{"id":7708,"date":"2015-01-25T16:00:24","date_gmt":"2015-01-25T23:00:24","guid":{"rendered":"http:\/\/financenewmexico.org\/?p=7708"},"modified":"2015-02-27T13:57:56","modified_gmt":"2015-02-27T20:57:56","slug":"new-mexico-businesses-start-big-with-franchise-ambitions","status":"publish","type":"post","link":"https:\/\/financenewmexico.org\/sandbox\/articles\/starting-or-growing-a-business\/new-mexico-businesses-start-big-with-franchise-ambitions\/","title":{"rendered":"New Mexico Businesses Start Big with Franchise Ambitions"},"content":{"rendered":"
\"Olo<\/a>

Olo Yogurt Studio<\/p><\/div>\n

By Finance New Mexico<\/em><\/p>\n

Multinational franchises like McDonald\u2019s and KFC started small and worked their way up the food chain over decades. That methodical approach to growth seems too slow for the owners of two Albuquerque businesses.<\/p>\n

Before Olo Yogurt Studio opened its first store in 2010 and WisePies served its first pizza in 2014, the owners of both ventures planned to become franchises \u2014 and to waste no time doing it.<\/p>\n

Olo Yogurt opened a second store \u2014 a carbon copy of its colorful original \u2014 within three years and was strengthening its brand for further expansion. WisePies was less than a year old when it announced its intentions to open 20 new stores within a year and to offer franchise licenses for $35,000. In December, the company signed a $5 million deal for naming rights to the University of New Mexico \u201cPit\u201d \u2014 now the WisePies Arena.<\/p>\n

The franchise or chain-store model isn\u2019t the only way for a business to grow, but its appeal is obvious. A franchisor can recruit talented go-getters who want to run a business with a built-in market, name recognition and institutional support. And they can do it without draining their capital budgets, as franchisees typically pay much of their own startup costs.<\/p>\n

The franchise model increases the business\u2019s revenue exponentially and quickly \u2014 and for lots less money than the franchisor would pay to open and run numerous stores on its own. The franchisor gets a royalty and other ongoing fees \u2014 say, for advertising \u2014 from individual stores in return for letting the franchisee use its marketing and operating strategies and brand name.<\/p>\n

The franchisee receives other benefits besides branding and advertising. Franchise contracts differ, but the franchisor usually trains the franchisee in store management and provides ongoing support and bulk rates on franchise-specific supplies and goods. Some franchises build the store\u2019s exterior \u2014 especially when the building is essential to brand recognition \u2014 and leave the interior setup to the franchisee.<\/p>\n

Benefits aside, franchises aren\u2019t fiefdoms, and the franchisee isn\u2019t an employee who can be ordered around. Franchisees own their stores and have significant autonomy: They can\u2019t be forced, for example, to introduce a new product unless the contract says they must. If they stray from the established business model, they could founder and harm the image, brand and profits of the parent company.<\/p>\n

A business in a hurry to open might compromise on site selection, for example, and pick a poor location. A franchisor might over-saturate the market, forcing franchisees to compete against each other. And when franchisees fail, it ripples back to the parent company, with devastating consequences.<\/p>\n

That\u2019s one reason why franchisors and franchisees sometimes find it difficult to obtain a loan from a traditional lender. Before undertaking rapid replication through franchising, a business owner should talk to an attorney and a banker with expertise in this field. Accion, The Loan Fund and WESST are New Mexico nonprofit lenders with experience lending to franchise businesses. Visit http:\/\/financenewmexico.org\/category\/funding\/loans-funding\/<\/a> for more information.<\/p>\n

Download\u00a0382_New Mexico Businesses Start Big with Franchise Ambitions<\/a>\u00a0PDF<\/p>\n","protected":false},"excerpt":{"rendered":"

By Finance New Mexico Multinational franchises like McDonald\u2019s and KFC started small and worked their way up the food chain over decades. That methodical approach to growth seems too slow for the owners of two Albuquerque businesses. Before Olo Yogurt … Continue reading →<\/span><\/a><\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[3],"tags":[],"_links":{"self":[{"href":"https:\/\/financenewmexico.org\/sandbox\/wp-json\/wp\/v2\/posts\/7708"}],"collection":[{"href":"https:\/\/financenewmexico.org\/sandbox\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/financenewmexico.org\/sandbox\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/financenewmexico.org\/sandbox\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/financenewmexico.org\/sandbox\/wp-json\/wp\/v2\/comments?post=7708"}],"version-history":[{"count":6,"href":"https:\/\/financenewmexico.org\/sandbox\/wp-json\/wp\/v2\/posts\/7708\/revisions"}],"predecessor-version":[{"id":7786,"href":"https:\/\/financenewmexico.org\/sandbox\/wp-json\/wp\/v2\/posts\/7708\/revisions\/7786"}],"wp:attachment":[{"href":"https:\/\/financenewmexico.org\/sandbox\/wp-json\/wp\/v2\/media?parent=7708"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/financenewmexico.org\/sandbox\/wp-json\/wp\/v2\/categories?post=7708"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/financenewmexico.org\/sandbox\/wp-json\/wp\/v2\/tags?post=7708"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}