Advice the franchiser who sees franchising as the best route to "being my own boss." - drive-through franchises

Nation's Business, Feb, 1990 by Meg Whittemore

Advice for the entrepreneur who sees franchising as the best route to "being my own boss."

Seven out of every eight U.S. workers drive to their jobs, the Census Bureau says. And now those 99 million daily commuters are becoming a distinct and blossoming market for many savvy franchisors. Offering convenience and limited choices, drive-through franchises cater to customers on the go.

"We're after the commuter in a hurry who wants a cup of coffee and the morning paper without getting out of the car," says Ken Beck, chairman of Press Box News Drive-Thru Newstands, based in Lancaster, Pa.

Taking the counter to the curb has worked for the 12 PBN franchises in northeast Philadelphia and in nearby Cherry Hill, N.J. More than 1.3 million time-pressed commuters have driven up to a PBN window since the first store opened in 1985 in Philadelphia. The franchise's formula combines convenience with simplicity. A Press Box News outlet is just 100 square feet (enough room for one worker) and takes up one parking space in a shopping-center lot.

PBN co-founders Beck and Scott Biltz decided they would streamline the variety of merchandise sold at their outlets and offer only the basics, such as newspapers, coffee, snack items, cigarettes, soft drinks, magazines, film and photo finishing, and lottery tickets. All locations are open at 6 in the morning and handle as many as 70 cars an hour during the peak commuter times. The newspapers and magazines sold at each PBN location are selected according to customers' preferences. "We can go into an area and customize what newspapers and magazines the customer base will buy," says Biltz.

A PBN franchise costs $50,000 to $60,000, depending on the amount of site improvement needed. The price tag is all-inclusive, says Biltz. Franchisees must also pay a total of 5 percent of gross monthly sales in royalties and advertising fees. Says Biltz, "By keeping our overhead low, limiting our merchandise, and going to the customer, we are fairly sure we have a winner on our hands."

A return to basics seems to be the watchword among franchisors who target the customer on the go. Central Park, U.S.A., for example, has adopted strategies that proved successful years ago for fast-food franchisors: a limited menu, quick preparation, fast service, and product consistency. Central Park sells hamburgers, French fries, and soft drinks from free-standing structures that have drive-through windows on either side. The 12-foot-square kiosk is a two-story structure; food is prepared and sold on the ground floor, and supplies are stored upstairs. Central Park, based in Chattanooga, Tenn., costs $150,000 to $200,000, depending on whether the site is leased or purchased; the price is 25 to 50 percent of the cost of a big-name burger franchise.

"When you don't have time to wait" - that's the marketing phrase of Jim Burks, president and CEO of Pharmacy 1 Express, a drive-through pharmacy franchise based in Indianapolis. Being able to obtain your filled prescription without leaving your car is behind Pharmacy 1's philosophy. "It just made sense to us," says Burks, "that when you're not feeling well, you don't want to get out of your car and wait in line to get your prescription filled."

The idea for Pharmacy 1 took shape in 1988, and co-founders Burks and Bob Allen opened the first outlet in Bloomington, Ind., in early 1989. Since then, another franchise has opened in Bloomington, and plans have been made to develop markets in Florida, Indianapolis, and Louisville, Ky., this year.

A limited product list - pharmaceuticals and selected over-the-counter drugs - keeps the overhead low, says Burks, "and helps promote the image of a specialized professional pharmacy." Each Pharmacy 1 is 600 square feet and offers customers the choice of either drive-through or walk-in service.

Individual lots close to medical offices and hospitals were purchased for the first two outlets. "We wanted our own identity," says Burks, "so we decided that a free-standing building close to the medical community would provide that."

The total start-up cost for Pharmacy 1 is $139,000, which includes the franchise fee, inventory, $30,000 of working capital, computer, office equipment and furniture, signs, and storage bins. Hours of operation are set and cannot be changed: 10 a.m. to 6 p.m. Monday through Friday, 10 a.m. to 2 p.m. on Saturday, no emergency hours. A contract with the largest national drug distributor ensures competitive pricing on all prescriptions, Burks says, and so far, the strategy is working. "Our first stores have been remarkably successful," says Burks, "and we have found that people really do shop for convenience." Seventy-three percent of customers surveyed by Burks and Allen said they consider convenience of location most important when choosing a drug store.

Thanks to those franchisors in step with today's time-strapped consumers, commuters looking for convenience and quality can now get both without leaving the front seat of their cars.