Getting Engaged at the Franchise Expo
Printed in USA Today
by Nancy Rathbun Scott
Major franchise companies cruise for partners along many avenues. But for most, the upcoming International Franchise Expo in Washington, D.C., heads the opportunity to connect with serious investors.
"Shows that focus on franchising are the most legitimate way for investors to investigate. The IFE in Washington, D.C. is one of the finest," says Art Mancino, vice president of new business at Blimpie International, Inc.
Mancino's not lumping all expositions into the IFE league, either. "Various business opportunity shows are hit and miss," he says. "Most of the big names in franchising don't even go to the smaller shows. But at a national show like IFE, there are lots of different players and the best quality opportunities."
Greg Longe, vice president of franchise development worldwide at Ziebart International, agrees. "I think this is a great way to buy a franchise. There's nowhere else to go where you can meet so many players from the industry in one room, where an investor can look companies over to see how they conduct themselves. The IFE is the most expensive trade show a franchisor can go to, but it's worth it. We've attended many times."
What makes the IFE stand apart? Rick Brunsman is director of marketing of Blenheim, division of Miller Freeman, which organizes the upcoming three-day event. "IFE enables you to do six months of work in three days. The educational opportunities-symposia and workshops-help you decide what to look for, what questions to ask. You can hook up with franchise attorneys and accountants, as well as speak to key individuals in the company."
What to Expect at IFE
The IFE, now in its sixth year, is a very big show. Between 300 and 350 companies exhibit and about 20,000 people from fifty states and 81 countries are expected to walk the miles of carpeted floor at the Washington Convention Center, April 25-27.
Art Mancino advises earnest investors to arrive when the show opens on Friday. "At a big show like the IFE, booths at the popular brands will be crowded. If you plan to visit those booths, put them at the top of your priority list and get there early."
Initially booths are staffed up, he says, but meetings and time commitments crop up as the show progresses. "The players are doing other things by the end of the first day. Blimpie may be meeting with other franchise company reps, for example. So make sure you deal with brands by priority."
On the educational side, the IFE offers extensive symposia. Five paid programs will cover such topics as the "A's to Z's of Buying a Franchise" moderated by the president of the world's largest franchise development and consulting firm, Francorp, International. Space is limited so attendees should pre-register for the full-day symposia, which are scheduled for Friday, the first day of the IFE. Fees vary from $150 to $400. "Last year three of the five symposia were sold out," Brunsman notes.
The IFE also offers free seminars and workshops that provide basic education, but without all the detail.

Prepare To Be Impressed
The IFE spans a lot of ground, so map your journey, says Brunsman. "You need to decide how much you want to invest and what business would make you happy."
He suggests using the show directory, which comes in the preregistration packet and breaks down the various franchise opportunities by investment range and business category. "The various symposia can help considerably with the self-evaluation process. International visitors also can find out which companies want to export their system and where those companies want to go. "
Greg Longe thinks attendees should plan on attending at least two of the three days. "The IFE is a little overwhelming when you walk in and see all those brands you've been aware of as a consumer. Some people might come with a preconceived notion, 'I want to be an auto or fast food franchise owner,' but try to open your eyes. The IFE should provoke thought."
A day-by-day game plan helps. "On day one, you should mainly gather information. You might have brief discussions with companies that interest you, but mostly you want to go back to your hotel or home and spend some time looking, without distraction, at the information you've gathered. Try to prioritize your interest into the top three franchises. On the second day, go back and have a face-to-face meeting with company representatives. Have your list of questions-like 'How long have you been in business?'- prepared. You should also find out the location of the store closest to where you want to be in business. That way, you can go there, take a look, touch and feel the concept to validate that it will work in that region of the country."
Art Mancino says do your homework. "Two types of people generally come through a trade show: tire kickers and serious buyers. Serious shoppers typically have read a handbook on franchising, like the one the International Franchise Association publishes, so they know the names of key contacts at the company and who to look for. At the least, people coming through should know a little about how franchising works. This is different from a business opportunity show, where the company wants you to invest within seven days. A franchising show is about sharing information; it's a process that can take from a month to two years to complete, normally about three to six months."
What Do Franchisors Look For in Buyers
"The biggest growth we've seen has been dictated by that large part of corporate America who is looking to buy a franchise with a business services aspect," says Brunsman. "Fast food, whether specialty or full-blown, million dollar restaurants, is always a strong area. But, today, people with a sales/marketing/management background are driving the biggest growth. Many of these opportunities don't require any blue-collar work, but do require skills in those areas."
Ziebart, an auto-aftermarket concept that sells a variety of products and services to new and used car owners, initially looks for three things in a prospect, says Greg Longe. "We want to determine if the market they are interested in is available. We want to know whether they can open in six to 12 months. And we need to know whether they have the necessary capital [$60,000 in liquid assets]. Later we'll take a look at such qualities as coachability and attitude."
Philip Schumacher, director of center development, at the Goddard Schools for Early Childhood Education, says his company exhibited at the IFE for the first time last year and sold four franchises. "People who come to us are looking for a clean buy that fits into their lifestyle and makes a positive contribution to the community."
Goddard School owners don't work nights or weekends, says Schumacher, and the business requires no inventory. Also, unlike some franchises that require the owner to be on site working at the business, Goddard will allow one co-owner to be a passive investor. Franchising since 1988, Goddard now has 33 schools, primarily in the mid-Atlantic region. In January, the company began franchising nationwide and is now actively seeking franchise owners in Dallas, Houston and Denver. "Lots of the people interested in Goddard are young professionals with small children who have not been happy with traditional day care arrangements. The people who come by the booth are looking for a service business, particularly one with child-related service. And, we've had no failures," Schumacher notes.
Should You Discount the Little Guys?
With well over 300 companies exhibiting at IFE, not everyone will be as big as McDonalds. Suppose a company is relatively new to franchising. Does that remove the novice from the franchise playing field?
"That would depend on how aggressive an investor you are," Longe says. "A brand new franchisor is not for the weak of heart. If the concept being franchised is new, it's a good idea to determine how committed the principals are to the long-term growth of the company. You'd certainly want to look closely at the offering circular and the financials. You'll have to be ready to grow with the franchisor. Of course it can work. Look at a company like Boston Chicken,which has grown so fast. People that jumped on that thing are pretty serious mavericks."
Even some newer companies can boast heavy experience in franchising. Anthony Martino, founder and president of the veteran MAACO auto painting franchise, for instance, is partner with Joseph Scandone, in the Goddard School. Such behind-the-scenes management strength gives the newer enterprise long-term franchising expertise upon which to draw.
What's Going To Happen?
Franchise marriages aren't likely to consummate at the IFE, say veteran exhibitors. Instead, think of the Expo as a first date. When somebody drops by the Ziebart booth, for example, they are given information to look over and told they will be contacted within the next few days. Greg Longe says Ziebart staff plans to stay in the nation's capitol for several days to follow-up with serious prospects. "At the show, buyers seek and receive preliminary information. They leave off their name and address, to receive a more complete follow-up package. They then provide more information to the company. In exchange, they receive the UFOC [Uniform Franchise Offering Circular]. From there, the process typically leads to a personal meeting, maybe a trip to headquarters, then an agreement."
Which is not to say that sales don't happen as a direct result of trade shows. Subway restaurants, with over 12,600 franchises in 58 countries, has found that trade show marketing works. "Since October of 1996, we've sold 31 new franchises through various trade shows," says Subway's director of public relations, Michele Klotzer.
How good will the April franchising show be? Don DeBolt, president of the International Franchise Association which co-sponsors IFE, says imitation is the highest form of flattery. "The IFE has been such a successful event for everyone-a real win/win-that, for the first time in history, we're having another IFE at the Los Angeles Convention Center, September 5-7. One of the reasons it's been necessary to have a twin expo is that our international participation-particularly from the Pacific rim-has been increasing dramatically. For people coming from Asia, the west coast gets around two big obstacles to attendance: time and money."
Quick Tips
Don DeBolt, president of the International Franchise Association, which is co-sponsoring the April event, offers the following six tips for getting the most from the International Franchise Expo.
1. Register in advance. Call 201/461-1220 to receive a pre-registration kit. To hear a recorded message about the IFE, call 800/649-4433.
2. Review the exhibitor list in the pre-registration kit and devise a walk-through plan.
3. Attend an educational workshop or two. Any of the five, all-day symposia, ranging in price from $150 to $400, require pre-registration. An array of free seminars and workshops also is available with paid admission.
4. Do some advance research. Call IFA at 202/628-8000 to order a catalog of publications related to franchising; or visit the association's website at to download a copy of answers to frequently asked questions about franchising, gather information about IFA member companies, etc.
5. Prepare a list of questions to ask, including:
How long have you been in business?
How long have you been franchising?
How many company-owned units do you have?
How many franchised units do you have?
How many people have left your system?
Is the founder still active in the system and if not, why?
What is the location of the store nearest to where I plan to open?
6. Spend some time gauging the chemistry between you and the company reps at your top three franchise choices.
An Independent Spirit Buys Into Franchising
Robert Bolduc is an independent gasoline marketer from Springfield, Massachusetts, who owns 23 service stations. He also has four Subway sandwich stops, all of which opened within the last 24 months. As a business person with plenty of experience, he might seem a natural for franchising. But hooking up with somebody else wasn't so natural for this maverick entrepreneur. "I happen to be an independent-minded person, a hold-out in that I'm still an independent gasoline marketer. So for someone like me, franchising was the last thing on my mind."
Bolduc launched his franchise investment at a trade show when he heard a colleague describe the merits of affiliating with a big name franchisor. "The gasoline industry is going through a metamorphosis, aligning with fast food restaurants," he says. "At the show, I heard another gasoline marketer talk about fast food branding. He said two things-that now was the time to do it; and to align with a national company as opposed to doing it yourself."
Bolduc already knew Subway was the company he wanted to go with and he stopped by the booth where Subway reps were exhibiting. Bolduc was impressed with how readily the Subway system could enter his market and he liked doing business with a proven brand. The transition was easy. With a convenience store already in place in his first gas station, Bolduc simply remodeled and set up the Subway franchise as a separate profit center, with it's own manager and set of paperwork.
Since that first opening, Bolduc has put three more stores in his stations. This month, he'll open his first free-standing Subway, a previously-owned unit located in a neighborhood.
As an independent gasoline marketer joint developing with a fast food franchisor, Bolduc acknowledges that he's a novel breed of franchise owner. But he believes that every entrepreneur shares a similar urge to be the boss. "Some individuals coming into franchising are coming out of jobs. They might have their own problems because they bring a big company mentality with them. Other people may come to franchising from previous business failures. Ninety-five percent of small businesses fail, but even when people fail five times, some will keep coming back to their own businesses because that's what they want to do. And that's what makes America great."

® copyright 1999 Nancy Rathbun Scott
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