Many of those who seek the career of their dreams have found just what they want in a franchise. Offering everything from sandwiches to haircuts, insurance services to turnkey marketing programs, franchises also provide their business owners with a measure of flexibility and autonomy which might otherwise be hard to find.
Typically, the business owner, or franchisee, pays an up front fee to the parent company, the franchisor, and agrees to pay a percentage of future sales or earnings and possibly a contribution to an advertising pool as well. In exchange for these payments, the franchisee often receives rights to use the name, brand, and logo of the franchisor, marketing support, discounts on purchases of inventory, and access to proprietary information such as sales or demographic data.
A number of alumni of the College of Business Administration at UTC have found franchises to be their ticket to a successful, long-term career. Not only have they developed profitable operations, but they also enjoy the benefits of being their own boss. Their foundation for franchise success includes the combination of practical work experience and the education received at UTC.
Prior to the June, 2006, opening of Business Partner at 700 Market Street in Chattanooga, John Dyer worked with major insurer UnumProvident for 21 years. He graduated from UTC in 1983 with a bachelor of science degree in business management and returned to the university in 1993, completing his MBA (masters in business administration) two years later. When he decided to explore franchise opportunities, John contacted a local business consultant who identified various potential investments.
“I had been looking at franchising for a few years,” recalled Dyer, “out of personal interest and an overwhelming desire to do something on my own. The consultant showed me several opportunities which he thought I could be successful at, and then I went through the due diligence process. That included talking to other owners of the Business Partner franchise and looking at the necessary documentation to make an informed decision.”
Business Partner is a one stop marketing center organized around the concept of simplifying the lives of business owners. The company’s goal, says Dyer, is to make one contact to develop such necessities as promotional items, business cards, or themed apparel. “Instead of having to call seven different vendors for these things, we can do it all, saving the business owner time and money as well,” he said. “A good example would be a start-up landscaping business. The owner needs cards, a magnet sign for the side of his car, a website, and even a logo that we can develop and use throughout the materials.”
While he acknowledges that there are challenges to owning a business, John sees a bright future for his enterprise and credits UTC’s College of Business Administration with providing perspectives on management and leadership. “It is a first rate institution and always has been,” he commented. “I know several people who have gone through the MBA program, and it is easy to work during the day and get involved in the program during the evening. The flexibility and strength of the program are hard to deny, and many companies are willing to help pay for it.
“The MBA program is centered around group work, and we learned to get results from a group whether in a leadership position or following the lead of someone else,” he continued. “These groups are diverse, so it is challenging to get through the projects. The thing I found most effective is the confidence you gain from starting with different opinions and gaining a consensus, and it holds true with what I am doing now. Without the experience at UTC, I am not sure I would have that same level of confidence.”
A 2001 graduate of the College of Business Administration with a degree in business finance, James Shevlin spent several years in the financial services industry, working with brokerage firms in Chattanooga. While reading the newspaper, he noticed a classified ad which touted a bakery for sale. A short time later, he and wife, Valencia, became the owners of the local Great Harvest Bread Company franchise.
“I noticed that the ad kept appearing in the paper, and I decided to follow up,” said James. “I found that it was Great Harvest, and we had been customers of the store in Riverview for several years. Then, it occurred to me that it would be a good thing to work for myself. I did very specific research on this company and also considered my own experience with the local store. Great Harvest promotes a culture of independent owners that are free to do what they like and generous to the communities they are in.”
The Shevlins acquired the Great Harvest franchise, one of 208 across the country, in 2005 and relocated to a 2,000-square foot space at 541 Signal Mountain Road near the new Wal-Mart last December. The traffic count of 35,000 vehicles per day and 80,000 weekly walk-ins at the Wal-Mart have positioned Great Harvest for future growth. Plans include offering a variety of hot sandwiches and possibly opening another location.
“Great Harvest is a learning community,” Shevlin remarked. “They were not at all about saying, ‘Here is a business model and we are going to hold you to it.’ Their philosophy has filtered down and evolved into things like our Bread Board, a proprietary system in which owners swap recipes and talk about issues and ideas related to their businesses. This is not a get rich proposition coming right out of school, but it is great to find something you really want to do and a way to express yourself. There were several things that motivated me. Money was one of them, but to have time to take off and play golf is nice. I put in 50 to 60 hours a week, but I can make provision to be part of the kids’ ballgames.”
Shevlin remains connected with UTC’s College of Business, speaking to classes and talking regularly with Dr. Michael Long, UBS Associate Professor of Finance, and Associate Dean Dr. John Fulmer. “My education at UTC helped me to understand the decision I was making in terms of benefiting from the language of contract law and franchising and dealing with attorneys, CPAs, and various organizations in accounting and finance,” he related.
A former UTC student athlete, Mary Hughes played volleyball and received her bachelors degree in accounting in 1989, returning in 1994 to complete her MBA. She spent several years in the insurance industry with Provident, Healthsource and CIGNA and also worked with a Taco Bell franchisee in the Chattanooga area.
“I was happy working in big corporate America, but then when I was working for the Taco Bell franchisee, it opened my eyes,” she remembered. “I really enjoyed working in different areas of business because in big business you get very specialized, but with the Taco Bell owner I dabbled in marketing and management. It was enjoyable doing a lot of different things, and I saw what a franchise could offer. My husband, Hunter, said he wanted to do his own thing, and I got bitten by the bug later on.”
The quest for the appropriate franchise took Hughes to bookstores and libraries and began with a great deal of reading and research. The couple developed a list of prospective franchises which appealed to them. They decided to attend a seminar offered by Great Clips, a hair styling franchise, and observed the success which investors were enjoying in Atlanta and other large cities. They opened their first location in 1997, and since then have expanded to 10 salons in Chattanooga, Cleveland, Dalton, and Fort Oglethorpe.
“Great Clips had so many of the things we were looking for,” said Mary, “and at the time it had not come to Chattanooga yet. We talked to several franchisees and did research on the company, but we did not have a lot of capital. We went through the Small Business Administration (SBA) to help get the business started. The initial investment was in the franchise fee and cash flow support.”
The Hughes’s venture was the second Great Clips franchise in Chattanooga, and while the company does not offer specific territories its demographic research indicated that the market could support up to 25 salons. A review process and first right of refusal are utilized to provide protection for existing franchisees. Currently, most franchisees pay six percent of gross sales to the franchisor and a five percent co-op marketing fee for advertising.
Mary considers her experience with UTC’s College of Business Administration as a key element of the success she and Hunter have enjoyed with Great Clips. “When I look at where I am today, I needed everything UTC offered every step along the way to get where I am,” she stated. “The strong accounting and financial background set me up to have the jobs in which I learned so much. I analyzed companies and their financial statements, and that is one of our strengths. We are so lucky to have such a background because that is where a lot of franchisees struggle. Great Clips gives us a lot of tools for management and marketing, but you need to have financial experience so that you are able to look at profitability. That experience was gained through my education at UTC and then through the accounting positions.”
The road to success in business begins with education. Those who aspire to own their own companies will find that the College of Business Administration at UTC prepares them for the challenges ahead.