15 Great Low-Cost FRANCHISES - advice on starting in franchising

Black Enterprise, Sept, 1999 by Gerda D. Gallop

If you thought buying a franchise operation was out of reach, think again. We offer profitable ventures that will make you, not break you.

IN 1984, AGNES DAVIS MADE A DECISION THAT WOULD CHANGE HER LIFE.

Armed with four years of experience as a sales representative for a travel agency and more than 20 years of "customer service" experience as a registered nurse, Davis attended a presentation by Travel Network, a travel company, geared to potential franchisees.

"I was discouraged that I wasn't getting the information I needed to succeed at the travel company I was working for," Davis says. "But I was impressed with what Travel Network had to offer and the amount of information they'd given. They made us feel we could be successful agents if we worked the program the way they had it laid out for us."

After raising $25,000 in start-up capital and undergoing weeks of extensive training, Davis was in business three months later as the owner of Senga Travel d/b/a Travel Network in Staten Island, New York. Today, it is a $3 million operation.

If you've been bitten by the entrepreneurial bug, you may want to consider franchising too.

There are about 600,000 franchised small businesses in the U.S., which account for $1 trillion in sales each year, according to the International Franchise Association (IFA) in Washington, D.C. This business sector is attractive for several reasons. Franchises exist within many diverse industries, and for their money, franchisees get a proven business concept within a structured system that offers the extensive and ongoing support they'll need to succeed.

For more than a decade, BLACK ENTERPRISE has provided a list of the franchise companies that offer some of the best opportunities for African American business owners. This year, BE's 15 Best Franchises list is based on a national survey of franchisors conducted by BE. Research. The companies we chose were culled from lists of franchises that can be purchased for less than $70,000. Additional factors we considered in making our selections included franchise fees, start-up costs, the number of existing black-owned units, support services and the average sales per unit.

As trends indicate, BE's list has some of the hottest industries in franchising: fast food, industrial/residential cleaning, education, business-to-business services and personal services. "The personal and business-to-business services are particularly hot because people have such a limited amount of time, and these businesses help people get things done quickly and efficiently," says Debbie A. Smith, IFA vice president of public affairs and emerging markets.

Co-branded and multiconcept franchising are also on the rise.

"The new entrepreneur may form a consortium with other partners and put together a multifranchise concept of franchises in different but complementary industries," says Ronald Harrison, chairman of the board of trustees of IFA. "Co-branding, where you have a couple of concepts within one storefront, offers a new era of opportunity, along with e-business, which will be exciting to watch over the next several years."

Indeed, technology has made Travel Network one of the leading franchises in the U.S. The franchise, which had more than $1.5 billion in U.S. sales in 1998 and has more than 500 agencies in 24 countries, has a Website, www.travelnetwork.com, which allows consumers to e-mail agencies around the U.S. and internationally. In turn, this allows individual agencies to market and promote their businesses. It also offers a Website where franchisees can go to customize their own Websites, even home-based franchises.

"Largely because of our experienced staff, we not only understand the travel industry thoroughly, which gives us an advantage, but our support services are top rate and intensive," says Stephanie Abrams, executive vice president of the 17-year-old Travel Network

According to Abrams, owners of storefront-based franchises receive four weeks of intensive pre-training in business development, marketing, operations and airline computers. They also have on-site support before, during and after first opening their doors for a total of five days. Franchisees also attend regional and national meetings each year and have ongoing site visits from corporate representatives.

Davis appreciated the support she received from Travel Network when first starting out. At the time, Staten Island had very few travel agencies, none of which were black-owned. "They searched the entire island with me to find the best location and helped me with my store layout," Davis says.

Today, she has four employees and books 75 to 80 trips per month. Most of her business is generated from referrals. She plans to expand beyond leisure travel into corporate accounts.

John Melton of Glenside, Pennsylvania, is the successful owner of a Merry Maids franchise, a residential cleaning company.

After working for Sears, Roebuck and Co. for 28 years, at age 50 Melton took an early retirement package. A friend and former co-worker who owned a Merry Maids franchise helped convince Melton to purchase one in 1993.