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Parable Group tells growth story



At a glance

Headquarters: San Luis Obispo, California

Units: 65

Franchise fee: $10,000 to convert an existing Christian bookstore or $25,000 to build a new one.

Royalty: 2 percent

Ad fund: 1 percent

Initial investment: $250,000 to $750,000

For years, the Parable Group helped Christian bookstores grow. Now, thanks to franchising, it's the one growing.

Parable was —and still is—a marketing company, which evolved from the efforts of Steve Potratz, a former music industry executive. He bought a Christian bookstore in 1985 on a whim while looking for a better lifestyle for his family. He changed the store's name to Parable—after the Biblical tales of Jesus—and beefed up its marketing efforts with flyers and mailings.

After witnessing his success, other store owners asked Potratz for help with marketing. He formed the Parable Group, a cooperative of sorts, and by the mid-1990s some 375 companies were part of his marketing group. As sales increased significantly, some of the stores became targets for buyouts by Christian book chains, including Family Christian Stores and Lifeway Christian Stores. "A lot of their most successful stores were previously associated with Parable," said Rod Huff, Parable's vice president of franchising.


Once a marketing co-op, Parable has become a fast-growing franchisor.

That drained stores from the Parable Group. Ultimately, it was decided the best marketing would be through a nationwide brand. In 2004, the marketing company became a franchisor. "It was a natural outgrowth of this group of stores that got together for marketing purposes," Huff said. "If they would share a common name and a national brand, it would give them as independent Christian retailers the opportunity to compete with the two major chains in the market."

Parable currently has 65 units, 62 of which had been among the 200 bookstores in the marketing group. The chain is expecting more growth. It recently bought a competing, 31-unit franchise Christian bookstore chain, Lemstone. It also created a new prototype to open new stores. The company plans to open 10 to 12 such stores this year.

The Lemstone acquisition will also help the company boost franchise support, Huff said. Parable is good at marketing, but Lemstone is good at getting units running. "They have always been weak in marketing but strong in operating stores," Huff said. "They can get them up and running from scratch. We have little experience in that."

Still, it's a big change to go from a marketing co-op to a nationwide franchisor, and Parable is still working on that switch. The company has to reposition itself not just with its employees and customers, but also with its suppliers. "We've been working on this ever since we became a franchise," Huff said. "It isn't like a switch you can turn." 

Once a marketing co-op, Parable has become a fast-growing franchisor.

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