Fast 55..

Counting on chaos

Uncertain market good for Yakety Yak

By Staff
As published in: Franchise Times - March 2008

At a glance Yakety Yak Headquarters: Newport Beach, California Units: 71 Franchise fee: $20,000 for one store; $35,000 for two; $45,000 for three. Royalty: The chain charges an administration fee along with 5 to 10 percent of the store's commissions on sales of wireless phones. Initial investment: $120,000 minimum.

The wireless phone industry is volatile, which is just how Dave Timlin wants it.

Timlin is the chief executive of Yakety Yak Wireless, a burgeoning chain of wireless phone retailers and one of the few franchises of its kind. He believes the company's unique ability to adapt to each market is a big reason for its current growth—the chain has 71 units open, double the number it had a year before.

Yakety Yak doesn't work with just a single carrier but with many different wireless providers. Each store offers services from three carriers deemed the best fit for each area—Verizon Wireless might work better in one area, for instance, but not in another. It doesn't offer all providers, Timlin said, because the company "can't be all things to all people."

Timlin says the flexibility is one of the reasons the chain is growing so fast. He also thinks it gives the company an advantage as the cell phone market changes.

Many prognosticators believe that the wireless industry is moving away from a model in which the service providers offer phones. Instead, they're moving to a model in which the customer buys a phone, and then chooses a carrier. "A lot of folks want to see this turn from a carrier-driven to a manufacturer driven market," Timlin said. "We are positioned perfectly for changes that could happen in the marketplace."

Yakety Yak first opened in Arizona in 1999, but most of its growth has come in recent years, especially since Timlin arrived at the company just more than 18 months ago. Since then the chain partnered with another franchise system, Play N' Trade, on a management company called T-Street Management.

Yakety Yak's flexible business plan could make it viable as the market changes.

T-Street is its own company and provides franchise management for both chains, and Timlin noted that it could add more chains in the coming years. The partnership enables the company to have a bigger management team to help franchisees with training, real estate and marketing. "We have a solid infrastructure now," Timlin said, adding that the company will add more staff as necessary.

Timlin said he'd like to moderate Yakety Yak's growth in coming years while focusing its expansion on rural areas. Still, the chain is targeting growth with a tiered franchise fee system that gives franchisees discounts the more stores they open. "We're not looking for somebody who wants to buy a job," Timlin said. "Multiplying yourself is where you can really prosper."

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Franchise Times - March 2008