How to fast-track your franchise

Long Island Business News, Jun 23, 2009 by Claude Solnik

Private arrangements

Occhiogrosso agreed reaching special arrangements with struggling franchisees in a down economy creates problems when others find out.

"Don't cut special deals with franchises," Occhiogrosso said. "Manage within the agreement. It will haunt you for the next 10 years."

Bob Babnall, chief financial officer of Tru Foods, said the best way to grow a franchise in a down economy isn't just to bring on new prospects, but to help successful operators grow.

"Focus on existing franchisees," Babnall said. "We will go to those, offer them the opportunity to expand."

And even the most successful, growing franchisors will find not every franchisee will succeed. Ken Stein, president of Roslyn-based business brokerage Kensington Co., said it's important to help unhappy franchises leave the business.

"You've got to have an exit strategy for people who want to retire and sell their business," Titus said. "And it doesn't work for everybody. Then your best bet is to help them resell their stores."

Sometimes exits lead to new beginnings, helping an already big franchise grow. Titus talked about a franchise location that did poorly until a new franchisee took over, growing it to $10 million in sales.

"You want that store open. If he doesn't make it, help him sell the store," Titus said. "Our program is they've got to go out and sell. Some people get this vision that all they have to do is buy a franchise to be successful. You've got to work."

An improving economy could boost everybody's business, but bad times provide opportunities for some growing franchisors. 1-800- MrRubbish, for instance, found business doing trash collections at foreclosed homes.

"You look at the people impacted by the recession," said Larry Fierstein, president of 1-800-MrRubbish. "We'd like the AIG account if we could get it."