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Confessions of a 35-Year Serial Franchisee
by David Vance

If Bruce Springsteen was born to run, I guess I was born to franchise. I have owned and operated more than 25 locations of seven different franchise companies since I first took the plunge in 1971. I've looked at and rejected dozens of others. In the process, I've learned a lifetime of lessons about every aspect of franchising.

My background ranges from auto-painting shops and hair salons to food franchises, including the 12 Hungry Howie's Pizza restaurants and two Subways that I own today. That range of experience gives me a unique perspective on what works, what doesn't, and how to evaluate a franchisor. I got the franchise bug while attending Kent State University and then the University of Akron in Ohio. (Akron is my hometown, and Kent State is a short drive away.)

I was splitting my time between playing college football and studying marketing. Because I was on a business-related track, I started reading the Wall Street Journal. I quickly discovered their Thursday franchise section and was immediately hooked.

I think that part of the appeal was the idea of being your own boss. I started doing odd jobs at the age of nine, from delivering newspapers to trapping muskrats for $3 a hide, so I was used to working by myself.

I also had an entrepreneurial grandfather who came to the U.S. from Czechoslovakia in the 1920s without a dollar or a word of English. He assembled a nest egg by working at Goodyear and went on to open two restaurants. So maybe it was in my blood.

In addition, I liked the odds. Every franchise magazine I've ever read has said that the franchise success rate is 90% compared to a failure rate of 90% for businesses that lack the franchise safety net. I knew nothing about running a business, but I knew that I would prefer to put my money as well as my sweat equity into a venture where I was less likely to lose my shirt.

Nevertheless, that's exactly what happened during my first franchise attempt. While I was still in college, I decided to open a Maryland Fried Chicken and recruited a high school friend to join me. We cobbled together the $10,000 franchise fee, but the chain declared bankruptcy before we even opened. We lost our entire investment.

Most people would have given up on franchising at that point, but I didn't let that one experience sour me on the whole industry. I knew I would try again, and I also knew I would do a better job of checking out the franchisor the next time around. I had been too wet behind the ears to know how to go about doing my due diligence, and I wouldn't make the same mistake twice.

My next opportunity came a few years later. By this time, I had earned my undergraduate degree in marketing from Akron U, started and abandoned a graduate program in psychology, and was ready to go into business full-time.

One day, I saw a sign on an empty lot. It said that a Dunkin' Donuts was being built on the site and that a franchisee was needed. It was 1971 and the chain already had several hundred stores, but this would be the first one in Akron. I had a vague familiarity with the operation from my Wall Street Journal reading and decided to give it a shot.

I teamed with the same partner, and together we raised the money we needed by begging $1,000 pledges from as many relatives as we could. We paid the franchise fee, which if memory serves was $20,000, and then went to Massachusetts to meet the founder, Bill Rosenberg, and his son Bob. We liked what we saw, forged ahead, and opened our doors six months later.

Within a year, we had launched a second Dunkin' Donuts in Canton, and shortly after that I opened a satellite location five miles from the Akron store. I ran the first store, my partner ran the second, and my wife ran the third. Eventually my partner and I split up, and I got out of the donut business in 1978.

Since then, I have owned a MAACO auto body paint service; three Country Kitchen Restaurant locations, including one that was No. 1 in the country during my seven-year involvement; five Subway stores; a Kenny Rogers Roasters chicken restaurant; and now my 12 Hungry Howie's -- all in Ohio. I have also signed another 13-store agreement with Hungry Howie's to lock up the Akron/Canton area.

My only foray outside my home state was to Florida, where I briefly owned a Great Expecta-tions Precision Haircutters store near the University of Gainesville.

Through the years, I've developed a system for screening a franchise. First I review all the franchise materials. Next I visit other franchisees to hear if they're making money and how they feel about the company.

If I find more than one disgruntled franchise owner, I don't bother to go any further. If the reports are positive, I look at the company's profit-and-loss statements if they offer them (most do). If the numbers look good, I take a trip to the home office to meet the managers face to face. A couple of conversations tell me if they know what they're doing and if they care more about selling franchises than supporting franchisees. I've also learned the importance of being a hands-on operator whenever you open your first location of a given franchise. It's how you learn the business, and you really can't do it any other way.

At Dunkin' Donuts, for example, I sometimes worked three 24-hour days in a row with an hour of sleep on the flour sacks in the back every so often before going back to baking French Crullers and Boston Kremes. At MAACO I did the estimates for the body work. At Country Kitchen I bused tables so I could talk to customers. At Subway I did my apprenticeship behind the counter, making sandwiches alongside my employees.

That's also how I discovered that you can't run a business from 1,000 miles away. I tried that long-distance strategy with my hair salon in Florida, and I sold the location back to the company six months later because I could see it wasn't going to work.

Another issue that I've grappled with repeatedly is when to open additional units. I have a simple rule: grab any location in your territory that looks good because if you don't, a competitor will.

I'm constantly on the lookout, and I work with several real estate developers who scout for me as well. If a site has good visibility, easy access and the right demographics, I usually bite -- even if it means growing a bit faster than I want to. Good locations are too hard to find to let one pass you by.

The challenge, of course, is finding qualified managers to run each store as you grow, and that's something that you can't entirely control. I try to groom people from the time they join me so that I can promote from within when I open a new location or need an area manager. I tell my employees the same thing that a professor at Akron U once told me: When you work for a small company, you can grow with it.

My son and two of my three daughters are active in the business, and that helps. My son oversees four Hungry Howie's stores, and each daughter manages a Subway in addition to working in the office. But that doesn't cover my 14 operations, and I'm constantly scrambling to find the right people even though I now have close to 300 employees.

Even the right people don't guarantee an easy ride. One of my restaurants took nearly four years to catch on, for example. But my gut told me that it would work, and in the fourth year sales doubled and kept on growing. It turned out to be one of my most successful ventures.

Moral of the story: trust your gut and persevere. Franchising may not be a 100% sure thing, but it's less of a risk than starting a business from scratch. Except for my first unopened franchise, I've made money or at least broken even on every venture. After some 25 stores in 35 years, I would call that a pretty good track record.


Self-described "serial franchisee" David Vance knows his way around the kitchen, especially in his dozen Hungry Howie's Pizza restaurant franchises.
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