Security

Originally printed in Area Developer Magazines Issue II 2008, the 2008 Top 100 Power Zees examines the top 100 most successful franchisees by the number of units they operate.

Originally printed in Area Developer Issue I 2008, the 2008 Mega 99 rankings highlight the Top 99 Multi-Unit Operates broken down by brands operated and by industry.

Reduce employee theft and boost your bottom line

After my workshop on loss prevention and security at Franchise Update's Multiunit Franchising conference this past April in Scottsdale, attendees made their desire clear for more information on the topic--and for specific tactics they could employ to improve profitability. After all, every dollar not lost to employee or customer theft (or some other form of controllable loss), falls directly to the bottom line.

Studies show annual losses from employee theft in the retail sector cost owners between $20 billion and $40 billion annually, a figure that continues to rise each year--and that as many as 30 percent of the businesses that fail in a given year are harmed by losses caused by crime from employees or outsiders...

When we visited with Hank Huth last year, the franchising veteran was keeping busy overseeing his 23 Blockbuster Video locations and 7 Palm Beach Tan units. He had an eye on expanding his Palm Beach Tan portfolio and he did just that in 2007, adding 3 more and winning the company's 2007 Developer of the Year Award. But that's not all he's been busy developing.

But first, a quick look back at how Huth got to where he is today.

The one-time banker took "a leap of faith" in the 1980s as a result of a chance meeting with some executives at Blockbuster Video. Huth didn't have any franchising experience, but his friend (and soon to be partner) Tim Nolan did. The two teamed up and it turned out to be a perfect match, as the two have gone on to develop five different franchise concepts over the past two decades...

Linda Fong moves ahead in her own special way

With her high energy and positive attitude, it's no surprise that Linda Fong is a successful multi-brand, multiunit franchisee. However, like many franchisees, she's not one of those who made a plan and followed a straight line to that success. But it's the detours and her individualism that have taught her what she needed.

"I remember getting a review from one of my bosses, and they indicated 'Linda is a valuable asset, but needs to mature a bit more to...' I think I was all of 22, and I didn't pay attention to the first part of the sentence because I was so insulted with the latter part. What do they mean I need to mature? I know of what he spoke now," she says.

Her meandering route, which took place in and around the San Francisco Bay Area, included working for PG&E (a large California utility company) for several years before joining her husband at his salon, kenz!, in Alameda...

It's fitting that Guillermo Perales does business in the state of Texas--a place where things are known for being large. Fitting because Perales heads the largest Hispanic-operated multiunit franchise company in the U.S., with more than 140 units across five brands. And he's looking to expand.

Perales is a true immigrant success story. He was born and raised in Mexico where he attended university before graduating (with honors) and finding his future across the border. His academic work behind him, Perales began his professional career with a Mexican company (Grupa) that had businesses in the U.S. "I saw the opportunity to come to the states and perhaps, start my own business," says Perales.

He gained a lot of business experience with the company throughout the 1980s...

12 years in franchising and shooting for $80 million in revenue

Five careers. That's how 65-year-old Charles Smithgall, III, categorizes his business life. And that's not even including his service in the military. Or rustling cattle on Canadian ranches as a young man in the late 1960s.

Things have settled down somewhat today. Smithgall is chair and CEO of SEI/Aaron's, the largest Aaron's Sales multiunit franchisee, with 61 stores in seven states and annual revenue topping $68 million. And he's only been in franchising for 12 years.

Before his life in franchising began, Smithgall worked in the construction business in his hometown of Atlanta. He also spent a few years in the media industry (his dad had been a media pioneer), ultimately overseeing cable TV and radio companies...

Most people would trade their day job anytime for Bob Stucker's problem a few years back: "I retired too young."

In the mid-1970s, when Stucker was 18, he joined the family business, Barjan Products, LLC, which sold general merchandise to the travel industry - over 7,000 items from sunglasses and toys to lights, lenses, and fuel additives at truck and rest stops along the nation's highways. "Everything but food and tobacco," he says.

Eventually, after learning the ropes, Stucker took over the business from his father, who had founded the company. After about 20 years at the firm, Stucker sold it and retired. He moved from Illinois to Florida, bought a boat, traveled around the world on it, and fished every day. That lasted about six years...

My first entry into the franchise business was in 1986 when I acquired 24 Dairy Queen restaurants in Texas. In less than a year, I was up to 55 stores and had become one of the largest franchisees in the entire Dairy Queen system. I had more credit than sense.

Over the years, I built a company with over 80 multiple-branded restaurants, including hamburgers, ice cream, chicken, pizza, and full-service restaurants. Many lessons were learned through the good and bad times over the last 20 years, and don't I wish I knew then what I know now? I would have grown a lot smarter had I spent quality time with experienced multiunit operators and franchise industry leaders in those early years.

As a multiunit operator your success depends upon many factors, most of which you control, but sometimes you can be in the wrong place at the wrong time...

Subway continues to sizzle as one of the hottest franchises going. For the 15th time in the last 20 years, Entrepreneur magazine's annual Franchise 500 rankings have listed Subway as the number-one franchise opportunity. For perspective, when the chain was first named to the list in 1988, it had about 4,000 locations. Today, the chain operates 27,732 shops in 86 countries (as of June 2007).

Multi-unit operators are a big part of that expansion strategy. "We have encouraged multi-unit ownership since our early days of franchising because we understood that a solid group of experienced franchisees could help build the business quickly and efficiently," says Subway's Don Fertman, director of franchise sales.

"The advantages of the multi-unit approach are that experienced franchisees can open restaurants faster, they tend to be better operators, they have higher average unit volumes, and they can build an infrastructure to help decrease employee turnover," he says...

Originally published in Area Developer Issue III, 2007, The AD 50 highlights the largest multi-unit franchise companies who support multi-unit franchising.

Originally printed in Area Developer Issue I 2007, the 2007 Mega 99 rankings highlight the Top 99 Multi-Unit Operates broken down by brands operated and by industry.