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Franchise!

By Hirsch, Rod
Publication: Mercer Business
Date: Sunday, April 1 2007

Scott Needham, president of Princeton Air Conditioning, has three divisions in his company, one of which is a franchise, LINC Services.

He's in a unique position to judge the merits of 100 percent complete ownership and making his own decisions as opposed to adhering to guidelines, regulations and regimens from a home office.

"When I cut the royalty check every month I don't look at it as a cost, I look at it as an investment in my company's future," Needham said.

Like Needham,

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Lauren Millner owns a franchise in Mercer County that keeps things cool - The Cold Stone Creamery in the Mercer Mall along Route One., in Lawrenceville.

The 26-year-old store owner agrees that owning a franchise is well worth sharing the profits with the parent company, as the marketing support and training provided allows her to stay focused on management of the store, its staff and making ice cream.

"The upside of owning a franchise is you have this whole team of people behind you that are constantly coming up with new concepts, they have the top, top, top people in the industry who've been in franchises for years; they know what to look for, they research different products, know how to market the products while you're running the business.

"There's this whole other team of people taking care of innovative stuff I wouldn't have the time or manpower for," she continued, "and there's also a team of people to support you if there are any kind of issues like machines breaking down."

Helping to prevent clients from breaking down by promoting fitness are husband-and-wife franchisors Jack and Paul Berger, who say the best thing about owning two Curves franchises just five miles apart from one another along Route One is the name recognition.

They are part of a national chain with 10,000 fitness centers cited as the fastest-growing company in the world of franchising. They're everywhere. "The good thing about it is you don't have to reinvent the wheel," Paula Berger said. "They have a system in place; follow the system and you get fantastic results."

The couple's timing was fortuitous; theirs was one of the first 1,000 Curves franchises to open in February 2002 off Quaker Bridge Road; in January 2005, they opened their second Curves on the Brunswick Circle.

Needham, Millner and the Bergers were all required to attend training at the corporate headquarters of their franchises before they opened their stores, and like most franchisors are in constant touch with the national or regional offices via email, faxes, newsletters and instore visits by representatives of the chain.

"When you first buy the rights to a Cold Stone you're required to go out to Arizona for two weeks training; every year we have a franchise meeting in Las Vegas and in addition to that there are quarterly market meetings in your territory to talk about new products and marketing strategies," Millner explained.

"There's a lot of value in the training component," added Needham. "My view of LINC Service is that they are a training service that happens to be in business. I get training from the top down, my managers, sales reps, all the way down to field service people; that's invaluable."

Needham was also chosen to be a member of LINC Service's Business Advisory Council.

"I'm one of the owners that meets twice a year with LINC Service; we are the voice of the contractors, about one hundred of us in the country. We help guide LINC Service down the right road, tell them what contractors are looking for, where they should focus their efforts, where tey should invest money in products and services.

"It's been a lot of fun," he added. "I've learned a lot being on that council."

The Bergers attended an intensive orientation and training session for one week at Curves' national headquarters in Waco, Texas to learn about everything from physiology to nutrition; there are regional meetings every four months.

The constant reinforcement is a positive in terms of ensuring local franchise owners are given the tools to succeed - knowledge marketing and advertising.

Millner, who opened her store in April 2005, said she wanted to own a business where she could have a positive impact on the community. She had gotten her first "taste" of Cold Stone in New York City.

"Cold Stone had just opened in Times Square," she said. "I saw this line outside the door; it was cold outside, and I couldn't understand why people were waiting, so of course I got in line. I was impressed with the quality of the product, the upbeat atmosphere and started researching it. I got in on the brink of Cold Stone really getting popular.

"Cold stone encourages establishing yourself within the community," she added. "They really want you to stand out; they understand each town is different and unique and encourage you to gear your business to your surrounding school organizations and businesses.

"One of the reasons I went into business was so I could be in a position to help various organizations," she continued. "I feel like if they come into my store then I want to give back to the community however we can whether that's with music, a fund raiser, a school principal scooping ice cream, it creates a fun place for kids to hang out."

On Day One, Millner demonstrated her commitment by donating 50 percent of her opening day proceeds to the Sunshine Foundation, which sends seriously ill children to Disney World.

As she did on her first anniversary, Millner will host a fund raising event this month with proceeds donated to the Mercer County United Way.

There are other advantages to owning a franchise power in numbers.

"Because Cold Stone is so big - they have 1,200 stores what they're able to do is negotiate some pretty competitive prices. They have a national contract with a national food distribution company; I wouldn't be able to get the prices that Cold Stone gets. I'm able to order directly from the supplier."

There is, however, some downside to owning a franchise.

"I have no life. I'm here seven days a week," Millner laughs, "but I've got some really fantastic kids who work here; I'm at the point now where they know almost as much as I do and I can leave early on a Friday or Saturday night."

Then there are the franchise fees.

"You're paying royalties, advertising fees and that can get kind or pricey, especially in the winter season; there are also limits on what you can and can't sell, different products like coffee or hot chocolate, I can't do that unless its approved by the corporate office."

The Bergers have one minor complaint.

"We aren't as happy with the support. In the beginning we'd dial a phone and we'd speak to a person, but because they've grown so much everything is on line now, but that's how the whole world has changed. That gets on my nerves a little but we do get the support we pay for," Sandy Berger said.