Early entry is one of the keys to franchise success. It gives investors a jump on the market and allows them to establish their business and target their clients without having to fight off rivals from the moment they open for business. The systems profiled below are first class examples of early entry opportunity.
With the growing number of products that can be delivered to your door, why should industrial supplies be any different? That’s the idea behind LGI Industrial & Construction Supplies, based in Maple Ridge, British Columbia, a suburb of Vancouver.
Greg Porter, President and CEO of LGI, says that by going mobile, he wanted to duplicate the success the company has had with its bricks-and-mortar business in Maple Ridge. LGI mobile operations provides on-site delivery of fasteners; hand, power, and cutting tools; safety supplies; abrasives; fluids; and more to commercial and residential sectors such as mines, manufacturing, and hospitals. “Each LGI van is fully equipped with inventory that our clients use,” says Porter.
Porter began the business in 2003, and started franchising in 2010. “The idea of a mobile franchise seemed to make a lot more sense,” he says. “It provides greater levels of service, and a higher profile.” At the moment, LGI has two mobile franchises on the West Coast. Porter, who has a background in industrial distribution, says expansion is definitely in the works, “But we’re taking our time to get it right. We’re focusing on Western Canada first.” In the next 12 months, the plan is to open six more franchises, and from then on, Porter aims to add 10 a year.
Porter says it’s generally men who are interested in investing with LGI, usually aged 35 to 55. He’s looking for franchisees who are sales and customer oriented, and who can build and maintain relationships with new and established clients. Although a specific background is not required, Porter explains that coming from a related industry would give a franchisee a much quicker start.
The cost of a franchise is $90,000, which also covers the expense of that first inventory of supplies. Training takes up to two weeks, with continued training available after initial training is complete.
One benefit of an LGI franchise, says Porter, is its vertical integration. The company maintains its own warehouse, from which all franchisees buy their stock, allowing them to enjoy cost efficiencies. Another benefit is what he calls LGI’s “ease of business,” taking into account such matters as the low cost of starting up, and the depth and breadth of the service it provides to so many industrial sectors.
Nimrod Oren remembers how he and his business partner, Boaz Mestbaum, checked out every retail mall they could, both in the U.S. and Canada, in search of the right concept. “We were always on the lookout for something new,” says Oren.
And they found it: the pretzel. The staple of American ball parks has been around forever, but the time was right, Oren continues, to serve the simple piece of twisted, baked dough to Canadians from kiosks and stores coast-to-coast.
Toronto-based Oren calls the pretzel an “in-between snack” for people on the go. It’s a relatively simple concept, he says, and franchisees don’t need to know much about food, since they aren’t investing in a restaurant. In fact, “The trickiest part of running a Mo’s franchise may be rolling and shaping the dough the right way,” says Oren with a laugh.
Mo’s Golden Pretzels are freshly made in batches on-site every day using Canadian and locally-sourced ingredients. Its target market is just about everyone, from families to seniors. “We cast a wide net,” says Oren. A kiosk costs between $100,000 and $130,000, and a store from $160,000 to $300,000, and both are turnkey operations. Training takes three weeks, with continued support available after that.
Oren, who has just started franchising, began Mo’s Golden Pretzel in 2015. There are two corporate locations, in Brampton, Ontario and Toronto, and a third was scheduled to open this summer, also in Toronto. Many of the potential investors he’s talked to are married couples or entire families, says Oren.
He emphasizes that Mo’s Golden Pretzel is mall-based, but not a food court business, and as for expansion, Oren says at this point, he and Mestbaum will check out any location. “All we need is traffic. That’s it.” Although these are early days, the system will eventually be rolled out nationally and internationally.
Oren is looking for highly motivated investors with strong people skills, and a business background would be useful, but isn’t necessary. “We are very comfortable with talking to anyone with or without franchise experience, as we are confident we can guide them through the process,” he says.
As for the benefits of investing with Mo’s Golden Pretzel, Oren explains that the system offers a great-tasting product, and an all-Canadian brand. In addition, there’s the low investment involved, and the extensive retail experience provided by the Co-owners. Oren and Mestbaum are hard-driving business executives, and franchisees can take advantage of that, Oren says.
JR Justesen, Owner and CEO of Vibes Fitness in Vancouver, British Columbia, says he’s working hard to get the system he bought this past Spring “shipshape” so he can follow through with his plans for expansion on Canada’s West Coast.
Justesen has two corporately-owned studios, in Vancouver and Victoria, and two franchises on Vancouver Island in Sidney and Oak Bay. He hopes to have a third franchise by the end of 2017, either in Vancouver itself or somewhere else in British Columbia. “My feeling is we’ll have it in the pipeline,” says Justesen, a physiotherapist.
Vibes Fitness offers individual fitness programs that use vibration machines. These machines increase the force of gravity on a client’s body, and provide similar results to those achieved performing weight-bearing exercises. However, says Justesen, his vibration machines are fast and efficient, and are gentler on the body than a regime of pumping iron in the gym to replace lost muscle mass and to increase bone density. Most of Vibes’ clientele are women in their mid-40s to their mid-60s, and women make up about 80 per cent of the system’s overall membership.
The cost of a franchise is $90,000, which includes three vibration machines. Those who have invested with him or who are interested in doing so are “devotees” of Vibes, says Justesen. “They are made up of members whose lives were transformed.”
Vibes’ studios, which Justesen describes as “spa-like,” are typically 650 to 850 square feet, with much individual attention paid to each client. Fees range from drop-in charges to monthly payments. The training to run a franchise takes a couple of days, and a fitness and training background is a must. Justesen explains that operators must hold British Columbia Recreation and Parks Association fitness certification as a minimum requirement.
As for the benefits of investing in Vibes, Justesen says they are many. As examples, he notes the satisfaction of changing lives for the better; a very lean business model; strong revenue potential based on the spa-studio setup; and a large target demographic. As he says, “Older adults don’t have as many fitness options [as younger people] these days. Vibes fills the bill.”
By David Chilton Saggers