Franchise Success in Omaha

If your house is messy, your stomach is rumbling or your grandpa is rattling around alone in his house, don't blame Omaha.

"Omaha has been a wonderful, wonderful city for franchising," said Tom Guy of the Ellis & Guy advertising firm, who was a part of the early franchise business in Omaha.The city has done its part to keep the nation well-fed, happy and clean through a type of venture that can spread rapidly worldwide and generate billions of dollars in sales.What is it?It's franchising, and over the past 35 years the city's entrepreneurs have spawned at least a half-dozen operations that have gone nationwide and, in some cases, worldwide.Every day, employees of Omaha-originated franchises clean thousands of homes, inspect thousands of properties, serve thousands of pizzas and sandwiches and perform chores for thousands of senior citizens, from Europe to Asia and all across the United States.
Franchise businesses with Omaha ties
Little KingFounded: 1968 Initial investment: $30,000- $80,000 Total investment: $140,000- $240,000 Royalty: 6%Outlets: 8 franchisees, 15 storesNational Property InspectionsFounded: 1987 Initial investment: $21,800 Total investment: $28,500- $31,000 Royalty: 8% Outlets: 262 in the U.S. and CanadaHome Instead Senior CareFounded: 1994 Initial investment: $32,500 Total investment: $44,000- $57,600 Royalty: 5% Outlets: 800 centers in 12 countriesGodfather's PizzaFounded: 1973 Initial investment: $0-$20,000 based on a number of factors Total investment: between $10,000-$550,000 Royalty: varies, based on a number of factors Outlets: about 620 in more than 40 statesRight at HomeFounded: 1995 Initial investment: $32,500 Total investment: $50,000- $80,000 Royalty: 5% Outlets: 155Merry MaidsFounded: 1979 Initial investment: $19,000- $27,000 Total investment: $23,350- $34,450 Royalty: 5-7% Outlets: 1,421The MaidsFounded: 1979 Initial investment: $10,000 Total investment: $74,000- $221,000 Royalty: 3.9-6.9% Outlets: More than 1,000 marketsSource: The Franchise Mall Those involved in franchising say Omaha's success is built, in part, on:• A service-oriented Midwestern mind-set.• A willingness to share the secrets of building a successful franchise.• The ability of key individuals to turn good ideas into businesses that can be replicated almost anywhere."Omaha has been a wonderful, wonderful city for franchising," said Tom Guy, who tied his marketing expertise into several successful franchises.Consider this history:Willy Theisen knocked a hole in the wall between his bar and an adjacent pizza restaurant and began selling pizzas to his customers. Convinced that the thick-crust pizza could compete with Pizza Hut's thin-crust version, he launched Godfather's in 1973. He sold the company in 1983 for $306 million.Dallen Peterson realized in the late 1970s that women joining the work force wouldn't want to come home and clean house. He started Merry Maids, selling it in 1988 for $25 million.Peterson protégé Paul Hogan and his wife, Lori, saw that elderly parents of busy and often far-flung children could thrive in their own homes with a little help from a caretaker. The Hogans started Home Instead, which is expected to generate $650 million in revenue this year on three continents."Dallen helped me rifle in on the senior market," Paul Hogan said.There's also Right at Home, a senior care company that includes in-home medical services; The Maids, another home-cleaning company; and Little King sandwich restaurants.A different kind of service franchise caters to businesses instead of individuals. National Property Inspections Inc. provides information on such details as home condition, energy consumption and safety features.Colin Bishop, executive vice president of The Maids, said developing a true, successful partnership with the franchisee is key. That sort of cooperation seems commonplace in the Midwest, he said.In 30 years, Bishop said, The Maids has had only two lawsuits, an outstanding track record considering the decades of business dealings with franchise holders.Merry Maids founder Peterson said Godfather's success inspired him, and he knew Tom Guy and Rick Ellis from working at Fairmont Foods' snack division. Their advertising firm, Ellis & Guy, handled Godfather's marketing campaign, which featured actor J. William "Bill" Koll as a tough-talking gangster who virtually ordered people to buy pizza.Peterson figured that if he could operate a successful home-cleaning service in Omaha, it would be the sort of business that could be franchised: Capital costs were low; most people could understand the necessary training; and the demand was nationwide.Guy helped develop the name - No. 12 on a list of 35 proposed names.Peterson said just being from Omaha was an advantage."The transportation in and out was good, and the work ethic of the people in Omaha was wonderful," Peterson said. "We were able to get talented people on our staff."
Franchises work best for a business:
• With a good track record of profitability• Built around a unique or unusual concept• With broad geographic appeal• That is relatively easy and inexpensive to operate• That is easily duplicated Once you have the right concept, he said, franchising is built on relationships, which in turn depend on choosing the right franchise holder.During the selection process, finalists came to Omaha to learn more about the company."Everyone who came to Omaha would come with a kind of skepticism," Peterson said. "But by the time they spent a week in Omaha, they always were so impressed. There's something about Omaha, the people, the culture, the work ethic, the integrity - all those things were factors."Success built upon success.Peterson and others who started franchise operations gave money to launch the International Center for Franchise Studies at the University of Nebraska-Lincoln, which attracted business students with franchising in mind.Franchises work, say Peterson and others, because they give franchisees a successful formula for doing business, letting them tap into an established brand backed up by training, advertising, equipment and other proven features.And franchises reward people who want to be their own bosses. The drawback, in comparison to starting an independent business, is that the franchisee must pay start-up fees and royalties to the owner of the corporation.An estimated 5,000 franchise companies operate in the United States, making $600 billion in annual sales. They created 1.2 million new jobs between 2001 and 2005, according to national franchise groups.Roland Bates was a contractor who saw a need for qualified inspections of residential and commercial properties. He started National Property Inspections in 1987."This is the kind of place that people still feel you can do business on a handshake and people keep their word," Bates said.Bates eventually met Allan Hager, a hospital administrator who had his own idea for a franchise: a senior care service that would provide in-home medical care as well as light housekeeping, errand and other services."He wanted to know more about what was involved in franchising," Bates said. "He picked my brain. We visited for months."The relationship has continued, Hager said."He was very generous in showing me the nuts and bolts," Hager said of Bates.For example, Hager learned that before offering a concept to franchisees, he needed to assemble and have in place all pieces of a franchise. Those include information technology, marketing, employee recruiting, legal details, pricing and screening of franchise applicants."I think the business climate here is terrific," he said. There's a trust factor in the Midwest. That's just the way people are here." • Contact the writer: 444-1080, steve.jordon@owh.com