Advertisement

  Stock Sponsor
Click here for full stock listings


MORE HEADLINES
Published: September 7, 2009 3:00 a.m.

Franchises

Brands may be winning model

Health clubs, restaurants among choices

Michael Schroeder
The Journal Gazette
Thumbnail

Cathie Rowand | The Journal Gazette

Patrick Carpenter is owner of the Dupont Road Anytime Fitness, a franchised gym that is open 24/7.

Advertisement
Franchise ownership
Pros

Buying power: Better rate on goods and services, thanks to bulk-buying

Brand recognition: Everyone knows McDonald’s makes burgers.

Proven model: Not all risk is eliminated, but the trial and error associated with starting a business is greatly diminished.

Full disclosure: Federal laws require that franchisers disclose in great detail what has or could go wrong with the business and other information potential franchisees need to make an informed decision.

Corporate support: Local franchisees say they not only received training, they also get regular help in all facets of the business, including marketing, sales and where to locate a franchise.

Cons

Must stick to script: The freedom that franchise owners have to put their own twist on the business varies, but to some degree all must comply with a basic business model.

Franchise fees and ongoing charges: Franchisees pay for the privilege of owning a piece of a larger brand. Along with the initial franchise fee, they often pay a regular charge tied to the percentage of total sales.

Not foolproof: Franchises are sometimes advertised as can’t-lose ventures, but what works in one place doesn’t always work in another.

Support varies: Generally speaking, the support franchisers provide franchisees is one of the biggest advantages of the model but sometimes a weak corporate structure leaves franchisees wanting more direction.

Permission required: Franchisees wanting to open a location in another territory must first get the green light – and pay for the right – before moving forward. On the flip side, this protects existing franchise owners from inside competition.

FORT WAYNE – Kim and Gavin Hart started with three Dairy Queens 18 years ago.

They got those after buying the restaurant chain’s northeast Allen County territory from Kim Hart’s parents. Since then, they have closed and relocated some locations and added others. Now the couple own six Dairy Queens and two Dunkin’ Donuts.

They expect the number of Dunkin’ Donuts locations to grow to “20-plus” in Fort Wayne and surrounding counties in six years. During that time, they could add five to 10 more Dairy Queens, based on market research, Kim Hart said.

The Harts like the support they get from the company, brand recognition, buying power and the proven model that comes with the franchises. Like other local franchise owners, they think the trade-offs, such as having to follow a specific business model, are worth it.

For a while, the couple operated an independent business – Brickhouse Bagels and Bakery on Coldwater Road and Brickhouse Café and Creamery downtown in the Allen County Public Library. Last year, both were converted to Dunkin’ Donuts stores.

Kim Hart said much of the work they did in creating Brickhouse was done for them with the franchise model.

“It’s easier; the power of the brand.”

The Harts paid franchise fees upfront for 20 Dunkin’ Donuts stores. The fees range from $40,000 to $60,000 a store, Kim Hart said, declining to be more specific. Dairy Queen franchise fees range from $25,000 to $35,000, depending on what stores offer.

A good fit

Patrick and Amy Carpenter, another local couple who own a franchise, paid $15,000 upfront for the Anytime Fitness they opened on East Dupont Road, near Interstate 69.

The Carpenters pay a monthly fee of about $500 for the fitness center, which has attracted about 1,000 members since it opened in January 2008.

It has since expanded by 2,400 square feet to about 7,500 for a group fitness room. Although his company doesn’t encourage group fitness, in part because of the additional overhead cost, Patrick Carpenter said he has the flexibility to be different.

But he’s not on his own.

Carpenter said he’s received strong support from the company and is in contact with an adviser he’s come to know personally. The Dupont Road gym was the first Anytime Fitness in the area, and now three couples each own a growing franchise.

The Carpenters collaborated with Mike and Natalie Betts who opened locations in Georgetown Square and Covington Plaza in March.

Although the Betts don’t share ownership with the Carpenters as first planned, Patrick Carpenter manages the Georgetown club and plans to help out until his second club opens in Columbia City.

He would like to open it before the end of January but still needs to select a location. The Betts, who also have franchise rights for clubs in Australia, opened a club in Angola this spring.

Carpenter sees few limitations with the franchise model, though he admits it can be oversold as easy. “Nothing’s easy,” he said.

Carpenter generally finds himself at the Dupont Road Anytime Fitness until 10 or 11 each night. But he has no complaints.

He takes it as a given that “Even with a franchise, you still have to put in your time.”

Sources: Franchise owners Kim Hart and Patrick Carpenter; Al Grossnickle, University of Saint Francis assistant professor