Growing Lowcountry franchises
With 2,500 options to choose from, many seek chance to be boss
By Warren Wise. November 21, 2011
Bates Kennedy once went door to door from Virginia to Alabama to sell spare parts to textile mills.
Bates Kennedy owns the Batteries Plus franchise in West Ashley that now offers thousands of light bulbs in addition to batteries.
Anthony Brown, owner of 360 Clean, unlocks a door for his employees to enter and clean a business.
But when many of the looms quit spinning out yarn and the industry moved overseas around the turn of the century, the Greenville-based father of then-newborn twins decided it was time to look elsewhere for a stable job.
"When your top two or three customers go bankrupt, it's time to find something else," Kennedy said.
In North Charleston, Anthony Brown wanted a job he could rely on as well.
He worked at armored vehicle-maker Force Protection in Ladson as an equipment trainer but witnessed a cycle of layoffs during his five-year tenure.
"I started to wonder if I might be next," Brown said.
Separately, the two left their jobs and found a living in the world of franchises.
Kennedy decided on Batteries Plus. Brown selected 360 Clean, a Charleston-based janitorial service.
They are among the owners of two of the more than 2,500 different, active franchise options in the United States.
Altogether, there are about 785,000 franchised businesses across the nation, according to Alisa Harrison, spokeswoman for the Washington, D.C.-based International Franchise Association. That's about 2.5 percent more than in 2010, but still shy of the roughly 792,000 in 2008, when financial markets collapsed in the fall and funding for start-up businesses all but disappeared.
By far, quick-service restaurants account for the highest number of franchised establishments at about 153,000, with personal services trailing at about 131,000. Franchises provide 7.8 million direct jobs and pump about $740 billion into the economy.
The final numbers for 2011 could be tweaked downward when the 2012 forecast is released in mid-December, but Harrison expects the year will end with positive growth in the number of franchised operations, jobs and economic output.
"Franchised businesses tend to do quite well during a recession," she said.
When people lose their jobs or are uncertain about holding onto their jobs, they look elsewhere, Harrison said.
They tap home equity, severance packages and sometimes retirement plans to start a new business that they can own so they can have some control over their future, she added.
"It's a great option to have," she said. "And people take advantage of it."
Kennedy and Brown did exactly that.
Kennedy started looking at restaurant and bar franchises, but they didn't interest him. He also researched children-oriented businesses and other ideas, but nothing seemed to pique his interest.
Then he came across Wisconsin-based Batteries Plus. He liked the idea since everybody needs batteries. Half of the business dealt with commercial contracts, which he was familiar with from his previous job, and the other half was retail, where he had little experience.
The International Franchise Association estimates there are 785,000 U.S. franchise businesses that employ 7.8 million workers and have an economic impact of $740 billion. Here are the largest industries in the sector:
Business | No. of establishments
Quick-service restaurants | 152,665
Personal services | 130,895
Retail products/services | 99,592
Business services | 92,714
Real estate | 86,825
Commercial/residential services | 70,129
Retail food | 60,841
Restaurants | 33,471
Automotive | 31,659
Lodging | 26,011
Some of the franchises looking to expand in the Charleston market include BurgerFi, a South Florida-based burger chain, and Lawn Doctor, a New Jersey-based yard-care business.
Henry Harris of the Isle of Palms, co-partner in Charlotte-based H&B Hospitality Inc., which owns the BurgerFi franchise for the Carolinas, hopes to open the first two restaurants in Raleigh and Cary, N.C., by the spring. He also is actively looking in Charleston to open a location perhaps by the end of next year.
"I would love to be downtown," said Harris, who has been in the restaurant business for 35 years and is a former franchisee of Outback Steakhouse. "That's my first preference. I see the area able to handle two to four restaurants."
As for Lawn Doctor, it already has a presence in the Charleston area and elsewhere in South Carolina, but vice president Scott Frith wants to add 13 more franchises to the 15 around the state.
"We take the people who have the highest propensity to buy lawn care and look at those demographics to see if there are enough customers to support that," Frith said.
It costs $80,000 to buy a franchise. The company finances half at 12 percent interest over eight years.
He calls mom-and-pop operations his biggest competition, saying Lawn Doctor can draw from its 45 years of experience and marketing savvy to counter that.
"The industry is very fragmented," Frith said.
Batteries Plus offered him technical support, so Kennedy charged forward and planned to open his first store in Greenville. But the store in North Charleston became available after the owner, a heart surgeon from Savannah, was about to close it down. He bought the store in 2001 and a month later opened the Greenville store.
He expanded to Mount Pleasant in 2006, though that store is temporarily closed and will be relocated soon to East Cooper Plaza near Eco Fitness for better visibility and twice as much room. Two years ago, he added the West Ashley store and now has eight locations in South Carolina. He will open a second store in Columbia after the first of the year.
"It's been real good," he said of his franchise choice. "I wouldn't say that it is easy, but I don't know anything that is. You can't just open your door and say, 'Where is the business?' You have to advertise."
Asked if he would do it again, Kennedy said, "I would, but not as fast. In franchising, you have to open additional stores to protect the market. Franchisors want to open new stores and make money. Franchisees want to make money on their store. Sometimes that can be a conflict."
Brown, who chose 360 Clean janitorial service, said the franchise business is not for everyone.
He had worked part time cleaning buildings in the Charleston area before he bought the franchise and decided to talk to the 360 Clean's founder, Barry Bodiford of Charleston, before embarking on the venture in 2009.
Brown now manages 15 accounts, including Roper St. Francis Hospital, that keep him busy. He has 26 employees.
"The best thing I've found out of this is that we are able to put people to work in this economy," he said.
Brown's advice to anyone looking to get into the franchise business is simple: Don't take on too much too fast.
Connecting the dots
For those looking where to start without going into the franchise business blindly, David Schwartz of Daniel Island might be the go-to guy.
In 2009, he launched Franchise Clique, a Mount Pleasant-based business that connects the people looking to get into the franchise business with the more than 2,500 active franchise companies on the market, including Batteries Plus and 360 Clean, though Kennedy and Brown found their connection before Schwartz started his venture.
His company represents widely known franchises such as Quizno's, 7-11 and Aamco Transmissions, but also lesser-known entities such as 9Round, a boxing and kickboxing studio; Care Patrol, a senior care franchise; and Honest-1 Auto Care.
National franchises pay him to find new franchisees. His service is free for those looking to get into the franchise business.
Schwartz spends about $100,000 a month advertising for the companies through the Internet, trade journals and national magazines.
"Two hundred or so franchises open every year based on leads from our website," he said.
Schwartz soon will launch a new website called Franchise Buy as another tool to drive leads to the business. He has 12 employees but hopes to add another 10 by the end of next year.
Reach Warren L. Wise at 937-5524 or twitter.com/warrenlancewise.
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