In the Press
Franchising is on rise
By William Pack
Despite the nation's economic woes and the challenges that come with introducing new products to the market, Rising Roll Gourmet is pleased with its first 10 months in San Antonio and is counting on growth.
"We think it's one of the coolest Texas cities that flies under the radar," said Mike Lassiter, president of the Atlanta-based deli lunch and catering company that hopes to identify a second San Antonio location over the next year. "We're excited about where we fit in the market."
Rising Roll is not alone in its growth planning, and San Antonio won't be the only city to add franchises if, as one study forecasts, the industry is in line for a modest recovery this year.
The International Franchise Association Educational Foundation predicts the nation's franchise business count will increase by 1.9 percent this year, or by 13,928 establishments, and direct franchise employment will jump by 2.1 percent to more than 8.1 million jobs.
The report also estimated that franchisers are responsible for 3 percent of the nation's gross domestic product and that output attributable to franchisers will grow by $21 billion this year to $460 billion.
It's not viewed as dramatic growth, but after three years in which the business count declined and the employment count rose only once, officials were encouraged by the 2012 numbers.
"The good news is we appear to be turning the corner," said Bob Tierno, area developer for the Entrepreneur's Source, a franchise and business consulting business.
Tierno said inquiries to his company suggest franchise growth in Texas will exceed the nation's rate. The state is adding population, didn't see the collapse other states did in housing and has a business-friendly environment, all of which promotes franchise development.
San Antonio has those advantages plus a large number of retirees and wealthy Mexican nationals who might see franchises as a good investment, Tierno said.
He and others see San Antonio as a place ripe for franchise expansion.
Chuck Lennon, president of TeamLogic IT, a networking, security and data services firm, said he was surprised by the large number of small-and medium-size companies - those that depend on TeamLogic the most - in San Antonio. He also was impressed by the city's low operating costs.
"There's tremendous opportunity," Lennon said.
Winmark Corp.'s president of franchising, Steve Murphy, described San Antonio as a "phenomenal market." Winmark oversees one Once Upon a Child outlet and two Plato's Closet stores in San Antonio, the oldest of which blossomed into the company's top-selling outlet in fewer than 21/2 years.
"I'd think there's still a lot of potential here with a good franchise," said Melanie Van Dyke, who owns that top-selling franchise and expects to open a third Plato's Closet in San Antonio by May.
John Dini, president of MPN Inc. business consultants in San Antonio, offered a note of caution.
In the next four to five years, as the baby boomers who helped fuel the franchise explosion retire and die, franchise operators will have a harder time finding enough people with the interest and money to take their place, Dini said.
Copyright © 2012 San Antonio Express-News