materials, including the company’s Uniform Franchise Offering Circular (UFOC), a disclosure document that spells out all aspects of the investment opportunity, and interviewing a number of OpenWorks franchisees, the Harrisons put down $6,000 in personal savings toward the initial franchise fee of $11,500 in January 1999 and began operating out of their home in Rancho Cucamonga, California.
With their investment, financing of the remaining balance, and agreed upon 15% royalty, they received equipment, chemical supplies, and two weeks of training. By March of that same year, OpenWorks handed the Harrisons their first account — Tetra-Pak Inc., a warehouse that creates packaging for milk and orange juice cartons. One month later, the couple added GE Lighting as a client.
Since Jacqueline and Collis both worked full-time jobs at the time, they were slow to take on any new accounts for a year and a half. The $2,000 monthly income they earned was enough to build a college fund for their daughter, Jasmine, 19, and son, Collis, 21. The Harrisons divorced shortly after, and Jacqueline was laid off from her job at the San Bernardino County Sun newspaper, where she had worked 10 years as the manager of the customer service department. Jacqueline decided it was time to expand her customer base. “I was in a situation where I had to make a decision. I had no husband and no job, but I had a business, so what I decided to do was take my skills that I had learned over the years working with corporate companies and put those skills and energy toward my business.”
It worked. Harrison (who continues to share the business with her former husband) now has seven employees and nine accounts, including Coca Cola, National Envelopes, Kimco Staffing Services, McClane Food Distribution, and Talbert Medical Group. Last year she earned about $100,000 in revenues and anticipates generating about $123,000 in 2003.
FINANCING YOUR FRANCHISE
As with any type of business, financing is important when considering a franchise. According to DeBolt, about 60% to 70% of franchises require an initial investment of less than $150,000. Of course there are those franchises that command much more in terms of total start-up costs and the initial franchise fee, but there are several options you can use to mine the cash.
“Chances are if you have any capital, you can find a way to leverage that through Small Business Administration loans, family, and friends,” DeBolt says. “Some franchise systems have their own in-house loan programs, actually about one-third of them, but the rest of them all have relationships with financial institutions that know their franchise model and are more inclined to work with it.”
ENLISTING PROFESSIONAL HELP
For some people, making a choice about which franchise to purchase can be an arduous process. Of course, you don’t have to go it alone. There are companies that specialize in helping prospective franchisees identify their passions, interests, and strengths — and at no charge to the would-be entrepreneur.
Marc Kiekenapp, executive vice president of FranchiseBuyer L.L.C., says when people call his consulting service