From Deseret News archives:

Franchise players: Businesses grow in popularity among potential owners

Published: Saturday, Feb. 4, 2006 6:07 p.m. MST
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Perreault bought the Utah franchise as a ticket to the United States from his native Canada. After five years of running the business — a specialized metal distributor focusing on small quantities custom cut to size — he said he is not sure he would have made it starting from scratch.

"They just make it easy to get going," Perreault said. "We all procrastinate at the start. We're not exactly sure how to start and where to go, so that's how they help. . . . Plus, you have a recognized name for potential buyers."

He said the franchisor for Metal Supermarkets has provided his Web site, as well as posters and mailers "so you don't have to try to come up with a catchy slogan." They also supplied a database of suppliers and potential customers.

"I think it's been successful because it followed exactly what they said," Perreault said. "They said it would take 18 months of suffering and losing money, but if you follow their directions, it would work out. And it did."

Keith Gerson, vice president of marketing and development for Salt Lake-based visual communications firm AlphaGraphics, said it is in the franchisor's best interest to help franchisees succeed, because the franchisors need to collect fees.

AlphaGraphics started with a company-owned model 35 years ago, he said, but switched to a franchise model 25 years ago. It now has 268 locations worldwide, all of them franchises.

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"The franchisor is the one who has often times made the mistakes and lost the millions of dollars on the path to really refining the model to the point that it's more likely to result in success," Gerson said.

"We're there to help (franchisees) evaluate, help them benchmark their performance . . . to determine whether or not they're making the best choices for themselves to ultimately accumulate wealth."

Sticking with it

As franchisees start to gather wealth and learn the business without depending as heavily on the franchisor, some may wonder if they are still getting a good deal for their monthly fee, Perreault said.

"Five years in, you're still sending in the monthly check, and you say, 'Why am I doing this?' . . . It's easy to forget the brand-name recognition. I have people come in and say they used the Chicago store and saw us, and now they come in here. Brand-name recognition is a plus."

And when that recognition helps a business succeed, both franchisor and franchisee come out ahead.

"I'm only working on developing one franchise (right now), but I've purchased three," FiltaFry owner Huggins said. "This has been a great project for me. I've really enjoyed it, and it's something that, for the right person, I would definitely recommend. . . . As long as it continues to grow, I would consider buying more and more franchises."


E-mail: gkratz@desnews.com

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Jeffrey D. Allred, Deseret Morning News

Randy James is president of the Utah office of FranNet, located in Midvale, which helps match people with franchises.

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