turing, Brewer claims. “Franchising
contributes $2.1 trillion in economic
output.”
She admits, though, that McDonald’s is a name that is “almost synonymous with franchising,” but is quick to
point out several other examples, from
hotel chains to business support services, in order to highlight the diversity of franchising concepts. While
the options for individuals looking to
franchise are many, the industry faces
one key challenge. “Access to capital
is biggest impediment to getting into
the franchise business,” says Brewer,
“but money is certainly flowing a little
more freely than it was in the 2009 to
2011 period.”
Kelli Holmes, owner and founder
of the TEAM (Together Everyone
Achieves More) Referral Network,
echoes Brewer’s sentiments. “Loans
and lines of credit are tough to come
by these days. Hopefully, things are
loosening up
a bit. Let’s get
these people
owning businesses and
employing
people!” Holmes describes
TEAM as
“an ‘exclusive
category’ reHolmes
ferral organization.” Meetings are organized
around local chapters, and each chapter is made up of members who meet
weekly and, using the TEAM system,
develop strategic business relationships that help grow their business
through referrals.
Part of the work that Brewer
does to improve opportunities for
franchisees and franchisors is work
with the financial industry to “loosen
things up.”
The IFA “has worked very closely
with the banking industry to make
sure the money is freed up, working
with government agencies and banks
to free up capital,” she says.
Mark Daly, the national media director at Anytime Fitness, also notes
the importance of working with financial institutions from the franchisor
side. “Our finance department helps
potential franchisees find financing.
You need to
be a reputable franchisor in order
for the SBA
to be eager
to lend money to your
franchisees.
Anytime Fitness is highly
Daly
rated by the
SBA because our franchisees are successful and they are able to pay back
their loans,” Daly said.
Daly credits a strong support
network available to franchisees for
success when it comes to repaying
loans and growth. “We have a huge
franchise consulting team. We have
mandatory weeklong training for our
franchisees. Before they open the club,
they know how to market the club,
how the operating systems serve best
practices.”
The support continues after the
initial set up. “Then, we have monthly
regional advanced training for our
existing franchisees. A team of about
half a dozen corporate staffers go to
Seattle, or San Antonio, or Baton
Rogue, and franchisees from a driving distance will show up for a two
to three day vitals training. We don’t
just take the franchise fee and say
‘good luck.’ We support you,” Daly
said.
Holmes recognizes the importance of supporting business owners,
and her franchises seek to do just
that, franchise or not. The TEAM
Referral Network focuses on what
she calls “building a better mouse
trap,” concentrating on innovation
among business owners and building
networks between entrepreneurs. It
has chapters throughout the Western
United States. “Our members are
entrepreneurs: small business owners,
consultants, independent contractors,
those responsible for generating their
own success,” says Holmes. In 2011,
TEAM was recognized by Entrepreneur Magazine as one of 98 “Brave
New Franchises,” and designated as
a Top 500 Franchise for both 2012
and 2013.
Access to capital and business
support is key in franchising. If a
particular franchise brand has a high
rate of failure, it’s likely to result in
less lending activity to potential franchisees of that brand. “We realize it
is important for the brand reputation
to have an extremely low failure rate.
Anytime Fitness’ failure rate is less
than 2 percent,” says Daly.
Brewer agrees, noting, however,
that there is no silver bullet to finding
financing. “The industry is variable—
when looking at individual approaches
The Metropolitan Airports
Commission (MAC) supports the
Airport Minority Advisory Council’s (AMAC) dedication in promoting
minority-owned, women-owned and
disadvantaged business enterprises
in airport contracting opportunities.
Your efforts to eliminating barriers
for small women and minority-owned
businesses as well as assisting
agencies in implementing small
business development programs is
exemplary.
As a proud member of your organization we congratulate you and wish
you continued success!
Contact: Debra Johnson at (612)
726 8193 or debra.johnson@msp
mac.org or visit www.mspairport.com
MBE
May/June 2013
13