Franchising, retail, business
29/05/2014
The franchise model in the U.S. is thriving, and some of the biggest success stories are coming from smaller ideas.
While much of the growth still revolves around big brands that mark many of our street corners and strip malls—think Dunkin Donuts, McDonald's and Subway—sectors across a wide swath of industries are blooming as the economy continues its slow rebound, creating opportunity for a new generation of million-dollar-plus businesses generated from little-known franchise concepts.
"We're trying to establish escapism," said Tony Lamb, founder of Kona Ice, the shaved-ice dessert-truck company based in northern Kentucky he founded six years ago. Despite the seasonal nature of Lamb's core product, about 95 new Kona Ice franchises—modified Chevy trucks that use battery power packs instead of diesel generators when parked—have hit the road so far this year, up from 10 to 13 in the first year. Last year Kona Ice saw 130 new franchises launch.
"If you look at the 20- to 30-year trend, the number of businesses in America that are using the franchise model to grow and scale is higher than ever," said Matt Haller, vice president of public affairs at the International Franchise Association, citing statistics from FRANdata that show that the number of companies with franchise disclosure documents that have been around for at least three years is 2,520, up from 2,101 a decade ago.
The people behind the little-known franchise successes reflect some of the bigger trends and workforce issues in the U.S.
For Ted Arnoldus, 39, breaking free from corporate America—where, as an operating-room sales rep, he sold medical devices for a Fortune 500 company in Southern California—meant finding a place where he could work more family-friendly hours. When a former boss clued him in to what it was like working for Unishippers, a company that provides shipping solutions for small packages on up to heavy freight, Arnoldus was curious, but he didn't have enough capital to purchase his own branch.
"The franchise [in Orange County, California,] was doing $13 million to $15 million in annual sales," said Arnoldus, who eventually took a job there as sales manager. Enticed by the brand's growth—even during the recession Unishippers maintained a healthy niche providing package, pallet and freight shipping service for small- and medium-sized businesses—Arnoldus appreciated the freedom afforded by a small company. "I was completely befuddled that I had so much power in the organization. That's something that doesn't exist in Fortune 500 America," Arnoldus said.
By: cnbc.com
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