How difficult is it to own your own franchise?
(reproduced from The Herald-Mail ONLINE)

One local owner says hire an attorney and an accountant before you take the plunge

By PEPPER BALLARD pepperb@herald-mail.com

TRI-STATE - Sharon and Robert Wyne split parenthood with split shifts after they opened Hagers-town's first 7-Eleven franchise on Dual Highway in 1968.

Nearly 40 years later, the Wynes - now in a different Dual Highway location - continue taking turns tending the franchise they bought as an enterprising young couple.

"We had a lot of high hopes as young people," Sharon Wyne, 62, said in a recent phone interview. "Some years have been good. Some years have not. Some years have been disastrous."

Whether it's young adults looking for a business opportunity or older adults looking for ways to spend their retirement, the attraction to franchised small businesses has increased across the United States in recent years, said Terry Hill, vice president of communications for the International Franchise Association.

Since there's no such thing as a franchisee license, figuring out how many franchises are locally operated is a difficult task, said Cassandra Latimer, deputy director of the Washington County Economic Development Commission.

"There's not a franchisee-specific license that companies would have to have to do business in Washington County," Latimer said. Hill agreed that the numbers are hard to pin down since there are so many different layers of ownership.

There are three main types of franchises, according to franchise.com:

• Business format franchises, such as 7-Eleven and Meineke, companies that sell to franchisees the right to sell their goods or services and use their business models.
• Distributorships, such as auto dealerships.
• Trademark or brand name licensing, which grants licensees permission to use a company's trademark in conjunction with a business, such as Coca-Cola and the New York Yankees, according to franchise.com.
  

Buying into a passion.

Retired Hagerstown Police Department Lt. Rick Johnson bought baseball business franchise Extra Innings last year as a way to spend his retirement doing something he loved alongside his baseball-loving son, Matt Johnson.

Matt, 24, is serving as the general manager.

Rick Johnson learned of the Extra Innings franchise in 2005 and, after doing research, decided that owning the business was how he wanted to spend his retirement. Johnson said he enjoys following children's baseball and softball successes in the newspaper, and makes sure to congratulate the youths on their improvements when he sees them at the training facility.

"You really have the ability here to make a difference in kids' lives," said Johnson, 54. At the 20,000-square-foot facility on Business Parkway in Huyetts, children and adults receive baseball and softball training and hit balls in indoor batting cages. The facility offers a variety of baseball and softball instruction, and also has a store where players can buy equipment.

The work atmosphere is much different for Johnson, who spent more than 30 years at the police department, 20 of those performing and supervising drug and criminal investigations. "I want to be able to feel good and have fun doing something a lot different than police work," Johnson said. As a police officer, he often saw "the dark side of humanity." Now, Johnson said, he smiles a lot more.

He said his transition into franchisee was made easier because of all of the research and interaction among Extra Innings franchisees he had before he bought the business. Johnson stressed that it's important for anyone getting into a franchise to hire an attorney and an accountant. He has support on business dealings from the franchise headquarters in Massachusetts, a perk other franchisees share with their headquarters.

Owning a franchise.

Sharon Wyne said she, too, likes being able to call on the franchise headquarters with any problems. Johnson said his franchise has an online message board that franchisees use to communicate about their issues.

Larry and Krissy Lederer are embarking on their first franchise as franchisees with Express Personnel Services in Greencastle, Pa. He, too, said he likes the support system available through the business' corporate headquarters. Franchisees also have the benefit of paying into a marketing pool that helps distribute and produce advertising, Hill said.

Like Johnson, Larry Lederer said he did a lot of research before settling on Express Personnel Services. He said that the chain shares similar values with him, including a foundation in Christianity. "When you're a franchisee, you have some opportunities and leeway that you don't have when you have a boss," Wyne said.

On the other hand, most franchisees have to pay for their own health insurance and retirement. Wyne said that as franchisees, she and her husband also are responsible for doing the store's taxes.

Although franchisees pay for the rights to run the business, they must pay back a percentage of their gross sales to the franchiser under the terms of their contract, according to franchise.com. "You have a contract, and it's very much spelled out what's expected from you and what you can expect from them," Wyne said.

There also are restrictions.

For example, franchisees are restricted in the use of the franchise, such as what they can sell and how they can operate, according to franchise.com. Wyne and her husband moved to Hagerstown in 1968 to open the franchise and to raise a family. Their original store was in a former mom-and-pop grocery store. In December 1982, after that first store was closed, the couple opened another 7-Eleven store farther down the road.

Owning a franchise is a lot like owning any other type of business, Hill said. "It's going to require long hours, hard work and capital, but you're starting much farther down the path than an independent business owner," Hill said. "(The franchise) puts you in a marketing position of building that business where you would be well ahead." Johnson said, "Bottom line, if you're going to do a franchise, if you don't have the time to spend at your business, you're not going to be successful. You have to know what's going on."

At the outset, franchises generally cost more money to start up than private businesses, but Hill said that's because more money has been spent to develop the business than one that hasn't taken off yet.

"It's not for everyone," Hill said. "There are some people who would not feel comfortable taking orders from someone else."