Franchises get head start on starting businesses

Mrs. Boden…said the fees have been somewhat difficult to pay during the recession. However, she has grown her business. Thursday, the center has three part-time employees and annual sales of about $60,000.

Toledo Blade
September 23, 2010

Franchises get head start on starting businesses
Sheena Harrison

Lynn_Boden_Curves.jpg

Lynn Boden says the Curves franchise support has helped her Point Place fitness center grow. (THE BLADE/LORI KING)

Tom Curdes, the co-owner of two local Weed Man franchises, believes franchising has played a crucial role in the growth of his business.

Weed Man, a Canadian company, gave corporate support that helped him write his first business plan. That document allowed Mr. Curdes to secure financing and buy a 16,000-square-foot building in Holland last May.

He's confident that kind of assistance will continue to benefit his franchises, which had $750,000 in sales last year. "Had it not been for my franchisor, who worked with me very diligently to put a business plan together, I probably never would have done this," said Mr. Curdes, who has 25 employees among his Weed Man businesses and his independently owned company, Barron's Lawn Service.

Mr. Curdes is one of thousands of franchisees whose businesses affect the economy, according to U.S. Census Bureau data.

For the first time, the agency recorded and analyzed statistics on franchise businesses in its 2007 economic census. The survey is conducted every five years, and franchise information was issued last week.

The bureau received responses from 453,326 franchises, which represented 10.5 percent of the 4.3 million companies surveyed for 2007. Those companies reported about $1.3 trillion in total sales for that year, compared to $7.7 trillion for all businesses. They also paid $153.7 billion in salaries to 7.9 million employees.

Statistician economist Andrew Hait said the Census Bureau was surprised to see that franchises make up a substantial part of the nation's businesses. The bureau didn't study the number employed by each franchise. But Mr. Hait said many of the businesses were in industries that typically include small companies, including fast food, educational services, and diet and fitness centers.

That may be because franchises provide support to small business owners who pay for it, compared to independent entrepreneurs who usually go it alone.

"The franchise agreements give them a head start in getting themselves going," Mr. Hait said.

That was the case for Lynn Boden, who owns a Curves fitness center in Point Place. Mrs. Boden bought the business three years ago from its previous owner, who opened the business in 2003.

Mrs. Boden pays monthly franchise and marketing fees that provide her business with targeted advertising campaigns and technical assistance, among other services. She said the fees have been somewhat difficult to pay during the recession.

However, she has grown her business. Thursday, the center has three part-time employees and annual sales of about $60,000.

She believes Curves' franchise support will help her build the company. "I do think that I get something in return for that franchise payment I'm making," Mrs. Boden said.

Mr. Curdes said the franchise costs have been manageable for Weed Man. They are paid seasonally, based on the number of company vehicles. The assistance Mr. Curdes pays for from Weed Man has made the business more successful than it would have been on its own.

"The national buying power and the negotiations they do for us behind the scenes … I couldn't do that myself," he said.

Contact Sheena Harrison at: moc.edalbeht|nosirrahs#moc.edalbeht|nosirrahs or 419-724-6103.

http://toledoblade.com/article/20100923/BUSINESS03/9220379/-1/BUSINESS01


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