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Miss Universe

A Beauty-filled Franchise


YES, Miss USA really is a franchise—as is Miss Universe and Miss Teen USA. (Miss America’s a nonprofit, in case you’re wondering.) Donald Trump—a man who needs no introduction—didn’t invent beauty pageants, but he was the first to franchise them.

Miss USA just turned 60 years old—the pageant, not Alyssa Campanella, the Miss California USA who was crowned in June at Las Vegas’ Planet Hollywood.

When Donald Trump and CBS went into the pageant business as a joint venture back in the late 1990s, they moved the company from Los Angeles to New York City. In California, pageant directors were licensees, but the New York Franchise Law considered the pageant a franchise.

Miss California, Alyssa Campanella

Trump’s office called NYC attorney David Kaufmann, who wrote NY’s franchise law, and asked him to meet with the organization’s board of directors. When Kaufmann was ushered into the board room, after cooling his heels (but not his blood pressure) in a waiting room with “pictures of gorgeous women all over,” he says he was greeted by two men: Trump and the head of CBS at the time, Les Moonves.

“I’ve been set up,” he remembers saying. “You’re the board?” The meeting lasted 15 minutes. Kaufmann sent a client list as follow-up and the job was his. Along with the benefit of having the Miss Universe Organization as a client, Kaufmann says, grinning, it also gives him license to claim: “We’re the best franchise firm in the Universe.”

The pageant has turned out to be as good an investment as Trump imagined. “I could see it had great potential, but had not been handled well, or produced at a sophisticated level which the audience would expect,” Trump said via an e-mail (alas, not a phone call.) “We were No. 1 in the ratings, and the future seems bright.”

Getting to that bright future required revamping the license agreement to a franchise agreement. One of the first changes was switching from a short-form agreement, which Kaufmann calls “dangerous,” to a longer, more detailed document that spelled everything out. Not only is protecting the brand important, Kaufmann points out, but  in this case also the high-profile ownership team. NBC/Universal is the current media joint-venture partner with Trump. When you have 50-plus beautiful women walking around in Kandy Wrapper swimsuits and high heels, one can never have too many standards of good faith and fair dealings. And don’t forget, some of the contestants for Miss Teen USA are as young as 14.

Operations manuals needed to be crafted—three versions were required for the three pageants. In addition, a compliance program was put into effect where pageant directors submit names and contact information for every girl who entered the state pageants to be surveyed afterward. Not every contestant is called, but it takes Kaufmann’s paralegals a month to make the calls, mostly because they have to be done at night to accommodate the West Coast students who can’t be contacted during normal East Coast working hours. “99.9 percent of the time the girls have a great experience,” he adds, but in addition to sometimes hundreds of disappointed runner-ups, there are also the mothers and fathers of those uncrowned beauty queens to contend with.

Commentator Kelly Osbourne

Lil Jon with Vegas Showgirl Holly Madison

Pat Smith, a former state winner

British Singer Tinie Tempah

Tyson Chandler, Dallas Mavericks

Host Giuliana Rancic, E! News

Pageant Directors John and Jason Vannatta.

Randy Sanders with three of his Miss Teen USA state winners.

Emma Baker, a former Miss  Teen, interviews the Virginia director.

Sharon Soltero, right, of Infinity Franchise Capital and daughter Amanda.

Last year’s three winners spoke at the Miss Teen USA reception.

Paula Miles, state director for three pageants, wants the young women to enter for the right reasons. What’s the wrong reason? “Mama wants
me to.” 

Franchises in general contain a multitude of moving parts, but no one can deny this is a complex franchise. The end result—of which the organization leaves in the hands of celebrity judges—is literally the face of the brand for an entire year. And while no franchisor likes surprises, for the Miss Universe Organization, “surprises are the norm,” according to Paula Shugart, president.

One such surprise that resulted in new contract language being drafted occurred a number of years ago when rumors circulated a contestant in the Miss Universe Pageant was a cross-dresser. It turned out not to be true, Kaufmann says, but just the same, the pageant requirement of “female” was changed to “naturally born female citizen of the state” or country.

Show business like no other business

The one advantage this franchise has over more traditional ones is there’s little to no claims of encroachment. “You can’t steal contestants from each other,” says Randy Sanders, who runs five states pageants, because to enter the pageant you have to live or go to school in the state you represent. Sanders started with the New York pageant, but when his home state of Pennsylvania became available in 1996—a rarity—he gave up New York for Pennsylvania, adding Connecticut, Vermont, West Virginia and Indiana later. He learned the business, and it is a business, as director of operations for a licensee, before venturing out on his own.

His contestants pay about $1,195 to enter the pageant. All are encouraged to find local businesses to sponsor them to help pay the costs of competing. Dresses alone can cost up to $30,000 (at least that’s what Miss Nebraska USA’s dress cost this year). For the fee, the young women receive training, coaching and a chance to represent their state in the Miss USA pageant—and if successful there, a shot at the Miss Universe crown.  Runners-up are in line for the crown, should the winner default.

One thing that’s left up to the individual state pageants is whether the contestants represent municipalities or just sport a number on their sash. Sanders believes in giving them a number to simplify things. Plus some towns have names that don’t pair well with “Miss” —the most obvious example being Intercourse, Pennsylvania.

Franchisee John Vannatta, on the other hand, believes representing a community aids the women when they hit up local businesses to be sponsors.

Each pageant also has the leeway to bring in their own judges, venue, entertainers and staging.

Here’s just a taste of what the women and teens who enter the Miss North and South Carolina and Louisiana pageants are trained in: how to pack a suitcase; etiquette, including the proper way to eat; dress for success tips, including your colors; make-up and skin care; diet and nutrition; interview skills and how to walk a runway; poise under fire; media training; photo-shoot techniques; and how to maintain your own social media sites, according to Paula Miles, the director of those pageants. In addition, the directors help secure sponsorships for necessities such as earrings and shoes, not to mention those all-important evening gowns.

While Miss America winners receive college scholarships, most Miss USA winners are looking to become models, spokeswomen or actors, so their scholarships are to the NY Film Academy, Shugart says. Prize packages for the winners are often donated, but some of it comes straight out of the franchisee’s bottom line.

Being a state director is a labor of love, not a get-rich guarantee, says Vannatta, who runs five pageants in the Midwest. He’s from Texas, where pageants are big. When he and his brother, Jason, attended the University of Kansas, they attended the local pageant and met the director who asked them if they’d like to recruit contestants for him. Vannatta also ended up writing the television script for the next pageant. In a fortuitous break, the two were asked to take over the Kansas pageant—even though the waiting list to become franchisees is “a mile long,” Vannatta says. The trend is for existing directors to take over additional pageants if someone retires or quits, rather than bringing in new people.

It’s a year-round job, and during pageant season, the events are back-to-back. It’s not about the money for Vannatta: “I love helping change people’s lives.” And he’s no short-timer. He and Jason have been franchisees for 20 years. Jason does the graphic design work and their sister, a former beauty queen for the competition helps with beauty tips and training.

“It’s a business you can make a living from,” Randy Sanders says. “There are good years where I made a nice income and years I lost. You feel like a genius when you’re up, and a dope when you’re not.”

Having more than one state helps, he adds, because when Pennsylvania’s economy was hit hard in years past, West Virginia was up. States like California and New York have no shortage of entry-fee-paying contestants. Kevin Lewis, the franchisee (or licensee as the pageant officials call them) for New York and California, says those two states were easy for him to recruit girls who wanted to compete, because as a talent agent his “Rolodex was California and New York.” His new territory, New Hampshire, may be a bit more challenging. After all, he points out, their state motto is “Live Free or Die,” and individualism is a state attribute.

Before running pageants, Lewis was often a judge. “Judging was fun,” he admits. “Being a director is work.” His job as a judge, he says, is to “find the steak, because we can manufacture the sizzle.”
Ironically, not even the judges know who the winner is until her name is called out on stage.

“When the winner wins, you show no emotion,” says Jeff Cohen, who represents models and who has judged an impressive number of state pageants. “Your pick may not be the one who won ... but usually (out of) the top five you’re fine with any of them.”

What he looks for is confidence without arrogance. The young women have to be beautiful, but can they compete against 49 others who may be equally as fetching? State judges also look for someone who can go on to be Miss USA and Miss Universe, Cohen says.

“It’s not about the best girl winning,” says Vannatta. “In a pageant, there’s no ‘best’ girl.” It all depends on the judges’ personal taste and how they relate to each girl’s looks, poise and answers to a spontaneous question on stage. And while there’s  no such thing as a stupid question, apparently that doesn’t apply to answers.

The sport of femininity

In case you get the two pageants confused—as did almost everyone we mentioned the franchise to—the difference between Miss USA and Miss America, according to state director Sanders is: “Miss America is the girl next door; Miss USA is the girl you wished lived next door.”

He’s famous in pageant circles for that line, Miles says, laughing.

Trump bought the pageant at a time when Miss America was “the pageant.” “Talk about business savvy,” Kaufmann says. Where’s Miss America today? Not airing on broadcast TV.

Miss USA is sexier than Miss America, even though both women most likely could pass for sisters. The Miss USA pageant has been criticized in years past for lingerie shoots and skimpy swimsuits. But in reality, the event was born when swimsuit manufacturer Catalina started its own pageant after the reigning Miss America refused to pose in its swimwear, according to the Miss Universe website. And then there are the winners’ public gaffes, such as topless photos, too much partying or stating you could never support gay marriage, some of which results in a beauty losing her crown.

Controversy, while frowned upon, does help the TV ratings at a time when seeing a girl in a bikini isn’t as rare as it used to be on the small screen.

But the Miss Universe pageant is one of the most popular shows broadcast live in the world.

Franchisee association

Three of the franchisees we spoke with were on the advisory committee, and Vannatta says he appreciates the fact that they’re listened to.

Never was being heard more critical than when owners wanted to get rid of the Miss Teen USA pageant altogether, once its declining ratings made it not worth the expense of televising it. The Miss Teen USA pageants are the franchise’s “bread-and-butter,” according to Vannatta. They are akin to what the minor league is to major league baseball, he says.

“She’s (Shugart) is the reason the Miss Teen program is still around,” Vannatta says. “She put together a deal to keep the pageant. She put her neck on the line for us.” Unlike in the past, Shugart has given the directors the respect they believe they deserve, Vannatta says. “At one time we were thought of as fans, rather than (business owners). Now our opinions are sought out.”

One change the directors would like to see happen, however, is longer contracts. Currently, the contracts are renewed every year, which makes it difficult to negotiate long-term deals on the venues, etc, that would save money.

The night of the actual pageant, the directors are part of the audience. They have no special role. But all are rooting for their Miss to come home with the crown. There’s a sense of pride in bringing the winner to the party. Everyone wants the bride, not the bridesmaid.  Although a runner-up is no chopped liver.

When this year’s pageant is over, directors go home to run a boot camp for the teens, and only the pageant director of Miss USA has a plane ticket to Brazil for the Miss Universe pageant.

All this hard work is for the young women who hopefully leave the pageant experience a better, more confident person than when they came. “This is their shot,” Jason Vannatta says. “We’ll be back next year.”


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