Visit show to investigate buying into chain


August 05, 1991|By David Young | David Young,Chicago Tribune

CHICAGO — Holy cow! It's Ho-Lee-Chow.

"It's the same concept as Domino's Pizza -- fresh quality [Chinese-style] food delivered to your door," said Amy B. Jones to one of the estimated 8,000 visitors at the recent International -- Franchise Association's show in the O'Hare Holiday Inn in Rosemont, Ill.

HLC -- for Ho-Lee-Chow -- America Inc. was one of 75 exhibitors dispensing information to potential franchisees on everything from mobile Venetian blinds cleaning to pet stores.

There were some familiar names, such as MAACO, Dunkin' Donuts, Hardee's, 7-Eleven and Baskin-Robbins. There also were some relative unknowns, such as Two Twins from Texas, the blinds cleaners.

The visitors, who paid $5 a head to attend even though many said they were unemployed middle managers who were victims of recent mergers or downsizings, were mostly looking. There were no quick deals.

"Most of the people who are here or who came to the show in Atlanta don't like their [current] job," said John Appel, president of Leadership Management Inc., of Waco, Texas, a firm dealing with management training. "So they're coming here out of discontent. Most won't act on it."

Twenty-two-year-old Christopher Marshall of Naperville, Ill., who sells credit-union services to corporations, did not disagree with that assessment of visitors like himself. "I'm looking to get ideas," he said.

"We don't have the ability right now to write a check for $100,000," said his companion, Bill Sechter, 27, who also is in sales.

The franchisers are also choosy.

Ira Rashap, director of franchise development for Docktor Pet Centers Inc., said he is not necessarily looking for a doting animal lover who wouldn't step on an ant as much as a management type who has worked for a retailing chain and is familiar with business systems. "You have to be able to manage as many as 12 employees, and we use a lot of complicated systems," Mr. Rashap said. Negotiations with potential franchisees usually take months.

Still, buying a franchise can be a first step toward financial independence . . . or a first stumble into a nightmare of indebtedness.

Just ask Jeff Tuckey and John Keaveny. One of them is a winner in the franchise game. The other is asking himself why he ever got involved.

Jeff Tuckey, who bought into Rainbow International, a carpet-dyeing and cleaning business on the North Side, said the freedom of being able to work when he wants to was worth the struggle.

He and his partner often work seven days a week, cleaning and dyeing carpets, balancing books, answering the phone and mailing bids and bills from their office-in-the-home here.

"If I don't have to work tomorrow, I don't," Mr. Tuckey said. "I like that."

Until two years ago, the 42-year-old knew almost nothing about carpet care. For five years, he was president of a Chicago cable-television installation company. He worked 16 hours a day, six days a week, overseeing a handful of employees and suffering all the headaches of being the boss.

"The stress and amount of time caused me not to have any other life," Mr. Tuckey said. "So I left."

With the money he had saved from working at the cable company, Mr. Tuckey decided he would travel. One day he got a phone call from someone at Rainbow who asked him if he would be interested in a franchise. Mr. Tuckey said he doesn't know how the person got his name.

He had considered franchising before, Mr. Tuckey said, but he didn't want to work in food service or have to operate a building.

"I laughed when I got the call," he said. "I didn't know anything about carpets."

Nevertheless, he contacted some of the other Rainbow franchisees -- 2,000 nationwide -- and listen to what they had to say about the company.

He spent two days at Rainbow's training center in Waco, Texas, talking to personnel and studying the company's financial records.

"Anybody who looks into a franchise and doesn't look into the financial records of a company is crazy," Mr. Tuckey said.

He decided to take $40,000 out of his savings and buy a Rainbow franchise. His first cleaning job was Memorial Day 1989.

Mr. Tuckey now has two trucks, two part-time workers and 200 clients, including two hotel chains. He estimates his firm grossed almost $60,000 in its first year -- enough to cover start-up costs, though his take was minimal.

He expects his profitability to grow substantially next year.

"I think you have a far greater chance of success if you franchise, than if you start from scratch with your own," he said. "They [the company] already started the groundwork."

L Then there is John Keaveny, who wishes he never got started.

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