April 2014
| Business World Magazine | 75
tend to score a little better on the “quality of
life” areas of the survey, and high-cost invest-
ments do a little better in the financial/prof-
itability areas. Of course, many low-cost op-
portunities also have the potential for a high
return on investment, and many high-cost
concepts offer a work-life balance, but this is
a generalization based on the thousands of
franchisees researched each year.
Some franchisors of traditionally higher-
priced concepts have expanded their model
to include lower-priced options.
MaidPro introduced a lower-cost option
– the “Select Model” – for candidates with
less than $50,000 to invest in a franchise.
“We’ve seen that lowering the minimum
investment and offering additional financing
has really helped potential franchisees start
a MaidPro, when in the past they would not
have been able to do so,” said CEO Mark
Kushinsky.
East Coast Wings & Grill recently ex-
panded its offerings to include QSR op-
portunities for franchisees who already own
a flagship restaurant. Existing East Coast
franchisees can open a QSR location for
$325,000 (compared to around $650,000
for full service restaurant). CEO Sam Ballas
told us they began researching and prototyp-
ing this model a few years ago in an effort to
offer less expensive multi-unit opportunities
for franchisees and to offset a projected real
estate shortage.
“We’ve been closely studying real estate in
the past years and see a real crunch coming
in 2014 and 2015,” Ballas said. “We’re just
not going to be able to find the 4,000 foot
space that the food sector is going to need.”
On the flip side, pest extermination fran-
chise Truly Nolen actually increased its cost
of entry to ensure new franchisees are prop-
erly capitalized for quick success.
“We found that people who have the
money to hire an extra salesperson right out
of the gate perform better,” said Scott Nolen
of Truly Nolen. “We also insist franchisees
have newer vehicles because old ones cause
distractions and service breakdowns, which
affects profitability in the long run.”
Although the tightness of the lending
landscape has leveled off, heightened lender
expectations are here to stay. Along these
lines, Weed Man recently launched an inter-
nal financing program to help qualified fran-
chisees get into the system.
“When we were talking to candidates,
we’d get them all the way down in the award-
ing process and we thought they were a good
