Getting in at the ground floor: being among the first franchisees in a system

With so many new franchises emerging every day, how do entrepreneurs know which will become the next McDonald's, the next Subway or even the next Dunkin’ Donuts? They reality is. They can’t. Small business prospects need to find a franchise brand, established or emerging, and have a good feeling about it deep in their soul, have the right financials in place, match up on other brand criteria, and then pull the perennial trigger to open that franchise. For those who choose an established brand, they know in some regard what they are getting into. But, for those getting in at the ground floor with an emerging franchise concept, experiencing the trials and tribulations of working toward putting that brand ‘on the map’ will be usually be unlike anything they've experienced. The rewards for having the ‘next big thing’ or hottest new concept in the market, however, can yield amazing success and can be among the best things that ever happened to you. We spoke with Barry Newburg from MOOYAH Burgers, Fries, & Shakes in Plano, TX, and John Hettenhausen from ApexNetwork Physical Therapy in Wood River, IL, who were one of the first owners to join their respective franchise systems about taking a chance on a lesser known, smaller-sized brand when the market for established, brand-recognized chains was still available. Why did you join your franchise brand? What drew you to the concept? Barry Newburg: I had a strong belief in the two founders who asked me to join them in this endeavor. I believed there was “room” for a great burger and fries in between fast food and casual dining. I was driven to enter into my first ownership situation, while being able to help establish operations/procedures/values as the first operator. John Hettenhausen: I have always had an interest in owning and running my own physical therapy clinic. Throughout my career, I have worked in a variety of rehabilitation settings and have always been drawn to the outpatient private practice sector. I had visited multiple clinics in my area and liked the feel of the Apex clinics. They were not your typical therapy setting with white walls and a sterile feel. Their clinics were upscale, warm and inviting and promote a relaxing environment. I liked the concept because it provided all the tools and resources to make it a turnkey process. They assisted with startup items like floor plan layouts and equipment selection and insurance credentialing. The input and support with documentation, scheduling and billing/collection has also been a huge benefit. What did you do before becoming a franchisee? BN: I worked for one of the two founders at Tin Star. I supported stores’ operations, ran new store openings, did the quarterly quality control visits to out of market stores, authored training materials, and ongoing food cost analysis. Prior to that, I was Training Manager for the western area (1,100 stores) for Blockbuster. JH: My background is in Occupational Therapy and spent most of my clinical time treating hand injuries and doing FCEs and ergonomic assessments. I previously worked in a hospital-based outpatient setting and then transitioned in to managing/marketing outpatient clinics. Realizing I wanted to continue down the management and ownership path, I went back to school to obtain my MBA. What was the payoff of being one of the first franchisees in the system? BN: That’s difficult to answer because there are always challenges ongoing. I’ve had some impact on the system as a whole in terms of operations. Personally, being the first just means I’ve been around the longest, and with that, comes experience. To me, experience is the very best teacher if you’re paying attention, so I’ve had the opportunity to learn from my mistakes over the past 5+ years. JH: I would say the advantage to being the first franchisee in the system would be some initial cost reductions with startup fees. I also think being the first franchisee allowed me to establish a clinic in a territory that really needed a quality provider for outpatient therapy. The area was underserved and therefore the clinic has been very successful. How do you support the growing franchise system today? BN: As the longest tenured operator, other owners in the system come to me for some guidance on occasion. The brand puts potential franchisees in touch with me knowing I’ll give them authentic highs and lows guidance in terms of how to operate a MOOYAH location, along with providing P&L expectations, staffing and labor strategies, and operations advice. JH: Today, we currently have 5 franchisees with several others in the pipeline. I think the franchisees support each other by sharing information and ideas. We have good group of owners and we all have great ideas to help improve the system. We meet with the corporate clinics, as well to continue to improve our processes and product offerings. We discuss ideas related to marketing, operations and billing/collections to name a few areas. What ideas have you presented to the brand? Which have been adopted? BN: Lots. Some. But that’s OK. Some of the very best operational practices have been the ones that replaced my ideas. I don’t care about credit; I care A LOT about MOOYAH adopting practices that WORK BEST. JH: My experience has primarily been with marketing of therapy clinics. We are always coming up with fresh ideas to share with the franchise and corporate stores. Some of the ideas that have been adopted are various promotional items to help improve brand awareness with our clients and patients. I have also brought attention to various community events or industry specific events/trade shows, which help promote awareness to specific target audiences. What trends have you seen in franchising and within your industry since being a franchisee? BN: “Better Burger” is such a crowded field and still growing. Nothing is more important in my opinion than inspired operations and store leadership. Choosing a location by marrying the brand strengths with the local demographic dynamics is critical. JH: With the direction the economy has taken in the last few years I think we are seeing more people trading in their corporate jobs for franchise opportunities. There are a lot of entrepreneurs out there looking for a good opportunity. I think you always see the restaurant franchises coming and going, but not many in healthcare. A physical therapy franchise is great for someone interested in getting in to healthcare. I think with the baby boomer population increasing in age, there will be a higher demand for quality health care providers. People also want their health care to be convenient and close-by. There was a time when people didn’t mind driving 20-30 minutes to see a physician or therapist, but now, it seems like they want access to that same quality care in their hometowns. Anything else you want to add about this topic? BN: Being first doesn’t make things any easier. Probably the opposite. I made lots of operations and store location choices that were wrong. But, since I went through those situations, new franchisees won’t have to deal with these areas because they have been better defined since store one. Being first has given me a unique perspective on the growth of a brand, like the comings and goings of people associated with the brand. These dynamics have been very interesting and educational for me. JH: If you are a physical therapist or entrepreneur wanting to expand your career or you are looking to start your own business I would give ApexNetwork Physical Therapy a call. Or, if you own your own clinic and it isn’t doing as well as you would have hoped, consider joining up with Apex. They have systems in places to assist in making a clinic successful and maintaining that success.