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New franchise owners bring lessons
from corporate world

By Davis Bushnell, Globe Correspondent, 8/31/03

Globe Staff Photo/Wendy Maeda Craig L. Dillman (right) reviewed the weekly schedule of workflow and deliveries with transmission builder Ron Dupont. Dillman bought an AAMCO Transmissions franchise in Leominster last December.

When all else fails, there's always the option of buying a job. And many people are doing just that - using money they've socked away to buy a franchise.

''Bad times are always good times for the franchising industry,'' said Donald DeBolt, president of the International Franchise Association, a trade group based in Washington, D.C., that has 800 franchisors as members. The largest is McDonald's, with 18,361 restaurants operated by people who've bought small slices of the huge chain's pie.

Because of the fallout from the economy, people looking to start a franchise often have impressive credentials, gained from a corporate world where they were eventually sent packing, DeBolt and others said.

''In terms of skills and financial backing, due to golden parachutes, there are more qualified candidates today than there have been in a decade,'' DeBolt said.

This is not a market for low rollers.

Franchise entry fees, according to the trade group, are stiff. Fees generally start at $100,000 and range upward to $647,000 for a McDonald's in a prime location.

Craig L. Dillman, 47, who ponied up about $300,000 to buy an AAMCO Transmissions outlet in Leominster last December, agreed that lessons learned in the corporate arena are indeed paying off.

''Skills such as business-to-business marketing can be applied to a small business like mine,'' said Dillman, former general manager of a Worcester ceramics division of Saint-Gobain Industrial Group of Paris, which acquired the local Norton Co. in 1990.

At the same time, Dillman and others say they relish being away from the corporate culture so that they can adopt a new independent lifestyle. The mantra frequently heard is, ''I want to control my own destiny.''

That takes hard work, however, both in researching a franchise, acquiring an outlet, and then turning it into a going concern, job counselors and franchising specialists emphasized.

''Some former senior executives look upon franchising as a hobby, without realizing that they're probably going to have to work 60 hours a week,'' said Stephen Spinelli, a founder of the Jiffy Lube chain in 1978 and currently director of Babson College's Center for Entrepreneurial Studies.

Carl Brewer, a former McDonald's franchise owner, added, ''You may think you can be your own boss, but your customer is always your boss.''

Brewer is now a career counselor in the Boston office of SCORE, or the Service Corps of Retired Executives, a unit of the US Small Business Administration.

The experiences of Dillman, who is the boss of five workers, and Randy Tomsyck, 46, of Wakefield, who is just getting started as owner of a NaturaLawn of America Inc. franchise, reflect the opportunities and challenges of beginning anew as franchisees.

In October 2001, Dillman, who has a bachelor of science degree in ceramic engineering from Rutgers University, was told that he was being transferred to Paris.

''I said I didn't even want to discuss a move,'' Dillman recalled. ''I had traveled enough, helping manage seven plants on seven continents, and, besides, I was going through a divorce.''

So, after a four-year stint, he left Saint-Gobain, ''with a golden parachute,'' and signed on with New Directions, a Boston out-placement firm.

''What surfaced quickly,'' Dillman said, ''was my entrepreneurial bent, which was encouraging since I had no loyalty to the corporate world.''

He then researched a variety of franchises, finally zeroing in on AAMCO, which, he said, checked out as ''a good business, always tops in its field and known for giving excellent support'' to franchisees.

Although he likes cars, Dillman said he was drawn to AAMCO because it is interested ''in changing the demographics'' of store owners, appealing to individuals who had been corporate managers.

His style, he said, is to strategize in his office rather than roll up his sleeves and get underneath vehicles in the maintenance bays. He's concentrating on going after the fleet market segment - bus companies, for example, he said.

So far, he's been able to get the outlet in the black, he said, adding, ''This is a recession-proof business because people are holding onto their cars longer.'' He pays the franchisor weekly royalties amounting to 7 percent of gross sales, he said. Sales figures are proprietary.

Down the road, he said he'd like ''to open one shop a year.''

Dillman and others are finding that buying a franchise is not very different from buying a business of any kind. ''The difference is that franchisors have a business model already in place, and they control the business model, taking their cut off the top,'' said Douglas Dickson, a vice president of the New Directions firm.

Franchisors ''have experience behind them, and that's what appealed to me,'' said Tomsyck, who began surfing the Internet for franchising data after being laid off a year ago as a business systems analyst for a unit of Fleet Bank.

He then linked up with franchising consultant Michael Salach of Salem, N.H., who has business relationships with about 80 different franchisors.

Salach suggested that he look seriously at acquiring a franchise from NaturaLawn, a lawn treatment service that doesn't use chemicals, Tomsyck said. ''The lifestyle - being outdoors instead of in an office - and the environmentally friendly service appealed to me.''

Lawn-care services, along with remodeling and handyman services and Asian food stores, are among the hottest franchises today ''because they cater to busy homeowners,'' said DeBolt of the franchise trade group.

Last month, Tomsyck signed an agreement with the Frederick, Md.-based franchisor. He paid an upfront fee of $29,500, he said, with an understanding that he would plunk down about $75,000 for equipment and a leased office. He also will have to pay a weekly royalty fee, based on 9 percent of total sales.

''I had some money tucked away,'' he said. His wife, Patricia, works for Fleet Bank.

Originally, he had hoped to begin serving customers next month or October. ''But I have to do a lot of marketing, so it could be next spring before I can get going,'' he said. His franchise's territory, he added, is a big chunk of Middlesex County. The closest NaturaLawn franchisee, he said, is in Marlborough.

If things don't pan out, then he probably would look again for a corporate job, Tomsyck said. ''And I've always considered going back to school to take courses on taxation.''

Over a four-year period, the turnover rate among franchise owners is between 8 and 10 percent, DeBolt said. ''But that includes changes of ownership - not just failures.''

Davis Bushnell is a freelance writer. He may be reached at davisbushnell@compuserve.com.

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