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As more entrepreneurs pick franchising, sector grows

shoptalk_cp_010213
T. Ortega Gaines - ogaines@charlotteobserver.com
This Jersey Mike's in Dilworth is owned by longtime franchise owner Nick Smith. Over the last 16 years, he has owned 20 franchise stores in the Charlotte area. T.Ortega Gaines - ogaines@charlotteobserver.com

The franchise industry is still on the rise, according a recent study by the International Franchise Association.

The study shows that in 2012, the number of franchise establishments in the U.S. increased by 1.5 percent. The IFA predicts the number will increase by another 1.4 percent in 2013 – from 746,828 to 757,055 (an increase of 10,227).

The number of jobs in franchises also is estimated to increase in 2013, from 8.1 million to nearly 8.3 million, a 2 percent increase.

Here’s the IFA’s explanation: Because unemployment and under-employment (taking lower pay and lower-level jobs) are still a reality for many Americans, some professionals look to a form of entrepreneurship with a proven track record.

To own a franchise you buy into an established brand through a license agreement, which can allow for a quicker business launch.

But if you’ve got an itch for entrepreneurship, how do you know if the franchise route is for you? We’ve covered several local franchisees in ShopTalk and they each offered tips for deciding and strategies for making your franchise work:

From Nick Smith, who has owned 20 franchise stores in the Charlotte area, including a Moe’s Southwest Grill and four Jersey Mike’s Subs restaurants:

• Be passionate about the concept: Franchises have an existing model and established elements. (For example, don’t expect to create your own menu at a Jersey Mike’s.) Make sure your passion lines up with the established elements of a franchise. If you believe in your product and service, your employees and customers will, too.

• Do your research: Talk with members of the franchise communities you’re interested in. Evaluate the support they say they get from their corporate parent. The corporate arm should have helped with site selection, operations, marketing, training and product purchasing. They also should be responsive and committed to helping your business grow.

• Recognize the risk, especially in this economy: Smith, a serial franchisee, has also experienced loss. In December he closed a Smallcakes Cupcakery/Freshberry Frozen Yogurt shop on East Boulevard because of slow traffic.

From Brian Sacco, who with his wife, Sally, opened Charlotte’s only ShelfGenie franchise in 2011. The business offers custom glide-out shelving for kitchens, bathrooms and pantries:

• Use consultants: Unlike many entrepreneurs, the Saccos weren’t sure what industry or niche market they wanted to be in, so they started talking with Entrepreneur Source, a group of franchise consultants, to explore their options. They took business-personality tests and considered about 20 different companies.

• Reach out for help: The Saccos found the franchise community was invaluable for support. On top of the general training, they began attending conferences and programs. They posted questions to community forums online and chatted with IT professionals about the company’s 3-D software.

Martin Snell, who opened a Hand & Stone Massage Spa in the Village at SouthPark:

• Be willing to partner: Snell connected with the city’s other Hand & Stone Massage Spa, located in Ballantyne, for advice, and the owners decided to split advertising costs. That made the expenses more palatable, Snell says.

• Make it your own: Although franchises have mandatory formulas, Snell said there can be room for personalization. Talk with the corporate office about what changes you can make.

McMillan: 704-358-6045

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