All Kevin Pike wants for Christmas is a few thousand qualified people to buy franchises. No joke. As Asst. Vice President of Franchising for Party Land, the world's largest international retail party supply chain, he said the company's growth is mainly hampered by the lack of charismatic, upbeat and service-oriented people with enough cash to help it expand and dominate the $12 billion global industry. Still, that hasn't stopped the company from making Inc. 500's list of the fastest growing privately held Companies. The business was founded by Brian Feller and Todd Potter, the company's President and Executive Vice President, respectively, who opened its first store in Philadelphia in 1986. Several years later, people began to express interest in operating party supply stores, so the pair began to license franchises in and around the metropolitan area. By 1993, the company had 15 franchises, including one store that was operated by Ken Gross, a local real estate developer. The following year, Gross recognized the company's potential for rapid expansion, bought a third of the business and became its Vice President of Marketing and Real Estate. Within the next year, Party Land sold more than 100 franchises in 21 states and in Canada, Singapore, and Puerto Rico. It also purchased 20 of Hallmark's Parties Galore stores and changed their names to Party Land. The former Hallmark stores have contributed about 20 percent of the company's bottom line. To help separate their stores from the other party shops in the country, the team zeroed in on customer service. "When I researched the party industry, I found that there was tremendous need and a niche in the country for an organization that really pushed the service button," Pike said, adding that the stores' clientele is almost exclusively women. "Knowing the stress, anxiety and emotion that these women have coming through the front door of a party supply store, it would be a nice scenario to create a service-conscious organization that dealt with their needs. At each store, sales people greet customers as they walk through the door, engage them in conversation to find out what event they're celebrating, then take them by the hand and expose them to products that they may have never seen before. This way, a $20 sale can be easily converted into a $200 transaction," Pike said. Oddly enough, the country's high divorce rate has also been good for business since children are now having two parties for each birthday from guilt-ridden parents. Pike, adding that the franchises enjoy 98 percent repeat business. "We show them innovative and creative ways to enhance their parties and they welcome that, unlike a lot of the warehouse operations who basically hand them a bag and say ‘go look in aisle six'." The company's biggest frustration has been finding qualified franchisees. While thousands of people apply for a Party Land franchise license each year, Pike said less than 1 percent are accepted. "This is something that is making me pull my hair out daily," he said, explaining that in the late 1980's, franchisees were more mom-and-pop types who were looking to buy retail jobs. "We could have 1,500 stores right now if we just took anybody. But we've been ultra selective because we need to know they share the same philosophy about service that has made the company grow." In exchange, the company scouts store locations, negotiates leases, designs store layouts, purchases all of the store's seasonal product for the first year, provides software for inventory control, communicates with franchisees via its computer network and trains them at Party Land University where they learn every aspect of the business from products and pricing to customer service. "There's a very good team of horses pulling this wagon," Pike said, adding that the company's meticulous selection process and high level of management support helps avoid franchisee burnout. To enhance its recruitment efforts, the company is considering advertising on cable television next year and has recently joined the Franchise Brokers Network, an organization that identifies appropriate franchise candidates nationwide. Meanwhile, Pike said Party Land's owners have resisted pressure from Wall Street to go public because they don't need to raise money, nor do they want to forfeit control or be examined under a microscope. What they do want, however, can be summed up in two words: world domination. "Nobody out there is doing what we're doing today," Pike said. "This business will be here forever unless people stop getting married or stop having babies."
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