Detroit, Michigan’s Empowerment Zone (www.detez.com) covers an 18.35-square-mile area and is home to nearly 100,000 Detroiters. It will also soon become the home of three additional Blimpie Subs and Salads franchises.
Empowerment Zones are neighborhoods in urban and rural areas throughout the United States designated by the federal government for revitalization. In 1997, the sandwich chain set aside $3.6 million to waive the $18,000 franchise fees on 200 Blimpie Subs and Salads shops located in targeted urban communities, offering discounted fees on additional franchises.
Under this new program, called Blimpie Urban Initiative for Leadership Development (BUILD) (www.blimpie .com, 800-447-6256 x104), the new franchises must be located in federally designated Empowerment Zones and Enterprise Communities. BUILD, which was conceptualized in Atlanta and is a first in franchising history, boasts that its objective is to provide opportunities to deserving entrepreneurs while creating jobs within communities. BUILD also provides Blimpie with access to new growth markets where the company currently does not have a presence.
“There are about 200, non-BUILD stores in Atlanta,” says Lance Moore, group vice president of the Western division of Blimpie International. “Atlanta, because of its large minority population, was used as a model city to help us understand what those franchisees needed and what we could do realistically.” With all potential problems identified and addressed, Blimpie targeted Detroit to recently launch the first four BUILD franchises. “We had a presence in the areas surrounding Detroit but very little in the Empowerment Zones,” Moore adds.
“This is the kind of collaboration that results in a win-win situation for everyone involved, residents, businesses, and neighborhoods,” says Larry Givens, executive director of Detroit’s Empowerment Zone.
BUILD recipients are chosen through an extensive application process. In Detroit, nearly 400 candidates attended the initial BUILD announcement. The candidates then supplied background information, financial statements, credit information, and an essay discussing why they believed they should be awarded a Blimpie franchise. Of 70 completed applications submitted, 28 were selected to attend the next phase4a business plan writing course. Only five were selected as finalists. Four franchise licenses were then awarded to African American entrepreneurs. The first of the four opened for business in March 2001 and the remaining three are slated for opening by year-end.
Though the franchise fees are waived, the franchisees are responsible for roughly $100,000 to $150,000 in additional funding. The money is needed for the building site, operating expenses, and equipment. Training for new franchisees is provided by One Stop Capital Shop, funded through the Empowerment Zones and supported by the SBA as well as Blimpie.
The program will continue in Los Angeles, Tacoma, Washington, and Newark, New Jersey