Business Franchise Idea Is Not Always A 'Snow Brainer'

Monday, November 12, 2007

Shave ice with attitude. That's the spin Conejo Valley, Calif., moms Lisa Kudirka and Karen Bain hope will hook franchise buyers on their unconventional take on selling shave ice treats.

From a glowing blue counter at their Thousand Oaks shop, bar-style beverage guns squirt chilled root beer, mango, bubble gum, green tea and other flavors atop the snow-like confections. Plasma televisions feature extreme sports bloopers. Snowboarder and surfer lingo fills the menu. High-energy music sets the mood.

The polished business is a far cry from the homespun shave-ice stands in Hawaii, where the business partners fell in love with the treat. The 18-month-old company, called Shave It Inc., also is profitable, which its owners hope will be a sweet lure.

"Because we've done so well, [franchising] for us is almost a 'snow brainer,' as we call it," said Kudirka.

If growth is your goal, turning a small business into a franchise operation has its appeal.

Before you start planning your entry into franchising, it's important to know when franchising isn't a good idea for a small-business owner: *The business is new. You may think you have a concept that's perfect for franchising, but experts recommend that you run your shop for a year or two to get an idea of whether you can turn a profit.

"You want to see whether you can iron out all the kinks and make the mistakes yourself, rather than at the expense of your franchisee partners," said Steve Feirman, a partner at Nixon Peabody and co-leader of the law firm's national franchise practice.

*The sizzle factor is missing. A unique concept is usually important for success, whether it's the product or the business model, experts say. It helps if there are barriers to entry by other companies. Consulting firm IFranchise fields 600 calls a month from potential franchisers and ends up taking as clients only about three, its CEO, Mark Siebert, said.

"We are in the frog-kissing business," said Siebert, who works with Shave It.

*The founder is key to the business' success. If your business is successful only because you work 80 hours a week or if your unique personality or skills are not transferable to potential franchisees, you may need to rethink your plans.

*The concept won't travel well. Siebert points to Cincinnati chili as a food concept that may not succeed outside its home region. Only heaven knows what Texans, for example, would make of a bowl o'red (for you non-Texans, that's a regional term of endearment for the bean-free variety of chili) served over spaghetti, which is how Cincinnatians like it.

*Profit is low. Not only does your business have to be profitable, but it also has to be so profitable that franchisees can make 15 percent to 20 percent on their investment after expenses.

*Expectations are unrealistic. It can be exciting to be contacted by potential franchisees, but that doesn't mean it's logical or practical to hand out franchises to whoever wants one.

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11 E Hillcrest Dr
Thousand Oaks, CA

Phone: 805-496-4800

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