Prime territory? Four franchisors see Springs as ripe for business

Like pretty much every corner of the economy, franchising has taken its lumps during the recession.

Franchise businesses in the U.S. shed more than 400,000 jobs in 2009, according to a report prepared for the International Franchise Association.

The number of franchise businesses stayed flat last year, after enjoying average annual growth of 5.6 percent from 2001 to 2005.

For 2010, a forecast prepared by PricewaterhouseCoopers foresaw modest growth in the franchise world — a 2 percent increase in businesses and a 0.4 percent gain in jobs.

And as franchisors grow, no matter how slightly, some have set their sights on Colorado Springs, looking to either enter or expand in the area.

Here are four companies that see the Springs as prime territory:

GUIER FENCE
Guier Fence touts itself as the No. 1 fence company in the Kansas City, Mo., area. It’s also the first fencing franchise.

Lea Bailes’ father-in-law, Kelly Guier, started the business in his basement in 1979. Bailes joined the company in 2005 to help Guier expand; last year, he took over the business and early this year he rolled out the franchise operation. So far, that operation is essentially a home-grown enterprise: The first franchisees include Bailes’ brother Ryan, in Houston, and Guier’s director of franchise development, in Omaha, Neb.

Guier boasts two franchise models: the “Fence Professional,” which involves selling and installing Guier fencing and could be a home-based business, reflecting Guier’s origins, and a grander “Showroom” model. (Guier has three showrooms in the Kansas City area.) The estimated startup cost ranges from roughly $53,000 to $127,000 for the Fence Professional model and $270,000 to $550,000 for the Showroom.

Bailes sees Colorado — and Colorado Springs in particular — as ideal for Guier.

“From residential fence to agricultural fence to commercial fence, there’s just a lot of fence in Colorado,” he said. “So for a franchisee, there’s a great market opportunity. And in Colorado Springs, there’s not a lot of competition.”

Guier Fence recently opened a company-owned store in Steamboat Springs as a way to build a brand presence in the state. To that end, the company also has a salesperson in Denver selling and installing Guier fencing.

Sales skills tops the list of what Bailes is looking for in a franchisee.

“We don’t necessarily need someone who has trade skills or construction experience or installation experience, though all those things are helpful. We are really looking for someone who is a really strong salesperson.”

MORE INFORMATION: 1-800-845-9839 or guierfence.com/franchise-opportunity

AAMCO
AAMCO, the world’s largest chain of transmission specialists, has been franchising for nearly 50 years and has about 900 locations. The company became a full-service auto repair business in 2005.

The down economy has created growth opportunities for AAMCO, said Tony Padulo, vice president of franchise sales and development. People are keeping their old cars longer; at the same time, there are fewer places to service those cars as automakers reduce their networks of dealers and some independent service centers fall victim to the economy.

“For those of us who are still in the business, there’s a great opportunity to keep growing,” Padulo said.

And one place to grow is Colorado Springs. The Springs market is already home to two AAMCO locations; based on the number of drivers in the area, Padulo said, “we believe there is room for two other locations.”

AAMCO cites an initial investment for franchisees of $225,000 to $299,000. In seeking franchisees, Padulo wants someone with a passion for the brand, business or management experience, and an appreciation for the concept of franchising.

“Operating a franchise is very different from starting your own business,” Padulo noted. By buying a franchise such as AAMCO’s, you’re minimizing risk and buying into a proven system, he said, but you also must be willing to work within certain parameters.

With AAMCO’s extensive training and support systems, “we are actually not looking for people in the automotive business,” he said. It’s easier, he said, to teach someone from scratch.

MORE INFORMATION: aamcofranchises.com or 1-800-523-0402

HAND & STONE
Hand & Stone, a massage and facial spa, was launched by a physical therapist in New Jersey in 2005 and has grown to about 30 locations. Erik Bostrom operates a Hand & Stone franchise in Highlands Ranch; he’s also regional developer for Colorado and is looking at three markets: northern Colorado, Denver and Colorado Springs. He envisions two to three locations in the Springs and 20 or so in the Denver area.

In Colorado, “we’re looking at kind of a perfect storm of conditions that make it perfect to grow,” he said. Colorado’s economy is starting to recover more quickly than the nation as a whole, he said; at the same time, a soft commercial real estate market makes acquiring property easier. And Colorado’s active, healthy lifestyle provides the ideal clientele, he added.

Bostrom said he is particularly interested in the Springs because of its large population of former military.

“Folks that are former military tend to do very well in franchises,” he said. “They understand the benefits of following a designed system.”

Bostrom cites a total initial investment of $280,000 to $375,000 for a franchisee. Beyond the finances, he said, he’s looking for franchisees with solid management skills.

“We’re going to teach you the industry,” he said. “That’s what we’re experts in.”

Another massage franchise, Massage Envy, is already settled in town with two locations in the Springs.

“I give Massage Envy credit,” Bostrom said. “They were the first in this industry.”
But he said, “I think we’ve built a better mousetrap in a number of different ways.” One factor he cites is the breadth of Hand & Stone’s services, going beyond massage to include services such as facials, chemical peels, microdermabrasion and a variety of waxing services.

MORE INFORMATION: handandstonefranchise.com

PEDAL TO PROPERTIES

Pedal to Properties is a Boulder-based real estate company known for offering buyers a unique way to see neighborhoods — on the company’s distinctive cruiser bikes.

It’s working to roll out the concept nationwide: Pedal to Properties franchises opened this year in Northampton, Mass., and Sonoma, Calif.
Australian businessman Tim Majors became a 50 percent partner in the company last year with the intent of growing nationally.

“The bikes are a really cool thing, but I knew for us to grow nationally and sell franchises, we had to be a lot more than just bikes,” he said. So Majors approached a Silicon Valley company to make sure Pedal to Properties had the top technology and also has poured money into PR efforts “to really give us a high profile.”

Major’s goal is to have 20 offices open by year’s end and 100 within three years.

“I think that’s realistic,” he said. “The first 20 are always the toughest 20.”

Colorado Springs is one market he’s eyeing.

“For one, it’s in our backyard, and, secondly, it’s a perfect demographic for our concept. Colorado Springs is world-renowned as being an outdoor-enthusiast kind of town.”

In plotting the company’s growth, Majors is being careful not to oversaturate a market and thus dilute the concept. He sees the Springs, for example, as handling just one Pedal to Properties franchise.

The cost to a franchisee includes a $25,000 franchise fee, which the company offers to help finance. Other than that, Majors said, “there are few other costs.” Pedal to Properties manufactures its own bikes; Majors suggests an agent buy 10 to 20. The company provides extensive agent-recruitment training and social-media training through a third party.

A prospective franchisee, Majors said, could be a seasoned Realtor or an inexperienced agent “who is hungry and go-get-em.”

“My No. 1 criteria is, do you have a passion for our concept?”

MORE INFORMATION: pedaltoproperties.com
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Call the writer at 636-0272.

SELECTING A FRANCHISE

Interested in becoming a franchisee? Before selecting a franchise system, the Federal Trade Commission suggests analyzing your investment (how much money do you have to invest and how much can you afford to lose?), your abilities and your goals.

When selecting a system, look at these areas:

Demand — Is there a demand for the franchisor’s products or services in your community? Is it seasonal or evergreen? Could you be dealing with a fad?

Competition — What’s the level of competition, nationally, regionally and locally?

Name recognition — Buying a franchise gives you the right to associate with the company’s name or brand. The more widely recognized the name, the more likely it is to draw in customers.

Franchisor’s experience — How long has the franchisor managed a franchise system?

Growth — A company that grows too quickly may not be able to support its franchisees with the services it promises. Investigate the franchisor’s financial assets and resources; are they sufficient to support the franchisees?

SOURCE: www.ftc.gov