Dreams soar at franchise expo
It’s a tough time to be a mortgage broker, which is why Ulrik Singontiko spent Friday at the West Coast Franchise Expo.
After looking into a few restaurants that would have required a big cash investment, Singontiko said he was “seriously considering” putting $9,800 into a CruiseOne franchise, which would turn him into a part-time travel agent.
“I have a lot of spare time on my hands,” said Singontiko, a father of four who lives in Chatsworth. And, he added, “I need something else to supplement my income.”
That was a common refrain at the expo at the Los Angeles Convention Center, which attracted thousands of potential franchise owners and 180 franchise operators -- including Arby’s, MaggieMoo’s Ice Cream and Treatery, a child-care outfit called Nanny Poppinz and Cybertary, which provides administrative support services.
Economic conditions might be uncertain and the housing market may be in a slump, but the franchise business is booming, said Terry Hill, a spokesman for the Washington-based International Franchise Assn.
This year’s expo drew more participants than the 2006 show, he said. And about 1,000 franchise companies have been created in the last four years. The attraction, experts say, is that a franchise comes with training, equipment, a business plan, an established brand name and often an advertising campaign.
Gene Brezenoff, director of franchise sales for CruiseOne, which specializes in booking cruises, said that in the last year several mortgage brokers had purchased franchises, setting up shop at extra desks in their offices.
“The leisure market is an exciting space right now,” he said. “People always want to go on vacation.”
Charlie Choo-Choo’s, which rents trackless trains for private parties, also drew a crowd. For $100,000 you get a rubber-wheeled train that holds 27 children or 18 adults. Bret de St. Jeor, president of the company, said he wasn’t selling only a train but also railroad real estate: Each owner is assigned a territory of about 150,000 people (note to potential conductors: Los Angeles is still open) and a GPS unit attached to the train will alert De St. Jeor if one train infringes on another’s territory.
So far he has sold eight franchises. He said he had received requests for information from as far away as Argentina and the Czech Republic.
“You get the train,” he said, “and the next day, you start making money.”
Some at the expo were looking for business ideas they could appropriate. Stanton Sasaki, 39, an account executive for Countrywide Financial Corp., said he hoped to see an idea at the expo and maybe “do it better.”
Liz McLaughlin and her two sisters-in-law were looking for ideas too. After working for years as stay-at-home moms, they’ll be empty nesters soon and are thinking about starting a coffee shop or party-planning agency in Thousand Oaks. Buying a franchise seemed like “the easy way out,” McLaughlin said, because the business plan was established.
So far, the downturn in the housing industry hasn’t dramatically affected small businesses, said Sandy Buck, an outreach specialist with the Los Angeles office of the U.S. Small Business Administration.
“It’s like apples and oranges,” she said.
That doesn’t mean every franchise operator with a booth at the Convention Center will succeed.
“A lot of people in this room won’t be here next year,” said Jeff Austin, vice president of franchise lending at Comerica Bank. “But the next McDonald’s might be in this room too.”