Entrepreneurs Picking More Franchises
Established name, business plan makes financing easier to secure.
Redding.com:
For shoppers at Lowry Town Center in Denver, Squeeze Fresh Smoothies is just the citrus-colored shake shop on the corner. But there’s more to it.
Squeeze, based in Greenwood Village, Colo., and founded by former Quiznos Seattle-area director Richard Dean, is one of a growing number of companies that is franchising for faster growth.
Most recently, the company signed deals to open 75 more of the smoothie shops in Arizona and California during the next 7 years.
Nationally, 767,483 franchises have created more than 18 million jobs, nearly 14% of the country’s private-sector employment, according to the most recent figures from the International Franchise Association. Those businesses generated $506.6 billion in payroll in 2003, the most recent IFA numbers available.
For franchisees, the attraction is often clear: They start their own businesses but with backup, training and often an established name. Financing comes more easily to franchisees than to pure startups because lenders and guarantors such as the U.S. Small Business Administration are more likely to approve loans for franchisees signing on to a proven concept.
Other economic reasons also are adding to the growth of franchising, said Kevin L. Hogan, president of Liberty Development which has also advised Shell Oil, Church’s Chicken and Bruegger’s Bagels.
After the stock market burned investors earlier this decade, many looked for alternative investments, Hogan said.
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