Nancy Rathbun Scott

Strong Franchisors Lend Hefty Support
Printed in USA Today
by Nancy Rathbun Scott

Bike Line aims to become the nation's largest chain of bike stores. Franchising since 1991, the company currently has 27 corporate and 45 franchised locations in 17 states. Bike Line's growth strategy lies in point-to-point back-up for franchise owners. From the time a prospect contacts corporate headquarters, through opening day and beyond, Bike Line works for its royalties. "Support after the store opens-that's where franchisors really earn their stripes," says Jim Palmer, director of franchise support.

Assistance starts with the initial inquiry. "When somebody calls and requests information, they receive a packet that goes into detail about the bicycle business and Bike Line. We have an 800 number where prospects can talk to a recruiter. If mutual interest develops, they are invited to corporate headquarters in Pennsylvania. They go out and see the stores. We give them a list of franchisees. They can speak to anyone they like. We're an open book, not hiding anything."

From the time the new owner signs the franchise agreement, it's a turn-key operation. "We work with a real estate firm that specializes in strip center real estate. We help the owner negotiate the lease and we're very good at it. We know what to ask for and we can get favorable terms on build-out, rent abatement and so on."

Bike Line assists with the actual build-out, too. "We have a contractor that can work in any state. They know exactly what paint, carpet, showcases and so on to use. They also know what initial inventory to order and how to set up and merchandise the store."

During build-out the franchisee attends two-weeks of training. "We show them what they need to run the business. The emphasis is on product knowledge, sales training and stores operations. Only about 20 percent of it is mechanical. We don't want them to worry about repair. The owner needs to be out, meeting the public, working with vendors, running the business.

To makes sure mechanical expertise is covered, Bike Line helps the franchise owner hire a technician. "We have set up over 30 stores and we know how to find two or three good candidates from which they can choose."

The new owner must obtain financing, but Bike Line offers plenty of support there, too. "We have a CPA comptroller on staff to help prepare the business plan. About the only thing the new owner really has to do is buy office supplies."

For the store's grand opening, a project manager is on site for five days. Meanwhile, the new owner can get help via an 800 number six days a week, ten hours a day. "We answer technical, sales and managerial questions about when to order inventory, how to manage cash flowanything."

Franchising greatly improves the owner's chance of success, says Palmer. "We steer people away from the pitfalls of a new business. We've been there and done that and we can say, 'Don't advertise there, it won't work. Don't order that, it won't sell. You have too many bikes. You have too much inventory. That guy's costing you too much."

"We also have a solid vendor program," Palmer adds. "Our corporate stores are doing $13 million per year, so we have access to favorable pricing terms, freight policies and payment terms with vendors."

Does all the help make a difference? "The average bike store in the U.S. has been in business 14 years and grosses about $350,000 a year. Our franchise stores average $330,000 the first year. Several stores are doing a half-million dollars and several are doing over one million in less than three years."

Franchisors Share Marketing Know-How
One Hour Martinizing, established in 1949, is one of the country's oldest franchise companies. Recently, the drycleaning franchisor, which has 850 units worldwide, has reenergized it franchise development focus. Thirty-five new stores opened last year.

The marketing savvy of an experienced franchisor gives new franchisees an advantage over mom 'n pop drycleaning establishments. Jerry Laesser, vice president of franchise development, explains. "We do a very good job in marketing. With targeted direct mail we can go within one, two, or three miles around a new store and, based on income level and demographics, invite prospective customers into the store."

But doesn't every drycleaner send direct mail? Not like this, says Pam Harper, marketing manager, "We have a proven direct mail piece that works, that gets people through the door."

Meanwhile, the training program for new franchise owners serves up all the elements of Marketing 101. "We cover the mediums available, what to do when you place an ad, the basics of media mix, when and why to use media-all of it. "

Good marketing is important enough that the franchisor visits local stores twice a year, just to evaluate marketing strategies. "Staff goes into the field and gives the local store a new plan every six months. We look at the store's redemption rates and results. We evaluate the marketing plan for a good mix."

Once the drycleaning customer arrives in the store, One Hour shifts marketing focus from recruitment of customers to retention. The company's highly successful VIP program relies on such personalized service as no-wait drycleaning drop-off.

Harper thinks the effort is worth it. "We're very focused on helping new owners get going and, for the first few years, they need this detailed focus. We're there with daily telephone support, regional meetings for technical training and, of course, our convention."

Turn-Key Programs Spell Success
Express Personnel Services has jumped from 13 offices and $2 million in revenue in 1985, to 300 offices and a projected revenue of $920 million this year-and every unit is franchised. "We wholeheartedly believe in franchising," says vice president of marketing and PR Linda Haneborg.

Express franchises provide temporary and full-time placement, as well as executive search. "That's three services for the price of one franchise fee," Haneborg says. In addition, the company takes advantage of other employment market trends. "Temporary employment is becoming a bridge to full-time employment. More than 40 percent of our job opportunities today are 'evaluation hires,' where a company brings somebody on board as a temp for 90 days in order to learn about them."

Besides giving franchise owners a well-developed package of services to sell, Express has come up with some creative ways to generate business. "We've designed the Get A Job seminar. It's free. Our franchise owners can present the seminar at area universities or trade and high schools."

Get A Job covers employment basics: how to write a resume, how to dress for and speak during an interview and what it means to be on time, for example. The seminars also let prospective job applicants know about Express Personnel Services.

The Get A Job kit arrives on the franchisee's doorstop ready-to-go. "They get everything they need-the Get A Job handbook, posters, an administrative kit that tells who to call at the schools and what the curriculum should be, even an interactive video." Express also supports its franchise owners with award-winning TV advertising, set to the old tune of 'Get A Job.'

"It costs us a lot in royalty fees to have that song, but everybody loves it. The price is worth it."

Support Means Innovation
Smart franchisors always look for ways to help franchise owners. That's just good business. And every now and then a new idea comes along.

"What's hot in franchising right now? Co-branding," says Tom Howell, president and CEO of ATL International.

Howell, whose parent company owns All Tune and Lube, knows what he is talking about. "We were the first automotive aftermarket company in the country to do co-branding. We developed two additional product lines-ATL Motor Max, which specializes in engine installation and replacement, and All Tune Transmissions-and offered those to current All Tune and Lube franchisees in selected markets."

The option means that a willing franchise owner can have several product brands under one roof. For those who have said 'yes,' co-branding has generated substantial increases in sales, but little increase in overhead. "And," emphasizes Howell, "we have offered the additional product lines to current owners for no additional initial license fee."

Because the program has worked so well, ATL recently took co-branding a step further, announcing a new arrangement with fellow franchisor, Cottman Transmissions, which has been in business since 1962.

The new ATL/Cottman co-branding program gives selected franchisees the right to add a Cottman franchise at their All Tune and Lube location. "Here you have two different franchisors, two different franchises, and one franchisee-all benefitting from operating under one roof."

Co-branding has been common practice in the gasoline retail and fast food markets for some time, but the automotive aftermarket has been slower to pick up on the trend. Howell considers the move cutting edge. "Our current All Tune and Lube franchise owners can add one or two additional ATL product lines-engine and/or transmission repair-or they can pick up an additional franchise through Cottman."

Under a new offering being prepared for registration, new franchise owners who opt for two or three product lines would have to pay an additional license fee for co-branded operations, of course, but Howell believes the synergy of co-branding has been economically proven. "It's incredible," he says.