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April 2009

FRANCHISING: Top 25 Franchises for Hispanics

Few would disagree that franchising has historically been an exceptionally successful model for gaining wealth and security.

By Rob Bond And C. Everett Wallace
Marcelo Perez Dalannays

STORY TOOLS

Few would disagree that franchising has historically been an exceptionally successful model for gaining wealth and security. Even though there are attendant costs, following someone else’s time-proven system can be infinitely better for most people than starting a business from scratch.

Although there are no firm statistics on the percentage of franchised outlets currently owned by Hispanics, the National Minority Franchising Initiative (NMFI) estimates it is no more than 6 percent. Considering that Hispanics comprise approximately 15 percent of the population, this is an unacceptable imbalance—and one that progressive and business-oriented franchisors are trying to change.

While some franchisors may seek to correct this imbalance out of a sense of fairness, a growing number also see tangible economic benefit to increasing their percentage of Hispanic-owned outlets.

By some estimates, the spending power of Hispanics is nearing $1 trillion. Accordingly, it is in the best interests of franchisors as well as Hispanics, as a group, to ensure that they capture their share of that money through businesses within their own communities. Franchising can provide that opportunity.

Given that there are over 3,000 active North American franchisors trying to recruit franchisees, it can be overwhelming to select the franchise system that best fits an individual’s strengths and weaknesses. Some franchisors represent strong brands. Others are terrible, both in terms of their underlying system and their support of franchisees.

How do you find the gems amongst the rubble? A logical starting point is to consider franchisors that aggressively court Latinos, as well as those that support them once they become part of the system.

In an attempt to find out which franchisors are interested in recruiting Hispanics in particular, the NMFI recently surveyed franchisors. The questionnaire was designed to determine both the current number of Hispanic franchisees within the system and the proportion of Hispanic executives in the franchisor’s senior management.

Based upon the results of the survey as well as knowledge of various franchise systems, NMFI selected 25 franchisors that represent excellent prospects. Several have modest costs of entry, some have products and/or services that are especially recession-proof, and some are simply strong, proven franchise systems that provide excellent ongoing support.

Keep in mind that this is most certainly not a definitive list, only a preliminary screen to get you started. There are numerous variables that must be seriously evaluated before committing to a franchise. These include historical performance, brand identification, market dynamics, franchisee satisfation, the level of initial training and ongoing support, financial stability, and various other key areas that must be explored.

7-Eleven
[Industry Type]
Retail Food
[Total Units] 35,603
[Projected New Units—Next 12 Months] 200
[Cash Investment] Varies by Store
[Total Investment] Varies
[Average Total Investment] Varies by Store
[Ongoing Royalty] Gross Profit Split
[Employees Needed] 5 full-time, 5 part-time
[Who they are] 7-Eleven is the world’s largest convenience retail chain. Based in Dallas, the company operates, franchises or licenses more than 7,600 stores in North America. Keeping in mind the importance of neighborhood focus, the company assists and empowers franchisees to make decisions based on what their store’s customers want and need.

Athlete’s Foot, The
[IT] Sports Retail and Footwear
[TU] 569
[PNU] 65
[CI] $85K
[TI] $200-$525K
[ATI] 275
[OR] 5%
[EN] 2 full-time, 6 part-time
[Who they are] The Athlete’s Foot, with more than 600 stores in 45 countries, is the leading international franchisor of namebrand athletic footwear. Franchisees will benefit from headquarters’ support, including training, advertising, real estate, store design and product selection.

Bonus Building Care
[IT] Maintenance Services
[TU] 2,273
[PNU] 100
[CI] Varies
[TI] $8.8-$14.7K
[ATI] 14
[OR] 10%
[EN] Varies
[Who they are] Commercial cleaning offers more stability than many businesses, and Bonus is considered a leader in the field. Franchisees get support and training not only in the cleaning aspects of the business, but in areas such as sales, billing, accounting, customer service, insurance, financing, clerical and procedural assistance as well as opportunities for expansion.

Captain D’s
[IT] Fast Food Restaurants
[TU] 551
[PNU] 5
[CI] $300K
[TI] $1.3MM
[ATI] 1,300
[OR] 4.5%
[EN] 3-5 full-time, 20 part-time
[Who they are] Captain D’s restaurants offer high-quality seafood in a fast food environment. Launched in 1969, Captain D’s has grown to almost 600 restaurants in 23 states. While the system is currently over 50 percent corporate-owned, development in new markets nationwide is happening at an increasing pace by franchisees. The company has a Veterans and Minority Franchise Program that allows franchisees to defer half of the licensing fee until the second anniversary of the restaurant’s opening.

Carl’s Jr.

[IT] Fast Food Restaurants
[TU] 1,152
[CI] $300K
[TI] $1.1MM
[ATI] 974
[OR] 4%
[EN] 33
[Who they are] Over the last 60 years Carl’s Jr. has built a reputation as one of America’s premier chains for charbroiled burgers. Today, there are more than 1,100 Carl’s Jr. restaurants worldwide, with more than 300 dual-branded Carl’s Jr./Green Burrito restaurants. Extensive assistance is available to franchisees for site selection, restaurant design, construction and equipment ordering.

Choice Hotels International
[IT] Lodging
[TU] 5,771
[CI] 20-30% Costs
[TI] $2.3-$12.6M
[ATI] 7,450
[OR] 2.75-5.1%
[EN] Varies
[Who they are] Choice Hotels is the leading hotel franchisor with over 65 years experience. Brands include Comfort Inn, Comfort Suites, Quality, Sleep Inn, Clarion, MainStay Suites, Suburban Extended Stay, Econo Lodge, Rodeway Inn and the upscale, all-suites Cambria Suites.

Coverall Health-Based Cleaning System
[IT] Maintenance Services
[TU] 9,603
[PNU] 1,736
[CI] $2,000-$27,200
[TI] $10,612-$37,345
[ATI] 24
[OR] 5%
[EN] 1-2 full-time, 2-3 part-time
[Who they are] Coverall offers a different take on the office-cleaning service, focussing on cleaning at the “unseen” level by removing germs and pathogens that lead to employee illness. The company offers ongoing training of franchisees and their teams to ensure the most current knowledge of cleaning techniques.

Denny’s
[IT] Restaurants (Sit-Down)
[TU] 1,541
[PNU] 37
[CI] $350-$400K
[TI] $1M-$2.6M
[ATI] 1,900
[OR] 4%
[Who they are] For over 50 years, Denny’s has been the trusted leader in family dining with a brand awareness of almost 100 percent. Denny’s serves more than 26 million customers a month in 1500+ restaurants worldwide, which are open 24 hours a day.

Famous Famiglia
[IT] Fast Food Restaurants
[TU] 89
[PNU] 32
[CI] $200K
[TI] $250-$700K
[ATI] 375
[OR] 6%
[EN] 4 full-time, 8 part-time
[Who they are] Famous Famiglia is an award-winning national pizza brand with leading sales in the pizza segment. Operating nationwide, it has earned several industry awards for product quality and customer service. Expansion plans include high-profile markets and locations such as airports, shopping plazas, universities, and more.

Fantastic Sams
[IT] Beauty Salons
[TU] 1,363
[PNU] 130
[CI] $60K
[TI] $103-$230.1K
[ATI] 150
[OR] Varies by Region
[EN] 8 full-time
[Who they are] Fantastic Sams is one of the world’s largest full-service hair care franchises, with nearly 1,400 salons worldwide. Franchisees receive both local and national support through ongoing management training, educational programs and national conferences, as well as advertising and other benefits. No hair care experience required.

Fast-Fix Jewelry and Watch Repairs

[IT] Retail Stores
[TU] 160
[PNU] 15
[CI] $75K-$125K
[TI] $142,750-$307,750
[ATI] 208
[OR] 5%
[EN] 3 full-time, 2 part-time
[Who they are] With a 25-year track record, Fast-Fix Jewelry and Watch Repairs is the top national chain of jewelry and watch repair stores with more than 160 franchised locations. The stores and kiosks operate in regional malls that afford customers “while-they-shop” jewelry and watch repair service. Prior jewelry experience is not necessary, as Fast-Fix has full training.

FASTSIGNS
[IT] Retail Stores
[TU] 556
[PNU] 20
[CI] $75K
[TI] $222,251-$325,860
[ATI] 265
[OR] 8%
[EN] 3 full-time
[Who they are] A pioneer in the sign industry, Fastsigns centers use computers to create custom signs, graphics, banners, trade show exhibits, vehicle graphics and more. The company has continued to grow by optimizing its technology and expanding the scope of its products and services.

Foot Solutions
[IT] Retail Stores
[TU] 287
[PNU] 80
[CI] $50-$65K
[TI] $195.5-$236.5K
[ATI] 216
[OR] 5%
[EN] 2-3 full-time
[Who they are] This company has created its own niche in the health & wellness specialty retail segment, with a focus on the Baby Boomer and 40-plus market. Stores offer custom shoe inserts and specialty footwear for those who need foot support, including people who stand on their feet more than four hours, athletes, and those whose feet are hard to fit. The company claims to have no major competitors, high referrals and profit margins, and steady business not subject to seasonal fluctuations.

Jani-King International
[IT] Maintenance Services
[TU] 13,027
[PNU] 1,500
[CI] $2.9-$33K
[TI] $2.9-$40K
[ATI] 22
[OR] 10%
[Who they are] Jani-King International is the world’s largest commercial cleaning franchisor, with locations in 19 countries and over 125 regions in the U. S. and abroad. Franchise opportunities include initial customer contracts, training, continuous local support, administrative and accounting assistance, an equipment leasing program and national advertising.

Jan-Pro Cleaning Systems

[IT] Maintenance Services
[TU] 8,093
[PNU] 12 Masters and over 2,000 units
[CI] $1-$30K
[TI] $5-$60K
[ATI] 20
[OR] 14%
[Who they are] Jan-Pro allows you to enter one of the fastest-growing industries by becoming your own boss through the guidance and support of an established organization. The company is recognized as a major force in the commercial cleaning industry, with sales of over $175 million and almost 7,000 franchisees nationally. Most importantly, these numbers have more than doubled since 2003.

Kumon North America
[IT] Education Tutoring
[TU] 25,947
[PNU] 120
[TI] $30.9-$129.5K
[ATI] $50
[OR] $32-36/subj./mo.
[EN] 1 full-time, 1-3 part-time
[Who they are] Kumon helps children master fundamental skills using techniques developed by a Japanese teacher. The work benefits the community by helping children realize their potential. Franchisees have relatively modest startup and operational costs. Although a four-year college degree is mandatory, a background in teaching is not essential.

Liberty Tax Service
[IT] Business Services
[TU] 3,117
[PNU] 300-500
[CI] $40K
[TI] $56.8-$69.9K
[ATI] $57K
[OR] Varies
[EN] 4-6 full-time, 2 part-time
[Who they are] Recession or not, there’s a growing market of taxpayers, and approximately 63 percent of them outsource the tax preparation to paid professionals. Liberty Tax Service is ranked the No.1 tax franchise on the latest Entrepreneur magazine “Franchise 500.” Liberty’s growth is fueled by a proven operating system that has been fine-tuned by the leadership and field support staff ’s combined 600 years of experience. Founder/CEO John Hewitt has worked 40 tax seasons, including 12 years with H&R Block.

Little Caesars
[IT] Fast Food Restaurants
[CI] $50K
[TI] $185-$519K
[OR] 6%
[EN] 30
[Who they are] With 50 years in business, Little Caesars’ efficient operating system enables franchisees’ costs to remain modest. The company provides comprehensive training that focuses on all aspects of the business—product preparation, marketing, finance, cash management, human resources, multi-store supervision, customer service, loss prevention, and real estate. They also provide support as the business grows.

Maids Home Services, The
[IT] Maid Services
[TU] 1,053
[PNU] 80
[CI] $100K-$150K
[TI] $175-$225K
[ATI] 225
[OR] 3.9-6.9%
[EN] 2 full-time, 6 to start part-time (maids)
[Who they are] Distinguished as the fastest growing residential cleaning franchise four years running by Entrepreneur magazine, The Maids provides a comprehensive package of training, support, and exclusive territory and is in touch with new franchisees a minimum of 195 days within the first year.

Mr. Appliance
[IT] Maintenance Services
[TU] 142
[PNU] 50
[CI] $30-$75K
[TI] $30-$75K
[ATI] $30-$70K
[OR] 4-7%
[EN] Varies
[Who they are] Mr. Appliance is North America’s largest appliance repair franchise system. Established in 1996, it provides full-service residential and light commercial appliance repair. Mr. Appliance has more than 140 locations throughout the United States and Canada and is consistently ranked among the top home service franchises.

PostNet
[IT] Shipping Services
[TU] 850
[PNU] 100
[CI] $50K
[TI] $174-$196K
[ATI] 185
[OR] 5%
[EN] 2 full-time, 1 part-time
[Who they are] PostNet is a full service, diversified business center with over 900 locations worldwide. Centers are fully digitally enabled, offering high speed Internet access, computer time rental, desktop publishing services, scanning, digital printing, and much more.

ServiceMaster Clean
[IT] Maintenance Services
[TU] 4,488
[PNU] 150
[CI] $12K
[TI] $16.9-$43K
[ATI] 30
[OR] 4-10%
[EN] 3 full-time, 2 part-time
[Who they are] With over 55 years of franchising experience and over 4,000 franchises, ServiceMaster Clean offers franchise opportunities in three distinct categories: Commercial cleaning services, residential carpet & upholstery cleaning, and disaster restoration. Financing is provided for the initial franchise fee, startup equipment and vehicles to qualified candidates.

Sign-A-Rama

[IT] Retail Stores
[TU] 905
[PNU] 100
[CI] $48K
[TI] $150K
[ATI] 150
[OR] 6%
[EN] 3 full-time
[Who they are] Sign-A-Rama, the world’s largest full-service business-to-business sign franchise, works to provide financing assistance to existing franchisees as well as financing to potential franchisees to get them into business. Services include equipment financing, credit card systems, education on government lending programs and a streamlined application process.

Sylvan Learning Centers
[IT] Education-Tutoring
[TU] 1,119
[PNU] 50
[CI] $101.1-$171.3K
[TI] $188.6-$304.6K
[ATI] 225
[OR] 8-9%
[EN] 2 full-time, 5 part-time
[Who they are] Sylvan is one of the most highly recognized names in after-school tutoring. The company spends three times more on advertising than any other learning center brand. Plus, it has a proven track record in educational services. Sylvan services pre-kindergarten through adult more than 1,100 locations worldwide.

Vanguard Cleaning Systems
[IT] Maintenance Services
[TU] 1,524
[PNU] 659
[CI] $1.5-$35K
[TI] $7-$35K
[ATI] 12
[OR] 5%
[EN] 1 part-time
[Who they are] Vanguard has been in the commercial cleaning industry since 1984 and is a national leader in providing high-quality janitorial services for commercial facilities. Vanguard is currently seeking unit and master franchisees in the United States and Canada. Currently, Vanguard has 1,287 franchises and 40 regional offices.

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