Sharing their sweet dreams
Shave ice with attitude.
That’s the spin Conejo Valley moms Lisa Kudirka and Karen Bain hope will hook franchise buyers on their unconventional take on selling shave ice treats.
From a glowing blue counter at their Thousand Oaks shop, bar-style beverage guns squirt chilled root beer, mango, bubble gum, green tea and other flavors atop the snow-like confections. Plasma televisions feature extreme sports bloopers. Snowboarder and surfer lingo fills the menu. High-energy music sets the mood.
The polished business is a far cry from the homespun shave ice stands in Hawaii where the business partners fell in love with the treat. The 18-month-old company, called Shave It Inc., also is profitable, which its owners hope will be a sweet lure for business shoppers at Friday’s franchise expo in downtown Los Angeles, where the firm will have a booth.
“Because we’ve done so well, [franchising] for us is almost a ‘snow brainer,’ as we call it,” said Kudirka, who uses the six children she and Bain have between them as the focus group for new “flavas.”
Dennis Mulgannon is another potential franchiser pumped up for the three-day event, where at least 10,000 visitors are expected to check out 150 or so business concepts at the Los Angeles Convention Center.
He’ll be talking up his back-to-basics Athletic Nation Men’s Fitness Gym concept, which grew from a book he wrote about his own weight-loss and fitness regimen. His target customers are men ages 35 to 60 who don’t work out and won’t go to a big-box gym.
“My client isn’t going to roll around on a bouncy ball,” said Mulgannon, president of the San Jose-based company. “You come into our gym -- it’s serious time.” The company has four facilities and agreements to open more, including one in La Jolla.
Those two franchising hopefuls will join others at the franchise show with a bit more experience, including Facelogic International Inc. of San Diego.
Facelogic combines the membership business model of the Curves women’s gyms with the fast-growing skin care industry to offer affordable facials and other spa treatments.
Facelogic Chief Executive Sherryl Ford won’t be there, though. She’s too busy signing up new franchisees -- she has sold 85 so far -- and visiting the 27 spas already open. She credits her success to her merging of two popular concepts.
“My father taught me to do the usual in an unusual way,” said Ford, who at one time owned the Escape Day Spa she founded in San Diego and a Curves franchise next door.
Dad may have known best. Her first 12 units were bought by former Curves International President Gary Findley, who runs a franchise consulting firm that sells franchises for Facelogic.
These days, Facelogic is working on building its corporate infrastructure to handle the growth.
If growth is your goal, turning a small business into a franchise operation has its appeal.
The benefits include leveraging other people’s time and money -- the resources of the franchisees who buy into your concept -- to expand your business faster than you could on your own without giving up equity ownership.
“You’re also going to tap into the management skills and motivation of people who own their own business, which is a huge thing,” said Mark Siebert, chief executive of iFranchise Group Inc., a consulting firm based in Homewood, Ill.
Before you start planning your entry into franchising, it’s important to know when franchising isn’t a good idea for a small-business owner:
* The business is new. You may think you have a concept that’s perfect for franchising, but experts recommend that you run your shop for a year or two to get an idea of whether customers will bite and you can turn a profit.
“You want to see whether you can iron out all the kinks and make the mistakes yourself, rather than at the expense of your franchisee partners,” said Steve Feirman, a partner at Nixon Peabody and co-leader of the law firm’s national franchise practice.
* The sizzle factor is missing. A unique concept is usually important for success, whether it’s the product or the business model, experts say. It helps if there are barriers to entry by other companies.
IFranchise fields 600 calls a month from potential franchisers and ends up taking as clients only about three, Siebert said.
“We are in the frog-kissing business,” said the consultant, who works with Shave It.
* The founder is key to the business’ success. If your business is successful only because you work 80 hours a week or if your unique personality or skills are not transferable to potential franchisees, you may need to rethink your plans. Though your business might be profitable, it may not be replicable.
* The concept won’t travel well. Siebert points to Cincinnati chili as a food concept that may not succeed outside its home region. Only heaven knows what Texans, for example, would make of a bowl o’red (for you non-Texans, that’s a regional term of endearment for the bean-free variety of chili) served over spaghetti, which is how Cincinnatians like it.
* Profit is low. Not only does your business have to be profitable, but it also has to be so profitable that franchisees can make about 15% to 20% on their investment after expenses. Those expenses will include the royalty fee -- typically 5% to 10% of revenue -- that they will pay you, as well as money they will owe toward the corporate advertising fund.
* Expectations are unrealistic. It can be exciting to be contacted by potential franchisees, but that doesn’t mean it’s logical or practical to hand out franchises to whoever wants one.
“Some franchisers are so excited when they start that they will sell a franchise to anyone that fogs up a mirror that is held up before them,” Feirman said. The first three or so franchisees are especially crucial, he said.
“If the initial franchisees are not well suited and struggling and undercapitalized, it’s not going to be a happy story for the franchiser,” Feirman said.
It’s important to understand that franchising operates under a different business model, with its own best practices to follow.
Even a business that seems to be a perfect fit for franchising can face hurdles.
Children’s bookstore owner Christy Coyne wants to franchise First Page, which operates in Costa Mesa and Newport Beach. The older store, in Costa Mesa, is profitable.
Coyne has paid to have the legal documents drawn up. She has invested in a price inventory control system. She’s tinkered with employee uniforms, settling on a work apron with her logo. She even has a list of people who are interested in buying a franchise.
But speed bumps have slowed her progress. She’s still trying to get her new e-commerce website up and running, in hopes that it will raise her profile among potential franchisees.
“I’d rather go smaller and slower -- and know that every single step of the way I’m providing something of value -- rather than hype it big and the entire thing falls flat,” Coyne said.
For those who do have their ducks in a row, franchise-wise, a product or service that is in demand can be leveraged into a much larger operation.
Shave It’s treats already have been a winner with customers who line up for cups of fluffy shave ice drizzled with richly flavored syrups from Hawaii. Fueled in part by their most popular combo -- the root beer float, made with the snow-like shave ice atop a scoop of Santa Barbara’s famous McConnell’s ice cream -- Kudirka and Bain are ready to roll out their concept regionally.
The more successful their potential franchisees, the more money they hope to give to their foundation, Foster a Miracle, which focuses on foster children. The team already takes its Shave It van to a local foster services shelter for free monthly treats.
“You want everyone around you to be successful,” Kudirka said, “otherwise, you can’t build an empire.”
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(BEGIN TEXT OF INFOBOX)
West Coast Franchise Expo
What: About 10,000 attendees will check out 150 or so franchise concepts and attend seminars and workshops.
Where: Los Angeles Convention Center
When: Friday through Sunday
Cost: Exhibit hall and seminars, $20 to $25. In-depth workshops, at $225 to $280, will cover single topics such as how to franchise your business and franchise technology. To learn more, go to www.wcfexpo.com.
Source: Times research
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Tips for hopefuls
* Work the kinks out in your own business first.
* The business has to be able to survive without the daily presence of its founder.
* The concept must be workable in other regions.
* Profit must be high enough to cover franchisee royalty fees.
* Expansion should be based on strategy, not just opportunity.
Source: Times research
