Life in the diamond lane - Concerto Networks19 N/A Dream Dinners Dream Dinners, Inc. 6/1/03 97 626%...

The diamond lane —that

designated lane on major highways

that only carpoolers can use—

allows drivers who are taking

others along for the ride to travel

faster than the solo drivers, who are

often stuck in traffic. We thought

that was a fitting description of our

Fast 55. Not only are they pressing

the pedal to the medal in terms of

growing their system, but they’ve

got a clear road ahead, because

they’ve included passengers

(franchisees) on their trip.

Fast 55 Sponsors:

Life in the diamond lane:How 55 companies defy the speed limit

Fasten your seat belts

32 Franchise Times March 2007

Fast 55

Definition of the day: The Fast 55In order to make the Fast 55, a ranking of the fastest growing, young

franchises, a franchise company must meet these two criteria:

1) They must be a brand that has been franchising for five years

or less.

2) They must exhibit positive franchise unit growth for each year

during this period.

By Darrell Johnson

Keeping its cool while

experiencing very

hot growth allowed

One Hour Air

Conditioning & Heating to lead

the pack in 2006 after finishing

in second place the year before.

Its five-year average franchise

unit growth was 2,592 percent,

well ahead of Good Feet’s second

place finish of 1,703 percent.The Fast 55 is in its fourth year,

which gives us a chance to also look back at some of past speedsters. While One Hour Air Conditioning & Heating moved up from second place to first place, this year’s No. 2, Good Feet, is a first-time qualifier on the list. Of this year’s top 10, four made the list for the first time. Compared to last year, there were 28 new participants, although two of the 28 had made the list in one of the prior years.

The criteria used to select the FAST 55 were:• A franchise brand that has been franchising

for five years or less (ie. started franchising no earlier than 1/1/2001)

• Positive franchise unit growth each year

The average franchise company listed on the FAST 55 grew over 100 percent per year. For those franchising for five years, their cumulative growth average more than 600 percent. On a combined

basis, FAST 55 companies had 3,894 franchise units in place in 2006 and projected another 2,323 units for the following 12 months. If achieved, that would represent 60 percent collective growth.

From an industry perspective, health and fitness led the pack with 11 concepts on this year’s list compared to eight concepts last year. Maintenance services was in second place with six concepts, down from its co-leading eight concepts last year. Fast food increased from three concepts last year into a second place tie with six concepts this year. In all, there were 19 industry sectors represented on this year’s list with concepts in services industries dominating the list. Reflecting some broader consumer purchasing trends in the retail sector, two retail wine franchises, WineStyles (No. 20) and Vino 100 (No. 34), made the list for the first time.

Darrell Johnson is president of FRANdata.

Franchise Times FAST 55

Industry . . . . . . . . . . . . . . . . # Franchises

Travel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Sports & Recreation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2Services-General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5Security-Related. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Retail Stores . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Retail Food. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3Restaurants (Sit-Down) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Printing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Personnel Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1Maintenance Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6Health & Fitness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9Fast Food Restaurants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6Education-Related. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2Computer-Related. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3Child-Related. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2Business-Related . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5Building & Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3Beauty-Related . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2Automotive . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

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March 2007 Franchise Times 33

Fast 55

FRANdata is the franchise industry’s source for objective information and analysis. With a vast store of information about franchisors, the franchise concepts they sell, and the franchisees who invest in their units, we help with busi-ness planning, competitive analysis, and targeted marketing. Our goal is to help the franchise world make better deci-sions through information, research and analysis. To learn more about FRANdata, visit www.frandata.com or call 800.485.9570.̇

Snell & Wilmer has been providing excep-tional service to clients since 1938. With more than 400 attorneys in offices throughout the Western United States, we are one of the largest, full-service law firms in the region. Our diverse client base consists of large, publicly-traded corporations, small businesses, emerging

organizations, individuals and entrepreneurs. A number of our attorneys have extensive experience assisting clients through every stage of the franchising process, and specialize in representing concepts in the retail, restaurant/hospitality, health care, real estate, pet care and service industries from local start-ups to national and international chains. Our experience includes creating and documenting franchising, licensing and distributorship arrangements; advising clients regarding mergers and acquisitions; providing corporate and financing advice to franchise and retail chains across many industries; and assisting clients with the purchasing, leasing (ground, in-line and build-to-suit), and financing of new sites and the development and construction of such projects. For more information, visit www.swlaw.com.

’07 RANK

’06 RANK BRAND FRANCHISOR

STARTED FRANCHISING ON

2004 FRANCHISE UNITS

5 YEAR AVG FRANCHISED UNIT GROWTH %

1 2 One Hour Air Conditioning & Heating

One Hour Air Conditioning Franchising, LLC

4/1/03 147 2592%

2 N/A Good Feet Good Feet Worldwide, LLC 3/1/03 117 1703%

3 9 Certified Restoration DryCleaning Certified Restoration DryCleaning Network,

6/12/01 113 1325%

4 6 Zerorez Zerorez Franchising Systems, Inc. 1/1/03 27 1159%

5 7 N-Hance Harris Research, Inc. 5/1/03 66 1157%

6 10 Paul Mitchell Partner School, PMAE

Paul Mitchell Advanced Education, LLC

10/1/03 54 1058%

7 N/A QuikDrop QuikDrop International 6/2/03 81 1013%

8 12 Positive Changes Hypnosis Lifestyle Improvement Centers, LLC

9/1/03 43 981%

9 N/A Mathnasium Learning Centers Mathnasium Center Licensing, LLC 7/20/03 76 953%

10 N/A Butterfly Fitness/Butterfly Life/Butterfly Fitness

Butterfly Fitness, Inc. 4/18/03 43 926%

11 N/A All About Honeymoons All About Honeymoons Franchise Corporation

9/10/03 55 846%

12 15 Growth Coach G.C. Franchising Systems, Inc. 12/3/02 79 812%

13 N/A i9 Sports i9 Sports Corporation 7/29/02 30 800%

14 N/A Palm Beach Tan Palm Beach Tan Franchising, Inc. 7/26/01 47 765%

15 N/A Mobile Attic, The Mobile Attic Franchising Company, Inc.

12/3/03 33 688%

16 N/A Weathersby Guild Weathersby Guild, Inc. 1/1/03 20 677%

Fast 55 Sponsors:


Fast 55

’07 RANK





17 N/A Stroller Strides Stroller Strides, LLC 1/1/03 113 666%

18 N/A Concerto Networks Concerto Networks, Inc. 5/6/03 32 656%

19 N/A Dream Dinners Dream Dinners, Inc. 6/1/03 97 626%

20 N/A WineStyles WineStyles, Inc. 10/16/02 40 600%

21 16 Alloy Wheel Repair Specialists Wheel Repair Solutions International, Inc.

8/1/03 66 585%

22 N/A ITEX (International Trade Exchange)

ITEX Corporation 10/13/02 95 584%

23 18 Cuts Fitness for Men Cuts Fitness for Men, LLC 5/1/03 90 565%

24 N/A City Publications City Publications Franchise Group, Inc.

12/31/02 23 565%

25 17 ShapeXpress for Women ShapeXpress, Inc. 8/30/02 64 563%

26 22 Global Recruiters Global Recruiters Network, Inc. 12/5/02 86 555%

27 23 Velocity Sports Performance (unit) Velocity Sports Performance Franchise System

6/1/02 57 542%

28 26 Expense Reduction Analysts Expense Reduction Analysts, Inc. 10/7/02 38 497%

29 32 Volvo Construction Equipment Rents

Volvo Construction Equipment Rents, Inc.

7/2/01 65 451%

30 N/A Snip-Its Snip-Its Franchise Company, LLC, The

4/30/03 32 430%

31 N/A Planet Fitness Pla-Fit Franchise, LLC 2/4/03 75 426%

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Fast 55

MathnasiumPeter Markovitz, Founder and President Franchise fee: $15,500Royalty: $28 per student per monthAd fund: noneTotal investment: $70,000–$100,000

About the company: A group of education industry executives who had helped build Future Kids, a computer-skills, learning-center concept, started Mathnasium in 2002. Because of the success of Future Kids—they helped grow it into a chain which spanned 72 countries—when the company was sold they decided to launch another learning center concept that was non-competitive with Future Kids. Today, they have 130 learning centers open. The company currently opens about one center a week.

FT: What type of franchisee are you looking for?

PM: We’re looking for someone who loves the idea of teaching math to kids, and has the capability to do that well. We provide the training and a strong method, but we want a person who wants to help turn around a child—to help with a transformation and finds that exciting and fulfilling.

A lot of organizations look for area developers or someone who can build multiple locations. Our approach has been to encourage people to open one, because then we can both see what they are capable of doing. Once they know the system better, and we know more about them, we may allow them to open additional units.

FT: What has been your big win so far with this franchise?

PM: We chose a market that was underserved. There are people who say it is all about the quality of the system, but it’s also about the marketplace. We also narrowed our approach. Unlike other learning centers, we don’t cover a lot of different areas and do them well. We thought that if we chose a single subject, while we would exclude part of the market, we could put ourselves in the position of being great. We are getting far more students because we are “the math place.” And because of that, it gives our franchisees greater chance of profitability.

FT: What is one thing you would do differently, looking back on your few years franchising?

PM: I regret not forming international relationships a year ago. I identified capable candidates—people who didn’t have the money, but had the skill and capability. There is one school of thought that you should give away (no franchisee fee) the franchise to the right person internationally. And the spread sheets show that one would do much better starting (international development) sooner rather than waiting for a big fee. I would be more liberal with the terms and I might lower fees for the right person.

FT: Do you have any international locations at this time?

PM: We have a footprint in most of

Fast 55 companiesHere’s how they grew

Publisher Mary Jo

Larson takes a look

at six of our 55 to see

how they grew and

what they’ve done to

ensure their existing

franchisees continue

to succeed.

Mary Jo and Darrell

Johnson, president

of FRANdata, will

present their insights

on the Fast 55 at

Franchise Times’

Franchise Finance

& Development

conference in May.

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Fast 55

the major regional markets in the world, in order to demonstrate the validity of

the brand: Malaysia, Thailand, Brazil, Central America, Portugal, Spain and the Caribbean.

FT: How do you see your domestic franchisees financing their units?

PM: One of our incorrect assumptions when starting this was our franchisee profile. We thought this would attract people on the lower end of the income spectrum because the capital involved is on the lower end of franchises. But what we found is that we’ve attracted professionals who were from very distinguished backgrounds, such as engineers and lawyers. I’m not sure why this is—could be the math orientation. But to answer your question, these people have money. They are coming from companies like Intel or Motorola. It’s been people who think this is a meaningful investment, but it doesn’t strain them too much.

FT: What is one way your franchisee support stands out?

PM: One thing is that we took an approach to have unusually higher qualified professionals as support staff—people, for instance, with degrees from the Wharton School of Business. It’s expensive, but worth it. We would do it again, because it works.

FT: Going forward, do you have strategies to improve the business?

PM: One thing I really want to do is inspect at a much higher level than we did previously with our earlier company. I want to invest more time

in helping and giving franchisees information on what they are doing right and what they are doing wrong, relative to a standard. Not to police it, but to help them see in the dark.

Stroller StridesLisa Druxman, Founder and PresidentFranchise fee: $3,000–$5,500, depending on territory sizeRoyalty: $160–$360 a month, depending on territoryAd fund: none

Total investment: Home-based business with computer and basic office supplies costs.

About the company: In 2001, Lisa Druxman dreaded the thought of going back to work and leaving her small son in day care. During her time at home, she came up with a workout that incorporated her baby—and no doubt the stroller—and it was during one of these workouts that she had her “aha” moment. A fitness trainer for about a dozen years, she began to teach the stroller fitness class to four moms in her neighborhood and it mushroomed from there. Now, this home-based franchise business has 165 franchisees nationwide with an average of six new franchisees joining per month. Franchisees, mainly moms, conduct their classes about three times a week at parks. For those in cold weather climes, franchisees can contract with indoor soccer arenas, indoor malls and other facilities to conduct their classes.

FT: We’re guessing your typical franchisee are moms with kids. How intense is this business for them?

LD: Our franchisees report that they work about three hours a day. They are not getting rich by any means, but most of them are looking for extra income—something they can do with their kids. I thought this would be a fit for other fitness professionals, but I found out there was a market with moms.

FT: What is your training like?

LD: We offer training at our San Diego headquarters every month. But for those who can’t travel—these are moms with young kids—we offer online training and Microsoft Live Meeting, with each corporate staff member adding something new to learn at these meetings.

FT: How has your support changed over the last few years?

LD: There is a night and day difference between our support now and when we started. We have 12 staff members with their own area of expertise who bring something different to the table for our live meetings with franchisees. Everyone learns differently, so for those who are readers, we have manuals and years worth of newsletters with ideas to help their business. For those who like online learning, we have a Web-based portal with video clips of fitness training ideas. It is very easy to get what they are lacking.

FT: What is the best thing you’ve done lately for the business?

LD: No doubt it was when we added the Franchisee Intensive, a three-day training seminar offered at headquarters every other month. We teach fitness classes to the franchisees, we have them

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Update Cuts Fitness for Men—No. 23 on this year’s Fast 55 list—was

profiled last year when it was ranked No. 18. But, we thought it was worth revisiting since the chain has a book coming out in early May: “Cuts Fitness For Men: The Ultimate 30 Minute

Workout.” The book is being published by Putnam, and Dr. Mehmet Oz, author of

“You: On a Diet,” a NY Times bestseller, and a frequent guest on “Oprah,” wrote the book’s forward. “Cuts Fitness For Men” is a 101-primer that covers the Cuts’ workout at the studio, at home and on the road, according to Steven Hasse, managing director of the franchise.


Fast 55

’07 RANK





32 36 Massage Envy Massage Envy Limited, LLC 2/1/03 71 426%

33 51 FiltaFry Filta Group, Inc., The 10/1/02 63 401%

34 N/A Vino 100 Vino 100, LLC 10/1/03 29 389%

35 44 Anytime Fitness Anytime Fitness, Inc. 10/1/02 147 382%

36 40 Benjamin Franklin Plumbing Benjamin Franklin Franchising, LLC

9/1/01 167 377%

37 35 Pizza Patrón Pizza Patrón, Inc. 11/1/02 48 374%

38 N/A Five Guys Burgers Five Guys Enterprises, LLC 11/7/02 68 356%

39 41 Gandolfo’s DeliBoys Gandolfo’s Deliboys, LLC 2/5/03 55 352%

40 42 AllOver Media AllOver Media Franchising, Inc. 9/27/02 25 345%

41 N/A Mama Fu’s Noodle House Mama Fu’s Noodle House, Inc. 1/31/03 23 343%

42 50 Geeks on Call Geeks on Call America, Inc. 9/1/01 281 336%

43 38 Lyons & Wolivar Investigations Lyons & Wolivar, Inc. 9/11/02 30 335%

44 N/A Soft-Temps Worldwide Computer Services

Soft-Temps Corporation 3/24/99 29 328%

45 39 Nothing But Noodles Noodles Development, L.P. 3/1/02 33 327%

46 N/A ACFN ACFN Franchised, Inc. 12/1/02 37 321%

47 53 KidzArt KidzArt Texas, LLC 7/1/02 52 295%

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teach classes—we give them feedback. Probably 60 to 70 percent of the franchisees have

gone through it. For them, it is kind of like coming to Mecca.

We’ve also added our Fit for Mom franchisee convention. More than half the franchisees come to that. If they come once, they repeat it. They learn so much from each other. It is the most

touchy-feely business. So many of the conversa-tions are about balancing work with motherhood. We have unique issues we deal with. They want to get everything done, but can’t always do it.

FT: What is the biggest challenge you face as a franchisor?

LD: Let me say that I am a huge advocate for franchisees, but I am not a huge advocate of being a franchisor. When you become a franchisor, you

are learning an entirely new business. You have to figure out the best methods for replicating your business. That part saddens me a bit—the amount of time I spend learning about the regulations, the laws—when I could be devoting that time to the vision of the business. Eventually we’ll get a CEO or a COO who will focus on the franchise operations.

FT: Then what will you do?

LD: I’ll focus on marketing the business—I’ll be the voice. We have so many projects coming up. We have our own stroller now, and I have a book coming out. We’re looking into DVDs. I want to get those things up to their full potential. I need a right-hand person so I can concentrate on what I love.

FT: How do you find new franchisees?

LD: We haven’t had to do advertising—the word of mouth has been viral. And we’ve been blessed with media exposure. We’ve been on the Today show. And when the interview on Today aired, the editor of Self magazine was on her treadmill watching it. I got a call from her. And right now, I’m on my way to the Montel Williams show.

FT: What would your recommendation be to a new franchisor?

LD: Don’t skimp—get good legal advice. We went to a general attorney and got burned.

Five Guys Inc.Jerry Murrell, PresidentFranchise fee: $45,000–$55,000Royalty: 6 percentAd fund: 1.5 percentTotal investment: $300,000 with franchisee fee

About the company: Three of Jerry Murrell’s sons decided college wasn’t for them. So in 1986, as Murrell put it, “I said ‘let’s take that money and go into the hamburger business.’ It just seemed like the natural thing to do.” With a total of five sons, the restaurant was named Five Guys Famous Burgers and Fries. His wife, Janie, kept the books and the three oldest sons opened up the first restaurant—a simple, off-the-beaten

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48 46 LearningRx Training Center LearningRx Franchise Corporation 2/1/03 28 289%

49 N/A Moe’s Southwest Grill Moe’s Southwest Grill, LLC 1/1/01 263 283%

50 N/A Puroclean PuroSystems, Inc. 1/1/01 81 276%

51 55 Granite Transformations Rocksolid Granit (USA), Inc. 3/15/01 70 276%

52 N/A Island Ink-Jet Systems Island Ink-Jet Systems (US) Inc. 5/1/02 86 251%

53 N/A Apple Spice Junction ASJ Development, LC 5/24/02 21 247%

54 N/A Instant Imprints Instant Imprints Franchising, Inc. 3/15/02 60 243%

55 N/A Handyman Matters Handyman Matters Franchise Corporation

2/1/01 123 242%

path place—to rave reviews. They’ve kept the product line simple:

According to Murrell they have 19 different food items, and that includes all the ingredients. It’s burgers, fries and soda. And the occasional hot dog, because the five guys’ mother likes them. Murrell says he joined the family crew after he retired from a financial planning business and is “working like a dog” on the franchising portion. But make no mistake about it, he gives all the credit to his wife and the boys, who “really built the business.” Today, all five sons are part of operations: They currently have 20 company- owned locations with 136 restaurants open.

FT: Why did you decide to franchise?

JM: I think I was out of my mind. We had been asked to franchise for a long time, but we always said no. My kids decided they were going to do it anyway, so I decided to come in and help them out. For the most part, it has worked. Although my kids are fanatical about the operations, one-third of our franchisees run their stores better than we would run them, and that’s good.

FT: How has the support you’ve given your franchisees changed over time?

JM: We brought in a professional teacher to help us structure the training. And now we have a

wonderful district manager system. It’s expensive for us, but it works for the top two-thirds of the franchisees. There is one DM for every 15 stores. They are there for the franchisees, to help them with whatever problem the franchisee has. I have to say that the DMs really know how to run a Five Guys—and they are highly paid.

FT: Are you going after single-unit or multi-unit franchisees?

JM: All of the franchisees sign on to a territory. All of them are multi-unit, which is a lot easier for us.

FT: What kind of advertising do you do?

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JM: We don’t pay for any advertising, and we don’t allow discounts, coupons or chickens

running around in the parking lot. We collect the 1.5 percent advertising fee and spend it on secret shopper programs. It keeps the owner of the franchise informed on how his crew is doing. And we use that money to also give the crew bonuses. We put all of our money back into our four walls.

Before a franchisee signs on, I make sure I sit down with them and discuss this philosophy to make sure they can live with it.

FT: What kind of bonuses? JM: At one store, a customer wrote us an e-mail about how the cook was doing everything, while the rest of the crew was just standing around. The cook was out washing the tables, cleaning up dishes—generally just doing everything. We sent a printout of the e-mail to the store owner, who made sure his crew saw it, and we gave the cook a $750 bonus. I bet that crew will never stand around again.

We can see how this has changed operations. Our stores have never been run better. The crew is every-thing. It makes or breaks you. The head of operations at Five Guys, said he wants Five Guys to be written up in The Wall Street Journal as having the best training in the industry. That’s the type of focus we put into it.

FT: What are your growth plans?

JM: They keep changing. Two years ago I said I wasn’t going to go to New York, Georgia or Florida. I thought they were too far away. Now we’re in those places. I said we weren’t going to Missouri or Texas. Two weeks ago we decided to go there.

The growth has been out of hand, and it’s always been ahead of us. The demand is so great. We’ve raised franchisee fees twice and that didn’t seem to slow anything down.

FT: If you could have changed anything along the way, what would it be?

JM: I would have liked in the beginning to know someone who knew what they were doing (in franchising). I didn’t really know what I was doing when I got into it. I would be willing to help others if they need it now. They might be really naïve like we were, and some people just shouldn’t do it. I don’t think they realize how expensive it is. How they could lose it, and that there are people out there that all they really are trying to do is sell the franchises, instead of getting the

Dispute ResolutionWe are proud to have represented the following clients in protecting and promoting

their franchise systems through various forms of dispute resolution in 2006.

International TransactionsWe congratulate the following clients for expanding in the international arena in 2006.

New SystemsWe congratulate the following clients for joining the Snell & Wilmer franchise community in 2006.

Experience, Not Just TalkSnell & Wilmer is pleased to have represented these leading franchisors in 2006

D E N V E R L A S V E G A S O R A N G E C O U N T Y P H O E N I X S A L T L A K E C I T Y T U C S O N

S T R A I G H T TA L K. S O U N D C O U N S E L. R E S P O N S I V E. P R A C T I C A L S O L U T I O N S.

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right person for it.

FT: Do you have any advice to new franchisors?

JM: Let your franchisee committee be independent from you. When new guys come into the system, the older guys can tell them their idea is dumb, or good—but it’s their peers telling them that. I think we get a lot of mileage out of the franchisee committee. We’ve had franchisees even come to us and tell us that other franchisees who don’t perform are hurting their business. For them it’s about protecting the brand, too.

Anytime FitnessJeff Thames, Chief Operating OfficerFranchise fee: $8,999–$11,999Royalty: $419/monthAd fund: $150/monthTotal investment: $25,000–$75,000 depending on location

About the company: Anytime Fitness grew out of the principals’ experience in the fitness industry. They had owned big-box clubs and companies that conducted fitness promotions. Their research told them the big-box clubs were paying for overhead such as extra staff, pool maintenance, basketball courts, indoor tracks and cooling and heating, when customers were interested mainly in weights and cardio equipment—and convenience. The fact that technology was coming of age, they realized they could offer a secure environment for those who wanted to exercise on their own time, 24/7. Members swipe their card for entry into a small, 4,000-square-foot exercise space conveniently located near them. Today, the company has 410

open. On average, this year they will open one club per day.

FT: Over time, how have you changed the experience for franchisees?

JT: We’ve added more staff, more structure. We’ve put together a “phase program”—500 pages documents everything, from the time they sign the agreement to helping them with their exit strategy. We spent a lot of time coming up with this—documenting everything.

Also, each franchisee now is assigned a franchise consul-tant who holds their hand throughout the entire process. And we provide outstanding training. They leave our facility so pumped up. It’s very inspirational and moti-vational.

FT: What kind of training do you provide?

JT: At headquarters, we are conducting two trainings per month: a five-day owners training where we go through operations, finance, sales and marketing. We have a trade show set up in our building, where vendors come in and set up equipment. The new franchisees can try out the cardio machines themselves, see what they are like.

Also, we have a two-day “Vitals” training, which is advanced sales and marketing that is offered to the owner or manager of a club.

FT: Who are you targeting as franchisees?

JT: We’re passionate about fitness and entrepreneurship. This could be the personal trainer who is realizing their dream of owning their own club or a fitness enthusiast. Today, 38 percent of those who’ve joined us have added multiple locations.

In a way, this is a lazy man’s entrepreneurship: It’s three to six months of hard work—getting it going and signing up memberships—then you

can hire a salesperson/manager and move on. One of our first franchisees started with one location. He now has five clubs and five employees. Now he works for us as a full-time franchisee consultant.

FT: What’s been challenging as you’ve gone through the franchise process?

JT: We do a good job of adding staff and supporting our franchisees. What’s been a challenge, from a sales standpoint, is getting to all of the inquiries. We attribute our growth

to good member experience. What’s been challenging is to keep our current club owners happy, but at the same time keep new franchisees happy—we have to find them a territory that doesn’t infringe on existing

owners’ territories.

FT: What is something you wouldn’t do again?

JT: A minor regret would be that in the beginning, we gave our first

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Jeff Thames, COO of Anytime Fitness provides franchisees with 500 pages that cover set up to exit strategy.

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franchisees the right of first refusal for certain territories. We don’t give them that anymore, even

though we do everything in our power to protect their growth aspirations. Right of first refusal breeds consternation between existing and new franchisees.

JT: How do you see your franchisees financing their business?

FT: We have preferred lenders and vendors for every step in the process. In fact, we have a vendor trade show, and SBA lenders come to that. We have companies that lease equipment, too. But, we also see them financing subsequent clubs organically through their first clubs. One of our franchisees borrowed money from his parents and maxed out his credit cards to open the first one. He now has seven clubs open, and he has great banking relationships—one has offered him a $1.4 million line of credit and he’ll open more clubs.

Vino 100Gary Blumenthal, President/COOFranchise fee: $30,000Royalty: 5 percent (although in some states they charge a flat fee)Ad fund: 2 percent, national fund; 2 percent local fundTotal investment: $190,000, which includes everything but operating capital

About the company: Gary Blumenthal is the founder and operator of Tinder Box International, a national retail chain of franchised premium cigar,

pipe, gift and collectible stores in North America. Blumenthal also enjoys a good glass of wine, but in the past couldn’t find a wine store that met his needs. He founded Vino 100 based on the assumptions that most people want wine selection simplified and that many want to pair it with food. According to Blumenthal, they’ve come up with “Vino Speak,” a language they use to talk about how the wine tastes, not “talking about some Spanish grape you’ve never heard of.” The wines are arranged by the lightest whites and reds to the more robust, and from the driest to the fruitiest. The concept features 100 wines—hence the name Vino 100—under the $25 price point. The concept currently has 50 stores open, with 30 locations under development.

FT: Who is a typical Vino 100 franchisee?

GB: Well, we don’t have a lot of multiple-store ownerships, yet. Our philosophy is let’s walk before we run. If you’re a great franchisee, then let’s develop more stores. We need them to understand the business first. But we are getting more of our franchisees who want to open more locations.

FT: What is one way that you are differentiating your concept in front of the consumer?

GB: We have designed the store so the wine is

the star. Each wine is put on a pedestal, and we consider ourselves great tour guides. And we collect customer information: What you’ve bought, and what you’ve liked or disliked. We store that information, and we can pull it up the next time you come in. We can follow up with you on your tastes. And, we have a guarantee: We will give you your money back if you hate the wine. It gives our customers more confidence to explore different wines.

FT: You’ve franchised another concept before Vino 100. Has your thinking about franchising changed

at all along the way?

GB: One of the things I am putting a lot of emphasis on is the concept that franchisees really can be a strong component in idea generation and

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Vino 100 stores are arranged so that the wine is the star of the show.

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mentoring each other. They really have a lot to offer each other. We just launched a Web

site where they can go and share opinions—they are more involved in their own destiny, if you will. This idea that we’re big brother—well, I’m trying to break down that idea. In the end, someone has to make a decision, but I’ve mellowed out on this a lot. I want to channel their enthusiasm.


GB: We’re not freaking out about how many we are opening. We have a philosophy that we’re working on the stores that are already open, and the rest will take care of itself. Our growth plans will have to do with the quality of the candidates.

FT: How do you see the concept evolving?

GB: We’ve opened combo Tinder Box and Vino 100 stores. And we’re looking at adding product lines. For instance, we’ve created new cigars that are blended to go with wines. And we’ve added a chocolate line that is made to go with wines. We’re interested in complimentary products, and we try to let the franchisees be creative. One franchisee wanted to try wine greeting cards. We’re looking at olive oils and vinegars—we have a strong emphasis on accessories that enhance the wine experience.

Snip-ItsJoanna Meiseles, CEO/FounderFranchise fee: $25,000Royalty: 5 percent the first year, 6 percent thereafterAd fund: 1.5 percent the first year; 2 percent thereafter

About the company: Joanna Meiseles opened the first Snip-Its 11 years ago when her oldest son had his first haircut, and “I knew there had to be a better way. I was a young mother, and I was frustrated with what I had just experienced.” She put a business plan together, and borrowed $100,000 from her parents and siblings. She had saved $100,000 herself, and finally found other investors willing to put up the remaining capital.

“I had a lot of people tell me no, that it was a stupid idea,” she recalls. “You just have to be persistent.” Today, Snip-Its has 52 child-focused hair salons, with one company-owned location.

FT: What type of franchisee are you looking for?

JM: First of all, they need to be financially qualified. Having undercapitalized franchisees is setting yourself up for trouble. We don’t want them to run out of money. But on top of that, we want a certain personality; outgoing, enthusiastic. They need to fall in love with our brand. If they are choosing between a check-cashing business,

let’s say, and a Snip-Its, then maybe they are not for us. We want them plugged into their own community.

FT: Do you allow them to open more than one store?

JM: We prefer they do just one, but the most we let them do would be about three. We don’t do upfront area development—what if they signed up for an area, opened the first one, but didn’t open the other two for some reason? Their life changes, things get in the way. If they are a good franchisee with the first location, then we could consider having them open more.

FT: What are you glad you did from the very beginning?

JM: We set up our franchise program to be a world-class franchise organization from the start. For instance, we have an Operational Excellence Index, where we rate our franchisees based on site visits and other things that indicate whether we have a good franchisee on our hands. Our technology platform is excellent—it helps franchisees manage their business, collect data from the store. We started that when we only had three stores.

FT: What has been your biggest challenge so far?

JM: We’re lucky, because we have great franchisees, but I would say the biggest challenge has been being selective about choosing franchisees. If you have good franchisees, everything will fall into place. They validate the brand, and that’s important. It was hard to turn down a check in the early days, but we do turn people away.


JM: I’d like to be at 250 stores in the next three to five years.

FT: How do you help your franchisees market their stores?

JM: We have a marketing calendar, with four promotional periods per year. We provide new promotions for them. We teach the grassroots marketing and we also try to do cross promotional

marketing. For instance, we had a campaign with Hasbro and the 50th anniversary of Playdoh. We

went to Hasbro and told them how targeted our business is, and we have a captive audience. As a result, you saw Playdoh in all of our waiting rooms. We also just ended a campaign with

MGM, where we cross promoted with the movie “Arthur and the Invisibles.” We’re partnering with bigger companies.

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When Joanna Meiseles came up

with the idea for Snip-Its , she had

to be persistent to overcome critics.

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Life in the diamond lane - Concerto Networks19 N/A Dream Dinners Dream Dinners, Inc. 6/1/03 97 626%...

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Transcript of Life in the diamond lane - Concerto Networks19 N/A Dream Dinners Dream Dinners, Inc. 6/1/03 97 626%...