability to develop those kinds of relationships with clients unlocks the doors to new markets."
Eyeing social trends in flux
Kinderdance International grows its franchise by moving to the rhythm of social trends in childcare. A leader in developmental dance and movement programs for children three to eight years old since 1985, Kinderdance recently launched Kindertots, a program for two-year-olds. "The parents and childcare professionals saw the need for a program for two-year-olds, prompting Kinderdance to do the necessary research and development to create one," says Jerry Perch, Kinderdance's, vice president of sales and marketing. "Parents are impressed with the results, especially since the program is taught without parental participation."
That's not the only tune that has Kinderdance tapping into success. Its new Kindercombo program for school-age children swings right into the growing need for after-school programs. Kinderdance and Kindergym programs taught by fully trained and certified franchisees in kindergarten locations satisfy the demands of the growing numbers of working parents for quality programs for children after school. Kinderdance president and creator Carol Kay Harsell is moving rapidly to train Kinderdance franchisees to capitalize on the growing market.
Pearle Vision also focuses 20-20 sight on social trends and growing markets. The optical company has hooked up with managed health care organizations to service prescriptions for their patients. Todd Murray, Pearle Vision's vice-president of franchising says franchise growth has picked up since Cole National took over Pearle Vision in 1996. "With 340 locations right now, we anticipate adding 30-40 locations this year."
Feeding the growing hunger for fresh new products
Mike Kiick calls the whole concept "larger than life." He's talking about Frozen Fusion Fruit Smoothies, the new health drink that goes down easy, but not fast. "Trends in America have changed dramatically," says the vice president of franchise expansion for the Scottsdale-based franchise. "People want to eat healthier, delicious, snack items. But some people see our product as a meal alternative because it takes 20 minutes to drink, if not longer." With America's hunger for a new taste, Kiick expects Smoothies to blast across the landscape of malls, airports, downtown areas and other spots where people buy on impulse.
Profiting through diversification
How do you ease several cooperatively-linked retail stores into one market location? "Diversify," says Debby Robinson, corporate communications manager for TruServ Corporation, the cooperative parent of TrueValue, ServiStar and Coast to Coast Hardware Stores. "Our flexible program design enables a member to adapt their store to their local market," Robinson says. "So if you want to start a member store in a small town in Iowa where there already is a good lumberyard, you can design your store to boast a strong department in hardware, paint, or plumbing." The plans works because, for instance, a ServiStar may have a bigger lumber yard, while a TrueValue has a bigger functional hardware department or paint shop. By catering to niche markets in the same industry, both concepts can profit in the same market.
Finding your own niche
"If you want to grow, find your niche" might be the advice coming from Quizno's Classic Subs, with 335 restaurants in 35 states, Puerto Rico and Vancouver, Canada. "We're growing because our food product is distinctive, as sub sandwiches go," says Sue Hoover, Quizno's senior vice president of marketing. "People love our food. We use a higher quality of meat and cheese than our competitors and use two to three times as much of it to build a sub. With our proprietary recipes and freshly baked soft Italian bread, it's the greatest sandwich you are ever going to get." Spicing Quizno's growth is a menu responsive to changing diet and food habits, including vegetarian offerings, as well as soups and salads that parallel the sandwich menu.
Pet Value International, Inc. is another company that serves a niche-in this case the small-town market. "Our store concept lends itself to a smaller market," says David Wheat, vice president of franchise development. "Our franchisees in small towns tend to do very well and obtain a much higher market share than stores in the larger metropolitan areas where there are more competitors." With 210 franchise stores in Canada and two in small cities in Pennsylvania, the neatly packaged Pet Value franchise is barking up the right tree. "We thrive in areas where our competitors wouldn't have enough business to cover the kind of rent they have to pay, given the size of their operation."
Grow Slow, Grow Right
"The Goddard School for Early Childhood Education just launched a nationwide expansion drive to triple the number of its franchised schools in three years," says Phil Schumacher, Goddard's general manager. With 45 schools open and another 20 scheduled to open this year and then 60 in 1999, Goddard is poised to take advantage of the growing demand for high-quality childcare and preschools. But this company is in no great rush.
"We spent the first six or seven years getting the kinks worked out and everything set so we could do this expansion with everything in place. Because of the sensitive nature of our product-a school for people's children-Goddard board chairman Tony Martino, an experienced franchisor, wanted to be sure that we expanded at a controlled growth rate."
To thoroughly test its concept, Goddard-which began franchising in 1991-began by concentrating energy in the mid-Atlantic states, not far from corporate headquarters in King of Prussia, Pennyslvania. Expansion moved cautiously, as the company determined how well it could support more distant locations in the Midwest. "We opened several schools in Cincinnati, which turned out to be a great test market. Now we have seven successful schools in one of the more conservative markets in the U.S.," says Schumacher. Goddard plays on its upscale product appeal by strategically basing its childcare centers in new buildings in middle to upper-middle income areas.
Goddard is now confident it can consistently provide more than 100 children-aged from six weeks to six years-a caring, nurturing, fun-loving environment in centers throughout the country. Every classroom is staffed with a four-year degreed teacher and parents receive a daily written report about their child. "We're very strong and growing quickly in the North Carolina and Atlanta areas, for instance, and we have franchisees all over the country," says Schumacher. "We have close to 100 who are waiting for schools to open."
To speed the process of securing sites for the 100 franchise owners on its waiting list, Goddard has dramatically expanded its real estate department and doubled its operations department staff. The point is to ensure that existing owners don't suffer from the growth. "It takes 12 to 18 months to open a school, but the other side of that coin is that we have been very successful and we've had no failures because everything's done properly," says Schumacher. One-third of Goddard's existing franchisees have bought second centers already.
While its current emphasis is on opening schools for franchise purchasers on the waiting list, the childcare franchise still has its eye on future expansion. Two years from now Schumacher expects 75 Goddard school openings a year.

® copyright 1999 Nancy Rathbun Scott
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