Many motivators drive franchisees, like staying sharp
Ask a person why he or she is franchising in the first place, and the same answers pop up again and again: It’s a way to make money, expand an existing portfolio or satisfy a passion. To remain active mentally and physically isn’t usually in the mix.
But retirees Bruce and Lynne Dore, who are 60 years old, says it’s why they’re operating two Hand & Stone Massage and Facial Spas and trying to figure out if (and where) they can open a third.
The Dores are scarcely newcomers to franchising. Years ago the couple joined a group of equity investors to create Sunshine Fitness, an early Planet Fitness franchisee that since 2003 has grown to 23 units in central Florida and Georgia. The group has plans to open four or five of the value-oriented fitness centers in 2016.
Bruce’s younger brother Eric co-manages the operation with Shane McGuinness. Another Dore brother, a Florida physician, is a partner, as is a Subway franchisee and an owner of a construction business. Bruce Dores, who has an MBA and spent 30 years at Merck, the pharmaceutical giant, lends his marketing expertise.
The Dores figured Hand & Stone was a good fit because, like Planet Fitness, it offers a month-to-month membership option. Dores insists that forces franchisees to emphasize customer service or risk losing business.
That could be a problem. Although the health-and-wellness industry in the U.S. will ring up about $16 billion this year, its compound annual growth rate since 2010 is a modest 2.7 percent, says IBISWorld.
The couple self-funded both units. Hand & Stone’s website notes the initial investment ranges from $406,921 to $521,692.
The Dores opened the second one in July, in Flourtown, Pennsylvania, a Philly suburb with a hefty median household income of $100,275. The first unit opened two years ago in nearby Huntingdon.
There’s the real estate rub. The Dores want to open a third nearby but can’t because the territory is licensed. The Dores were nonetheless eager in August for the imminent opening of a Movie Tavern. They believe the upscale theater with reclining seats, full meals and adult beverages will expose the Flourtown unit to the most sought-after of spa-demo: women.
Speaking of women, Heather Sakrit and her partner, Annapolis-based businessman Dave Donahower, have the female gender covered. The pair own four Sola Salons in and around Palm Springs County, in south Florida.
Sola is a 240-unit suites concept whose franchisees lease (on average) 6,000 square-foot buildings and, in turn, rent the space to hairdressers, massage therapists, nail techs, skincare professionals and makeup artists.
Sakrit, the operating partner, oversees day-to-day management and scouts for new sites. The two have signed for six more Sola Salons in South Florida. So far, they’ve used the franchisor-recommended general contractor to convert buildings into salon-ready spaces. “We found they were no more expensive than the other local contractors. No need to reinvent the wheel using a local builder,” she explains.
To be successful, franchisees must attract experienced stylists with followings to take the plunge of business ownership. “We help them become independent business owners,” Sakrit claims.
That’s crucial because the $20-billion salon industry is highly competitive. Today, there are some 82,000 salons vying for business, reports the Bureau of Labor Statistics (BLS). As hair coloring, hair straightening and other advanced hair treatments increase in popularity, the need for cosmetologists will spurt 13 percent from now to 2022, BLS predicts.
That number should keep Sola’s suites full. But South Florida’s pricey leases—which can cost upwards of $60 per square foot minus CAM fees—could put a kink Sakrit’s plans. “This is a highly competitive market for real estate because we have been recovering quickly,” says Sakrit, a licensed real estate broker herself.
In turn, the rent she charges stylists is comparatively high. A one-chair studio runs $250 a week; larger spaces cost upwards of $295.
The partners have invested about $500,000 per salon, though Sakrit acknowledges some franchisees may spend less.
Bo’s to Cole’s
In a column devoted to franchisees (like this one), voices of franchisors are rarely heard. Yet upon learning CEO Tom Sacco of Homestyle Dining changed the name of his latest franchise concept from Bo’s Steakhouse & Grill to Cole’s Backyard Grill, I got curious.
Sacco explained Bo’s name was troubling customers at the first and (so far) only company unit, in Lindale, Texas. They expected a full-service restaurant. Bo’s is fast-casual. “‘Steakhouse’ and ‘grill’ were confusing people,” he said.
Meanwhile Homestyle Dining had applied for three Bo’s trademarks. That’s when Sacco heard from a Bojangles lawyer, Jayne Hunter, who filed a notice of opposition on the grounds of “priority and likelihood of confusion” and “dilution.”
Bojangles, however, didn’t use the word “Bo’s” or “Bo” commercially, Homestyle Dining General Counsel Jason Head told me. But because Bo’s was already confusing to customers, the Homestyle Dining folks decided not to contest the claim. The summary: “So rather than investing our resources into legal action, we opted to change the entire name to Cole’s Backyard Grill.”
David Farkas has covered the restaurant industry for 25 years as a reporter and food writer. Submit your company’s development agreements to him at email@example.com.