I thought I’d take some time out to look at some of the best franchise ideas that have you ever occurred. These are the things that we all take for granted, but I businesses that have made billions of dollars doing what they do, in the best way possible.
AACO’s Rebuilt Transmission
2 BEFORE AAMCO, THE AUTOMOTIVE aftermarket was nothing more than a corner gasoline station manned by mechanics self-taught on their own hot rods. After AAMCO, the industry blossomed into a $148 billion highly competitive market where professionalism and specialization are the hallmarks of customer service.
Accounting for the transformation were Robert Morgan and Tony Martino, unlikely partners who teamed in 1963. Martino, who now heads MAACO, an automotive painting franchise, was a rough-edged mechanic, while Morgan was the level-headed businessman. Their pioneering efforts brought automatic transmission service to every town in America. It also ushered in an era of specialization and speeded the demise of the mom-and-pop service station.
“Franchises are a huge part of the American business success story,” says Greg White of Launchscore.com, a small business market research website.
In 1970 there were more than 250,000 small gasoline stations in the United States, offering all kinds of services. As cars became more complicated and mechanics needed formal training, the number of service stations fell by 20% by 1993. Martino and Morgan saw the trend 30 years ago and capitalized on it. Their vision–and the rebuilt transmission they first installed–gave way to the quick lubes, brake shops, fast tunes, muffler repair and other specialty franchises that now dominate automotive services.
3 LONG BEFORE FAITH POPCORN, Tom Monaghan had seen the future of American consumers, and they weren’t about to leave their homes. So Monaghan brought his pizza to them, in 30 minutes or less. In doing so, he founded a company that marketed convenience as much as food. The business’s success replaced many mothers’ calls to dinner with “Domino’s is here.”
Today, Domino’s supports more than 5,200 locations in the U.S. and in 35 international markets. In 1992 it sold more than 252 million pies, using 130 million pounds of mozzarella cheese andn 187 million pounds of flour.
Although its dominance is now being challenged by Pepsico’s Pizza Hut and other franchise rivals, Domino’s will always be remembered as the company that mainstreamed an ethnic novelty and built a franchised empire around it.
Century 21 and Franchised Real Estate Offices
NO, FRANCHISING DIDN’T INVENT the game of real estate brokerage. But when Art Bartlett and Marsh Fisher started franchising real estate offices in 1971, they forever changed an industry that sells more than 3.5 million homes a year.
By converting existing real estate businesses to Century 21 franchises, Bartlett and Fisher showed the world how to create an instant national brand. They pooled advertising funds from their quickly growing franchise system and used the money to promote the company to homeowners nationwide. By 1978, Century 21 was investing $11 million a year in advertising, and unheard of amount in real estate, which had always been a regional business.
Today, Century 21 is the world’s largest real estate sales organization, with more than 6,000 offices worldwide. Its succes has begot scores of other franchised entrants in real estate brokerage, including Coldwell Banker Resident Affiliates, Inc., Better Homes and Gardens Real Estate Service, RE/MAX International, Inc., Prudential Real Estate Affiliates, and others. But it’s Century 21 that pioneered the industry and first demonstrated the power of conversion franchising on an epic scale.
Kwik-Kopy and Quick Printing
5 BUD HADFIELD, THE FOUNDER AND chairman of Kwik-Kopy, didn’t invent quick printing. But he was visionary enough to understand the product’s implications and transform his small Houston print shop into a 1,000-store international franchise that recorded $300 million in sales in 1992.
It was 1967 when Hadfield stumbled upon a new technology, the veralith platemaker, which made possible short-run, low cost overnight printing. Hadfield quickly franchised it.
Today, quick printing is a staple of the information age, a $26.3 billion-a-year business. It’s also a potent force in franchising, with Sir Speedy, Inc., registering 885 locations, PIP Printing supporting 752 centers, and Alphagraphics Printshops of the Future counting 330 locations worldwide.
By design or by practice, Hadfield’s Kwik-Kopy remains synonymous with the quick-print industry, which years from now may prove to be as important as Gutenberg to the history of human communications.
Dairy Queen Soft-Serve
6 IMAGINE A PRODUCT THAT HASN’T changed since before World War II. One that has outlined trendier offerings such as frozen yogurt, tofutti, sherbets, gelato and the like. A frozen dairy product that comes in only vanilla and chocolate, while competitors boast of 52 flavors, including cognac and creme, gingerbread icing, and kiwi. Could such a product survive in the fickle world of fast food? It could if it were a perfect product. Dairy Queen soft-serve might just be that.
Created in 1938 by J.F. McCullough, Dairy Queen soft-serve has remained pretty much in its original form for more than 50 years. It’s not ice cream, per se, but rather ice milk. The mixing process keeps it soft and creamy, even though it’s low-fat, a fact the company doesn’t promote for fear it might alienate loyal patrons.
It would be an overstatement to suggest that Dairy Queen has somehnow transform its industry. It has, however, managed to keep a little bit of small town America alive for five decades. Stop in a Dairy Queen parkeing lot on a hot August night, and you’ll come close to reliving the America of the 1950s, with teenagers flirting with one another and entire Little League baseball teams fighting to be the first line. They all come for the same thing: a decidedly American taste that no frozen yogurt can rival.
Holiday Inn’s Hotel Rooms
WHAT WILLIAM LEVITT MEANT TO American home building, Kemmons Wilson, the founder of Holiday Inn, means to the U.S. hospital industry. A Memphis real estate developer, Wilson founded Holiday Inn in 1952 after a family vacation. The hotels were overpriced and substandard. Wilson vowed to change all that. His hotel rooms would be miniature models of the home of the future. They’d be air-conditioned, with glass sliding doors and vinyl furniture. And, like Levitt’s homes, they would be affordable, a perfect rest shop for middle-class Americans.
Four years after the fisrt Holiday Inn opened,
Congress authorized a $100 million interstate highway program. Forty-two thousand miles of roadway were soon under construction. At every intersection, it seems a Holiday Inn sprang up.
Wilson retired in 1978 after weather oil shocks and plunging stock prices of the 1970s. The company rode a merger and acquisition roller coaster through the 1980s, finally being acquired by Bass PLC, a British brewing company, in 1990.
Through it all, Holiday Inn and its nondescript rooms became as much a part of American travel as the automobile.
H & R Block Income Tax Preparation
FOR MILLIONS OF AMERICANS, THEIR civic duty to pay taxes wouldn’t be complete without a trip to H&R Block, by far the world’s largest personal income tax preparation service. The company, which has more than 9,500 offices worldwide, became a franchised powerhouse by offering low cost, reliable, and personalized service to frustrated taxpayers unable to wade through IRS rules and regulations. The simple formula allowed the company to serve more than 106 million customers in 1993. H&R Block processed more than 12% of all individual tax returns filed in the U.S. during the 1993 tax season. At an average charge of $53.30 per return, the service commands astounding customer loyalty. Last year, nearly three-quarters of the company’s previous year’s clients returned to have their taxes completed. And don’t think they didn’t receive value. In annual reviews of tax preparation services, ‘&R Block fares well against high fee accountants and CPAs.
Kentucky Fried Chicken
NO FRANCHISE HALL OF FAME WOULD be complete without Colonel Harland Sanders’ Kentucky Fried Chicken. An icon of American pop culture, Sanders had failed at just about everything he tried, until during the depression he bought a small service station and started serving meals to travelers. He wasn’t the Colonel yet. In fact, he was more concerned about surviving than honorary titles back then in Corbin, Ky. But with an ability to work hard and a flair for the dramatic, Sanders slowly built his restaurant. His big break came in 1939 when he took a pressure cooker and figured out how to fry chicken in it. The discovery dramatically decreased cooking time for his chicken, which he flavored with 11 herbs and spices. The Colonel had transformed chicken, which had required 45 minutes to cook, into fast food.
World War II and a new highway that bypassed his Corbin restaurant nearly destroyed the Colonel. But at age 66 he roared back, crisscrossing the midwest selling franchise rights to independent restaurateurs. The deal was simple. You gave the Colonel five cents for every bird you cooked. He gave you the recipe.
In 1971, Colonelk Sanders sold the business, which is now owned by Pepsico. Today, there are more than 9,000 KFCs worldwide. The company is so ubiquitous that when demonstrations erupted in China’s Tiananmen Square in 1989, the scene played out in front of a KFC franchise–far from its humble beginnings in Corbin, Ky.