When Customers Become Franchisees

NEW YORK ( MainStreet) -- What do dog lovers, a former pro-football player and former national sales rep have in common? They all fell so much in love with a business they used that they decided to become company franchisees.

What could be considered the ultimate compliment is actually more common than one would think.

Here are five franchisees that took their love for a company to the next level by opening up their own franchise:

1. K-9 Resorts Daycare & Luxury Hotel
K-9 Resorts Daycare & Luxury Hotel was founded by two brothers in the dog-walking and pet-sitting business in New Jersey who decided to combine the operations -- then to expand a quickly successful business through the New York, New Jersey and Connecticut area.

"We always knew wanted several stores," co-owner Steven Parker says.

They decided franchising was the best way to do that and officially became a franchised operation this year.

And who better to have as their first franchisee than one of their best customers -- husband and wife Andy and Darcie Lubalin?

Parker says that he sold Andy Lubalin on the idea of franchising for K-9 Resorts after the customer came to him for advice on how to open a similar business. Parker sold the Lubalins the rights to the first K-9 Resorts franchise in March. He expects more to be sold in the next couple of months.

It was priority to make sure franchisees were as hands-on with the business -- and their four-legged customers -- as the brothers. The Lubalins, given their love for dogs, fit the profile, Parker says.

The Lubalins loved the Parkers' customer service and the high quality and cleanliness of their facility, he says.

"We have had some experiences with other kennels in the area and we've been dissatisfied for one reason or other," Lubalin says.

When looking at the company from a business perspective, Lubalin realized the Parkers were on to something.

"The pet industry is absolutely exploding, and while people are paying less for themselves and their family and their households, they seem to be paying more for their pets," Lubalin says.

In the past when pets had to be boarded, it was primarily so-called cage boarding, meaning the dogs were kept for many hours a day inside cages, he says. But kennels have been transformed into sites with rentable "rooms" and expansive runs so the pets can get exercise.

Lubalin thought becoming a franchisee was the best way to get into an expanding industry while limiting his risk. The franchise, expected to open in the spring, will be roughly 12 miles from the original one, making it less likely for overlap of customers.

2. Panera Bread
You may know him as a former wide receiver for the Carolina Panthers or as a commentator on ESPN's Sunday NFL Countdown, but former All Pro football player Keyshawn Johnson is also a businessman.

He formed First Picks Management, a business development company, in 2006 to focus on investing in franchised businesses. Johnson also owns a real estate company, Keyshawn Capitol Development.

One of his first choices to invest in was one of his favorite eateries -- Panera Bread ( PNRA). First Picks opened the first of what will soon be seven Panera Bread franchises in California in 2007.

The restaurant business is not far from Johnson's comfort zone. He had previously owned Reign, a southern-style restaurant in Beverly Hills, and Profusion in Tampa, Fla. This time Johnson wants to stick with franchised concepts, he says. (He is also a partner with a multi-unit franchisor of Cold Stone Creamery stores in Dallas.)

Stand-alone restaurants are a "little harder in terms of maintaining" compared with a proven franchise "where you have a blueprint you follow and understand," he says.

"I was looking for a concept that made sense both economically and that I liked," Johnson says. "Panera was one of those brands I would frequent quite often. It didn't even really dawn on me that it was Panera. I was just going there and eating and buying the food. As I started to get into the franchise business, this was one of the businesses that came up, and I was, like, 'Wait a minute. I know that logo.'"

"Once I started getting into the business model it just made all the sense in the world," he adds. "It's a growing business and wants to grow on the West Coast. It became the perfect opportunity for me."

Taking a lesson from his football days, Johnson says being part of a great team -- including management, restaurant staff and investors -- is imperative for a successful franchised business, he says.

"Football teaches you about preparation, teamwork and accountability," Johnson says. "Business is very much the same way. You must research, prepare, do the due diligence and be accountable for your moves. Be patient with the process."

More recently Johnson has brought on some of his NFL friends as investors in the development company, including Reggie Bush, Dennis Northcutt, Anthony Henry and Terence Newman.

Johnson hopes to keep expanding in his own territory (which allows for up to 25 restaurants) and others between California's Central Coast and Metro Los Angeles, including the area around the University of Southern California, where he went to school. He is also researching opportunities in the hospitality business.

3. Auntie Anne's
As a national sales rep for consumer brands including Dial Soap, Energizer ( ENR) batteries, Northern Tissue and Brawny, Bob Phillips traveled cross-country for years, racking up more than 1 million in American Airlines ( AA) frequent-flier miles. But no matter what airport he was in, Phillips would always seek out his favorite travel snack -- Auntie Anne's pretzels.

If you've ever had an Auntie Anne's pretzel, hot and covered with salt and melted butter, it's not hard to imagine Phillips' obsession with the treat. He once missed a flight as he waited in line for one.

In 2007, Phillips decided to turn that passion into a business and opened his franchise in a mall in Rogers, Ark.

Phillips' franchise differs than other Auntie Anne's. He owns the only Auntie Anne's/ Rocky Mountain Chocolate Factory franchise, an idea that became the solution to a potential space problem.

When researching sites for Auntie Anne's, Phillips came across availability in a mall, but the space was too big. But he'd heard that Rocky Mountain was also looking at space there. Luckily, the companies agreed to the joint space, which to customers looks like separate stores.

It's worked out well -- there are plans in the works for another dual franchised location in California -- but the arrangement presents its own challenges, Phillips acknowledges. There are separate cash register systems and requirements for preparing and selling product, and Phillips must make sure all 13 employees are trained for both.

Phillips had to figure out how to sell his products when foot traffic is light in the mall. One solution he came up with is offering promotions to employees of other stores in the mall. Each month he puts together a flier of specials and goes around to each store to drop them off.

"It lets them know we care about the other people who work for the stores," he says.

Phillips' passion for the brand and dedication to his franchise earned him an internal award as Franchisee of the Year in 2009. The company has roughly 1,100 stores.

He says he couldn't be happier that he made the switch from corporate sales to business owner.

Auntie Anne's "home office staff, support group -- everything is just top-notch and they follow through so well," he says. For now Phillips is content with his one location, but says he would be willing to look at further opportunities.

4. Buffalo Wild Wings Grill & Bar
Buffalo Wild Wings Grill & Bar franchise owner John Weiler has a bittersweet story about why he decided to open the sports-themed eatery in the Chicago market.

Weiler was no stranger to the franchise system. He was part of a group that owned six Blockbuster stores before selling them in 1998. While looking for his next franchised concept, Weiler and his wife went to visit their daughter at Miami University of Ohio. There she insisted that they eat at Buffalo Wild Wings, or B-Dubs, as it's unofficially known.

After walking into the restaurant and seeing how packed it was on a Friday night as well as how much his daughter talked up the place, he smelled a business opportunity (and probably some darn good wings). Weiler ended up speaking with the manager of the Oxford, Ohio, location for a half-hour and found out there were none in the Chicago market. When he got back to Chicago, he began the process of securing franchise rights.

"We've just been very fortunate to have a concept that people received well," he says. "Right when we set up to begin building our first store ... People were coming into the trailer asking when we were going to open."

Weiler and his team opened up the first location in April 2002. Today he has nine stores in the Chicago area and has signed a partnership to own the rights to another 10 in Maryland.

"There was a good, solid mix to the atmosphere that we had and the food. Also what we found out early is a lot of restaurants get repeat guests once a month -- we get them in a couple times a week," Weiler says.

His daughter, though, has never seen the restaurants. She was slain by a drunken driver before they opened. Now Weiler's franchises are dedicated to her.

5. Primrose Schools
Being a pharmaceutical rep, Ashley Clemens had the flexibility to help out her husband's brother and sister-in-law by picking up their son from day care. She noticed her nephew was happiest by far once he started attending Primrose Schools, a private day care facility that focuses more on being an early learning school than a babysitting facility.

"That's initially I think what really sparked our interest into looking into opening a franchise," says Clemens, who has a degree in education.

Primrose takes in children from infancy through elementary-school age for full day, summer, before and after-school care. The company has more than 231 schools in 16 states.

The difference in the format was noticeable. "When you go, someone takes you back to the classroom and introduces you. You've got the sense of security as someone checks your identification. It just feels like a home," Clemens says.

Clemens and her husband, who previously worked in custom homebuilding and land development, own two Primrose Schools in Ohio. She was so impressed with the school that she even got her husband's brother and sister-in-law to open one and an aunt and uncle to run a Primrose School franchise.

"There were a ton of franchises we could have picked," she says. "What really sets Primrose apart is just how educationally focused we really are. I wholeheartedly believe in it. You're able to see the growth, and language development is phenomenal. The kids are so engaged all day long with their teachers."

Taking a page from her sales career, Clemens says she focuses primarily on child enrollment and showing potential parents the benefits and uniqueness of the facility. Her husband mainly does the bookkeeping, but "Mr. Luke" -- as he's known to the kids -- also takes a page from his prior career by being the in-house fix-it man. Parents know the couple too.

"How many parents can say they know the owner of their child care center?" Clemens says.

Even with her education background, Clemens says she needed to learn how to run the business. The company equipped her with two weeks of training plus additional training for the teachers before the facility was opened. One of the hardest lessons was making sure state- and company-regulated teacher-to-child ratios were met.

In other businesses, "you have to make sure you're staffed for the day, but if someone calls in you just fill their spot. Here it's completely different. You really have to open your mind in dealing with those situations as they arise. Primrose does help you to prepare," Clemens says.

-- Written by Laurie Kulikowski in New York.

To follow Laurie Kulikowski on Twitter, go to: http://twitter.com/#!/LKulikowski

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