Franchising…. Starting your own business!

Black Enterprise, May, 2004

"The most gratifying part of our job at JAN-PRO is helping others succeed through franchising. Our program enables people from all walks of life to achieve financial freedom through our proprietary systems, procedures and programs. JAN-PRO's program is synergistic in the sense, the better the Unit Franchisees performs, the better the Master Licensees do and the better the parent company does. This means that all the incentives are aligned properly."

Dennis Jarrett, Executive Vice President, JAN-PRO International

A key challenge to entering the world of entrepreneurship has always been the access to capital. Certainly this business environment does not lessen the significance of this challenge. In addition to lending programs that most franchisors provide, there are a number of other sources that should be investigated. There are a growing number of banks and venture capital firms that have earmarked funds for minorities and women interested in owning a franchise. Start by contacting your state economic development office to find out what financial resources are available in your area. Doing the diligence to secure capital could indeed make a difference in the time it takes you to realize your career goal and in fact influence the timeline for the success of your business, your franchise.

In as much as franchising has historically presented an attractive and lucrative career option for African American business professionals looking for a change from corporate America, the trend to become a franchisee is greater as a result of the current economic climate. While franchising in and of itself does not end obstacles that otherwise competent and capable minority entrepreneurs face, it does provide the African American business professional with an established route--roadmap or proven template--for entrepreneurial success. It is the consensus of many large franchisors that African Americans with strong business backgrounds tend to do well as franchise owners. Combined with their passion for and commitment to success is their strong business training. The end result is a qualified and motivated business leader armed for success in an extremely competitive economic environment.

Contact franchisors directly but shop wisely. Determine beforehand how much you can afford to invest and where to obtain financing. Careful investigation prior to purchasing a franchise also necessitates understanding the Uniform Franchise Offering Circular, which provides a significant amount of information on that given company. Inquire about that company's training and support provided, assistance in finding and developing a location, and the sources of inventory and supplies. Research the company's growth and prospects for future growth.

Although a number of franchisors across many industries are extending the invitation to African American professionals to become franchisees, it is the perspective entrepreneurs' responsibility to do the due diligence. The diligence must include: Increasing your knowledge of the industry (franchising generally and the specific industry), assess your skill set objectively, carefully consider the region of the country you believe (based on your expertise and the franchisor's success in the region) you can be most profitable and hire experts, at the top of that list must be a franchise lawyer and a franchise accountant.

GOLDEN CORRAL FRANCHISE CHIEF: "IF YOU SNOOZE, YOU LOSE!"

Golden Coral

Golden Corral, one of the nation's fastest-growing major restaurant systems, granted a record 72 new market franchises in 2003.

"Golden Corral awarded new franchises last year at the rate of about one every 3.5 business days," notes Larry Tate, Senior Vice president of Franchise Sales.

"We believe in the old adage, 'If you snooze, you lose,'" he says, adding:

"Unfortunately, some qualified franchise prospects can't reach a decision after they've confirmed the availability of a specific market; and when the call back later, they're disappointed to find that the market has been sold."

The strong performance of the Golden Corral system is what attracts prime candidates for franchises. System-wide sales in 2003 were $1.247 billion, the twelfth straight record year. Same-store sales increased 3.9 percent in 2003, trending upward during the year and capped by a 5.7 percent gain in the fourth quarter.

Another record was set in 2003 when 54 Golden Corral restaurants achieved sales of more than $4 million, including nine above $5 million and one which broke the $6 million mark for the first time in the system's history.

Golden Corral's growth is driven by its franchise community. At year-end 200S, there were $45 franchised restaurants and 122 company-owned units in the system, for a total of 467.

"The Golden Corral success story gives us an edge over many other franchisors," Hr. ]ate says. "We're telling that story in many leading publications, such as BLACK ENTERPRISE, and we're talking directly to prime candidates at events like the BLACK ENTERPRISE Entrepreneur Conference. There's a great talent pool in the African American business community and we've put a high priority on recruiting there."