Monthly Archives: April 2014

Just One Franchise: BullChicks

bullchicks-logoMost quick service restaurant franchises use a small menu that reduces the amount and variety of food they need to stock and allows for standardization in food prep. BullChicks, on the other hand, has developed a completely customizable menu of 20 burgers, 20 wraps, and 20 salads as well as sandwiches and wings. Their mix-and-match strategy gives a sense of flexibility and freshness without giving up the practicality of a streamlined menu.

Founded as a family business in Corpus Christi, BullChicks centers around repeat customers who love what BullChicks offers as well as the affordable prices. BullChicks has a fun and friendly atmosphere perfect for a community hang out for families and singles alike. Customers can write messages on the wall to leave their mark and stake their claim at their favorite BullChicks location.

Their trademark wing-eating contest adds excitement to the franchise when patrons try to conquer their hottest wings for a spot on the interactive wall of fame, a gift card to bring them back for another meal, and a T-shirt which acts as further promotion for the franchise. This fun and creative promotion is typical of the BullChicks approach to marketing. They have an up-to-date website listing franchisees’ locations with a web page for each.

When you can please lots of different appetites, BullChicks figures, you can cater to large groups and different kinds of people. From students on a budget to the hard-hat crew to the suits and ties, BullChicks serves many different kinds of people. BullChicks won’t tell you the secret ingredient that makes their food so delicious until you become a franchisee. They will say, however, that they use fresh ingredients and a friendly atmosphere to make their restaurant addictive.

BullChicks is looking for franchisees who are passionate about running a business and catering to repeat customers. Franchisees don’t have to work in the restaurant full time, but are expected to participate in operations. Franchise locations are going like hotcakes in the BullChicks franchise system, including Master Franchise locations for enterprise growth. Master franchisees open their own primary location and then bring other franchisees into the system. They also train and manage these franchisees under the guidance of the BullChick franchisor team.

Franchisees are required to have a minimum of $75,000 in cash for a single unit and the franchise fee for an individual unit is $39,000. A single unit total investment ranges between $126,500 and $244,500. Master franchise unit costs vary depending on whether you want to build out a pilot location or if you only want to sign on and manage other franchisees. Opening a pilot franchise significantly increases the total investment amount, but that cost is split 50/50 with the franchisor. Compared to other franchises that don’t give any assistance to Master Franchisees, that split can be a huge advantage.

You don’t need experience in the restaurant business to own a BullChicks franchise, either. They’re looking primarily for future franchisees that are excited, energetic, and capable of learning the BullChicks franchise model.

Franchise Business’s Profit and Loss

profit-and-lossWhen you’re searching for the right franchise, you’ll have lots of documents to read, plenty of people to talk to, and advice from all sides. One piece of the puzzle that many future franchisees overlook is the business profit and loss statement (P&L) from your potential franchisor. A P&L lists the income, costs, and resulting profit or loss of a company, usually over a period of a quarter or year.

Many companies are required by law to prepare and file these statements, and it’s worth asking to see one even if the franchise you’re considering is not required to make theirs public. You might also ask to see a P&L when you speak to current franchisees. If you can get a business profit and loss statement from a franchise, it can give you big insights into how the business is run and what kind of profits you might be able to expect.

Before you look at profits, take a close look at the expenses that a franchise might have. Depending on the franchise, expenses can vary significantly through the life of the franchise as well as seasonally. Be sure to look at expenses across a number of months, if you’re able, and look at expenses that reoccur.

Mandatory expenses, like franchise fees, royalties, and loan payments, probably won’t vary a whole lot between your future franchise and an existing franchise. Ask the franchisees how they feel about these expenses. Do they get their money’s worth? Other expenses that are mandatory but might not catch your attention include purchases which must be made through designated suppliers. Does the franchisee feel that the product they’re getting is worth the cost?

When mandatory expenses cut into profits significantly, it can make other choices more difficult and give franchisees less flexibility in other costs, such as staffing or professional education. On the other hand, those mandatory expenses can sometimes be key to overall profitability. Plenty of small businesses do without marketing, for example, and that’s rarely a good business decision. However, franchisees can usually tell you what they would do if they had more flexibility and knowing how they would spend extra funds can tell you a lot about what they think the franchise is lacking.

Once you’ve taken a good look at expenses, look at profits. What aspects of the business bring in the most revenue? Franchisees might have struggled to make these areas as profitable as possible, so ask questions about how they go there and what would happen if that profit started to dry up. Knowing the history of profits can also help you gauge the ability of a franchise to adapt to change.

Business profit and loss statements aren’t always easy to come by, but the more relationships you build with existing franchises, the more information you might be able to acquire.

Just One Franchise: Rytech

water_by_trixie_bellThey say April showers bring May flowers but spring showers can also bring water damage and headaches for homeowners and insurance companies. Water damage was the second most popular insurance claim between 2004 and 2008. Homeowners are seven times more likely to experience water damage than fire damage and six times more likely to experience water damage than a burglary. The most common sources of water damage are internal — things like leaking pipes or broken appliances. External sources include roof damage, flooding, sewage backups, and natural disasters. Regardless of how it happens, water damage can be very costly and insurance companies don’t like to pay for it. Partly this is because of the extensive repairs that are required after water damage, but it’s also the low success rate of repairs.

Rytech  is one water damage specialist franchise that is changing the way insurance companies deal with water damage claims and making repairs more successful. They focus on three areas:

  • restoration
  • mitigation
  • remediation

They move as quickly as possible to reduce the amount of damage and get customers’ lives back to normal.

Rytech has built their reputation on getting it done right the first time because they use the newest technology and techniques to repair water damage and to prevent future issues form occurring. Insurance companies work with Rytech franchises to resolve water damage claims and fix issues so they don’t turn into bigger problems later. Since mold goes hand in hand with water damage, Rytech franchises also provide mold removal services that focus on getting to the root of the problem. An ounce of prevention is worth a pound of treatment when it comes to mold and Rytech focuses on this idea in their work.

Franchisees benefit from Rytech’s relationships with insurance companies — and when it comes to water damage, insurance companies largely have control of the market. When insurance companies are pleased with the work franchisees do on claims, they direct their clients to those successful companies. As a result, Rytech franchisees can receive most of their customers through insurance claims and adjusters. New startups without contacts in the insurance industry can find it very difficult to break into the market. With Rytech, franchisees have their foot in the door for business with insurance companies and have a path towards success.

Industries such as this with high barriers to entry are among the safest from future competition. With Rytech’s name recognition and connections, franchisees are in a stronger position. Rytech also provides training and technology.

On top of a business model that lends itself to success in an otherwise difficult to enter market, franchisees have large exclusive territories that allow them to build up their reputations as leaders in water damage and mold repair services. Franchisees are committed full-time to their business and can expect to invest $128,000. Rytech requires $50,000 minimum cash and a franchisee net worth of $300,000, so this business is often a great choice for those with previous business experience who are looking to grow their potential and run their own business.

Do You Want to Be a Ground-floor Franchisee?

New-franchisesShould you franchise with an established brand or a newcomer? If you’ve found the perfect franchise business opportunity, you may not care whether it has been around for two years or for a century; if you’re still scouting around, this might be a factor that helps you decide.

Established franchises that have been in business for years have strong advantages that many future franchisees are looking for in a franchise business. Many well-established franchises have brands with strong name recognition and fan followings that let your new location start strong. On top of having a valuable brand, the franchisors are typically knowledgeable because they’ve been in business for a long time and have a system that works for training and supporting franchisees. The experience can really pay off if you’re an inexperienced business owner looking for a system to follow.

There is a certain amount of security and stability in an established franchise. The franchisors have had time to sort out some of the bumps in the franchise system and that might give you confidence in the franchise system. An established franchisor may also have more of a financial track record and more franchisees for you to talk with.

That being said, not every established franchise has these advantages. Some franchises that have been in business for years don’t have strong franchise systems. Their brands might also not be very well known in your area. Franchisors might even be new to the franchise if the original franchisor merged or sold to another company. An established franchise doesn’t always mean a successful one.

Newcomer franchises can often be just as profitable for their franchisees as established franchises. The experience the franchisors bring, the energy they have, or the ability for the franchise to disrupt the existing market or fill a void can create advantages for an upstart company. Franchisees often get more one-on-one individualized support from new franchises because they have the time to focus their attention more on individual franchisees. Newcomers may have the advantage of being able to reimagine business and change the way things are done more nimbly than venerable businesses.

And let’s face it, getting in on the ground floor can be exciting. The opportunity to work closely with the new franchisor while building something new can be uniquely satisfying. You may have more input than a franchisee with an older company would have, and you’ll certainly be around for more of the thrilling milestones as the company grows.

But newcomers must go through the process of fine-tuning that experienced franchisors have already been through. If you’re not willing to go through that process, a new franchise might not be right for you. There might be more risks with a new franchise business than established franchises because the franchise is untested but the opportunity to get on the ground floor and be a leader in a franchise might be worth it to you.

Take a look at your personal preferences and what kinds of risks you’re willing to take and what kind of relationship you’re looking for with your franchisor. Determining these traits in yourself might be the key to the decision.

Our New Franchise Opportunities section includes some franchises that are just new to America’s Best Franchises, but it also has some new and noteworthy franchise business opportunities. Check it often!