FBR_RetailREV_2008LR

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April 2008 | Franchise Business Review 1

retail franchises

April 2008

FranchiseBusinessREVIEWDriving Better Results

franchisee

satisfaction

report



2 Franchise Business Review | April 2008 www.FranchiseBusinessReview.c

Life’s not just about making a living.

It’s about making a difference.

For more than 20 years, Parable has helped Christian retailers by providing the toolsto grow their ministry. Parable Franchising can help you make a difference with aturn-key business plan for opening and operating a Christian retail store.

www.parablefranchise.comCall today to find out more: (800) 366-6031, ext. 518.




D E P A R T M E N T S

9 O V E R A L L SA T ISFA CT ION

10 M A R K E T I N F O R M A T I O N

11 B U S I N E S S L I F E S T Y L E

12 F R A N C H I S E E D E M O G R A P H I C S

13 S U R V E Y M E T H O D O L O G Y

franchisee satisfaction study

2008 retail franchisesFBRViewPoints

7 Learning Express ToysKristin Janger Shannon Fritz

Both enjoy having the freedom to

make the rules and break the rules.

©2008 Franchise Business Review. All Rights Reserved.

APRIL 2008 | VOLUME 2 • REPORT NUMBER 1

C O N T E N T S

4 Wild Birds UnlimitedJim Carpenter, CEO of Wild Birds Unlimited, turned his

passion for his hobby into a thriving business.

6 Parable Christian StoreAccording to Cherie Gregory, “The

pros outweigh the cons” of owning

a franchise.

6 Wild Birds UnlimitedChristina Fore remembers, “Once

we discovered Wild Birds Unlimited,

there was no other option.”




Lots of Opportunities

ere are thousands of franchise opportunities available today, and the retail

sector offers a huge variety of potential businesses for entrepreneurs with

different interests and backgrounds. Retailing continues to get more and more

specialized and targeted to a niche audience.

In the following pages, we’ll introduce you to some of today’s top retail fran-

chises. You’ll meet the CEO of Wild Birds Unlimited Jim Carpenter, and learn

how Wild Birds Unlimited grew to become the nation’s largest retailer catering

to backyard bird feeding hobbyists. We’ll also introduce you to Cherie Gregory

who went from being the secretary for her church to one of the founding fran-chisees for Parable Christian Bookstores. Cherie has grown significantly with

Parable and was honored in 2006 as Parable’s Franchisee of the Year by the

International Franchise Association.

Like any business, owning a retail-based franchise requires a lot of hard work

and putting in a lot of hours. Business partners and working moms Shannon

Fritz and Kristin Janger will share their advice on how together they managed

to find a solid work-life balance as successful franchisees of Learning Express.

For our research on the retail sector, we surveyed over 1,500 franchisees. isrepresents the most comprehensive study of franchisee satisfaction ever com-

pleted among retail franchise owners and we’re happy to report the industry is

very healthy. e data from these surveys is provided in the later pages of this

report and is designed to give you a general understanding of overall franchi-

see satisfaction, and the opportunities and challenges many of these business

owners face.

We hope that you find this information both interesting and useful in your

franchise research. If you wish to learn more about buying a franchise or you

would like to review a satisfaction report on a specific company, please visit our

website at FranchiseBusinessReview.comor call us at 866-397-6680.

Happy Franchising!

Eric Stites

Founder and President

Franchise Business Review

FranchiseBusinessREVIEWT

Driving Better Results.

President & Founder Eric Stites

Chief Technology Officer Jeff Northrop

Director of Business Development Michelle Rowan

Accounting Denise Davis

Copywriter Kevin Duffy

Design & Production Michael Lohmeier

General Information

Franchise Business Review

3 Badgers Island West

Kittery, Maine 03904

866-397-6680

[email protected]

www.FranchiseBusinessReview.com

Top Retail Franchises

Franchise Business Review has surveyed

thousands of franchisees from hundreds

of different franchise brands across the

country. Franchisee satisfaction is one of

the most critical factors that any prospec-

tive franchise buyer should consider be-

fore investing in any franchise system. In

the retail sector, the following companies

have received the highest ratings from

their own franchisees:

• Aaron’s Sales & Lease Ownership

• Wild Birds Unlimited

• Learning Express

• Interstate All Battery Center

• CLIX

• Parable Christian Bookstores

• FAST-FIX Jewelry Repair

• Cartridge Depot

• Tile Outlet




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FBRViewPoints

Wild Birds Unlimited CEO, Jim Carpenter

As Jim Carpenter, CEO of

Wild Birds Unlimited sees it,

he has an obligation to give

franchisees the tools and the

training they need to succeed.

As the first and largest franchisecatering to the backyard bird feedinghobbyist, Wild Birds Unlimited wasfounded on a simple idea that isreflected in their tag line: bringingpeople and nature together.It’s an idea that took root in1981 with a single store inIndianapolis, IN. Today, WildBirds Unlimited boasts over

300 franchises throughout theUS and Canada.

eir success is in large partdue to a franchise supportsystem that is second to nonein their industry. In fact,Wild Birds Unlimited hasa staff of 38 people in theirfranchise support group whoare dedicated to helping theirfranchise owners succeed.ey will even customize their

support to the goals of the franchise.

Franchisees receive assistancein creating a comprehensivebusiness plan, selecting a storelocation, and negotiating a lease. ey receive help with store layout anddesign. ere is an eight-day intensiveretail training course, sales training,point-of-sale training, and of course,

comprehensive backyardbird-feeding training.

And this is all before you even openyour door.

After opening day, WBU’s stellarfranchise support continues. Franchiseesreceive retail support including yourown business consultant, purchasingsupport, product evaluations so you

know which products will add valueto your stores, 12-month marketingprograms with month-by-monthsupport materials, merchandiseeducation, market research, technical

support, and even HR support.

Add to this one of the lowestinitial franchising fees in theirindustry, and you can see why

they have experienced suchstrong and steady growth.

We Help Our

Franchisees Succeed

Jim Carpenter, CEO of WildBirds Unlimited, turned hispassion for his hobby intoa thriving business. And hewants to help others do thesame. at’s why he keeps thefranchise fees so reasonable andis committed to supporting hisfranchise owners in every aspectof their business. “Our businessis really helping our franchiseessucceed in their businessendeavor,” says Jim.

As he sees it, he has an obligationto give franchisees the tools and thetraining they need to succeed. He wantsfranchisees to concentrate on keeping

Franchisees

Fly High

With

Wild Birds Unlimited




their customers happy. “We understandthat every grocery store has bird seed,”says Jim. “What we try to do is providea superior experience and encourage ourfranchisees to build loyalty by gettinginvolved with their local communities,providing birdseed for fundraising, andworking with nature centers.”

is attitude is reinforced by WildBirds Unlimited’s commitment to theirPathways to Nature fund, which hasprovided over $700,000 to supporteducation, conservation and wildlifeviewing projects throughout NorthAmerica since 1999. In addition, theirPathways to Nature for Kids helpschildren reconnect with nature andprovides more than 400 young peoplewith scholarships to attend summercamps at National Audubon Society Centers across the United States.

A Passion for Birds

Jim Carpenter sees the ideal franchiseecandidate as having a passion for birds,nature, and people. And that descriptionfits Bob Shanman perfectly. After23 years of working for one of thelargest engineering firms in the world,downsizing forced Bob to re-evaluatehis career. It was then that Bob decidedto turn his passion for bird watchinginto his business. And he hasn’t lookedback since opening his Wild BirdsUnlimited franchise 12 years ago.

Not that everything went smoothly for Bob.

As a first-time retailer, he made a few serious mistakes at the beginning. Buthe contacted WBU’s support group,and they immediately got him the helphe needed to correct the situation. And

because of the support he received, he

was able to recover and thrive. In fact,he recently won Wild Birds Unlimited’sLifetime Achievement Award. “It’san unbelievably great group of peopleto work with,” Bob explains. “ey arethere to help you succeed because they know if you succeed, they will succeed.It’s really a big family.”




CHRISTINA FORE Age 58

WILD BIRDS UNLIMITED, CHERRY HILL, NEW JERSEY

PREV IOU S OCCUPA TION: INSURA NCE AGENT, M O M

HOW LONG A S A FRA NCH ISE E : 13 YEA RS

How long did you spend researching franchises?

Six months. Once we discovered Wild Birds Unlimited, there was no other option.

Top reason you chose Wild Birds Unlimited?

At the time, WBU was the biggest backyard birding franchise (and still is), and also the most dynamic. It

made more sense to go with winners than the also-rans.

Best part of being your own boss?

Watching and nurturing something from the beginning, being part of its growth and taking credit for

it. And also our staff! We have a complete staff of capable, competent, helpful people. We have a

Human Resource Department, a Marketing/Advertising Department, Purchasing, and thank God, an MIS

Department who’s on call 24 hours a day! The best part is I don’t have to hire and/or fire, do annual reviews,

deal with day-to-day problems, or even learn their names! They’re just there if I need them. And they’re

cheap! A mere percentage of our gross and they’re mine!.

Worst part of being your own boss?

If everyone has the flu (including me), I will be the one to go to work.

Craziest/most interesting thing that has happened to you as a franchise owner? We have

made many, many friends over the years, several of them very “odd.” Oddly, we enjoy them all. I enjoy being

recognized as, “The Bird Lady” wherever I go, and being treated as an expert, even when I am struggling

for answers. Several of our customers are locally famous, and it’s fun being recognized by them as a local

celebrity (still, no one has invited us to dinner). We’ve been on TV, on the radio, in the newspaper, and been

burglarized (OK, that one wasn’t so much fun.)

Advice for prospective franchise buyers?

Be prepared to be consumed, overwhelmed, and exhausted. It will be like first-time parenthood you can

never be fully prepared for the train when it hits you. Once you get over that, it’s a lot of fun and alwaysan adventure.

FBRViewPoints

Wild Birds Unlimited franchisee,Christina Fore.

CHERIE GREGORY Age 64

PARABLE, VALDOSTA, GEORGIA

Previous Occupation: Church Secretary

How long as a franchisee: 3 years


When Parable first proposed franchising, we were among the first stores to jump on board becoming one of

the founding stores to help define standards for future franchisees.

Top reason you chose Parable?

We had been a Parable store for 7 years, and when Parable offered franchising, we saw the benefits and felt

the additional support would help us to remain successful


It allows me to make the decisions of ministry direction, purchasing and appearance.


Even when away from the store I’m “still here.”

Craziest/most interesting thing that has happened to you as a franchise owner?

Winning the IFA Franchisee of the Year award for Parable in 2006.

Advice for prospective franchise buyers?

Go for it the pros outweigh the cons.

Parable franchisee Cherie Gregory.




KRISTIN JANGER Age 37 SHANNON FRITZ Age 37

LEARNING EXPRESS, CYPRESS, TEXAS Previous Occupation: Kristin served as Director of Corporate Communications for a high tech government

contractor. Shannon worked as an Operations Manager for a mutual fund company. How long as a franchisee: Less than 1 year


We began researching franchises in October 2006. By December, we had selected our franchisor and signed

a letter of intent with our landlord. We finalized our lease and franchise agreement in January and, after a

whirlwind of activity, opened our store in early May 2007!

Top reason you chose your Franchise?

The people! Yes, we saw a market opportunity for an educational toy store in Cypress, TX. Yes, we believed

in the Learning Express concept. But, it wasn’t until we met the people behind Learning Express that we

were truly sold on the franchise. It’s so refreshing and rewarding to work with people who understand your

business and genuinely want to help you succeed. We are proud to be members of the Learning

Express family.


We both enjoy having the freedom to make the rules and break the rules. It’s empowering to create a work

culture that is fun for employees and enjoyable for customers.


The job never ends! As mothers of small children, we both struggle with finding the perfect work-life balance

While we love our business, we love our families more! Fortunately, there are two of us, and we are able to

strike a balance that satisfies our desire to be working women and proud parents.

Craziest/most interesting thing that has happened to you as a franchise owner?

While we’ve had many crazy events occur in our store, we’re still in awe of our first whirlwind of a year. We

didn’t even know what Learning Express was until August 2006. Within the next year, we opened a store and

achieved above-average sales for the franchise. It’s been amazing and fun!

Advice for prospective franchise buyers?Research your market and identify opportunities. Find an organization that you are proud to represent. Ask

questions. Gather intelligence and go with your gut. Make a commitment. Believe in the concept. Have fun!

FBRViewPoints

Learning Express franchiseesKristin Janger and Shannon Fritz.

“We both enjoy having the freedom

to make the rules and break the rules.

It’s empowering to create a work culturethat is fun for employees

and enjoyable for customers.”




Te Benchmark of Franchisee Satisfaction

The Franchisee Satisfaction Index (FSI)™ is the industry standard by which the health

of a franchise company can be measured and tracked over time. Established by

Franchise Business Review in 2007, the FSI is a collective assessment of five critical

areas of franchisee satisfaction. The FSI is used by franchisors and franchise

investors to evaluate and benchmark the franchisee experience in order to make

educated business and investment decisions.

In the last two years, Franchise Business Review has surveyed nearly 45,000

franchise owners on the satisfaction with their businesses. We have amassed the

industry’s largest database of franchisee satisfaction information. This data makes

our Franchise Satisfaction Index one of the most powerful tools for evaluating

franchises, tracking operational performance and predicting future success.

The five areas of franchisee satisfaction included in the FSI are:

Training & Support

Business success is all about execution. And successful execution of a franchise

business is all about the initial training, support and on-going development that

franchisees receive from their franchisor.

Systems

Proven systems and established procedures are why most people invest in a

franchise versus starting a business from scratch. These are the things that make

a franchise run smoothly, maintain a competitive advantage and achieve greater

success over time.

Relationship

Building a successful business and making money are important to every franchise

owner, but much of the long-term satisfaction and day-to-day enjoyment of a business

comes from the strength of the relationship between franchisors and franchisees.

Strong relationships can overcome many business challenges.

Financial Opportunity

While the long-term financial goals of franchisees vary widely, making a l iving and

earning a reasonable return on their business investment is something that most

share in common. Satisfaction with the financial opportunity that a business

generates is a primary driver to overall franchisee satisfaction.

General Satisfaction

General satisfaction is where the rubber meets the road. Has the everyday

experience of owning a franchise lived up to the expectations of the franchisees?

Would they recommend this franchise to others? And most importantly, would they

do it again?

Understanding FSI

FSI can range from 0 to 100% and represents a

weighted sum of positive responses to a specific

question or a group of questions within one of the

areas being measured for satisfaction. If you were

to simply add up all the positive responses to a

question, giving the same value to an “excellent”

response that you give to a “good” or “very good”

response, you would paint an overly optimistic

picture. FSI provides a realistic view of favorable

satisfaction ratings by weighting more positive

responses and discounting lesser responses to any

given question.

FSI ratings provide a reference point or benchmarkto help gauge the overall level of franchisee

satisfaction or satisfaction in a specific area. While

an FSI of 60.9% on its own is not all that valuable,

using it as a benchmark to measure against other

areas, or to compare various franchise systems and

industry sectors is extremely useful.

(fsi)

FranchiseBusinessREVIEWTM

Driving Better Results.




Overall Satisfaction

Each of the five areas evaluated for satisfaction

are summarized here in the overall snapshots.

They are broken out by area and displayed as both

average rating (on a scale of 1 to 5) and percent

response. We include a FSI rating for each area,

as well as an overall FSI rating.

On pages 10–12 we provide comprehensive

franchisee demographic and

market information to help provide a full picture

of franchise owners throughout the industry.

Key Findings: Overall Satisfaction

The results of this study reveal that on the

whole, franchise owners are satisfied with

their franchise business and the companies

they have invested in. It is worth noting

however that a small minority expressed

some dissatisfaction.

Even the best franchise systems have some

dissatisfied franchisees among their ranks.

This is completely normal and you should not

necessarily be concerned about a little nega-

tive feedback. That said, listen very carefully

to these franchisees and try to identify their

specific issues, and address these directly

with other franchisees and the franchisor.

Every franchise is unique with different

requirements, responsibilities and opportuni-

ties. The most important question to ask

when researching any franchise opportunity

is...“Is this business right for me?” A good

franchise system will help you answer this but

ultimately it is up to you to fully understand all

the aspects of the business investment.


2008 retail franchises




Market Information

Units/Territories

The number of franchise units/territories owned by

each franchise owner.

Additional Units/Territories

Asks whether or not current franchise owners

are planning on purchasing additional franchise

units/territories in the future. Please Note: in some

systems, purchasing additional franchise units or

territories may not be an option, or it may not even

be necessary given the business model.

Geographic Location

The geographic breakdown of franchise owners.

Market Size

The market size breakdown of franchise owners.



Key Findings: Market Information

Most franchisees are single-unit operators. Some systems on the other hand

are designed around multi-unit ownership. Be sure you find out which type

ownership the franchisor recommends and that the model matches your goals.

Seek feedback from franchisees who are serving markets and populations

(ethnicity, income level, etc.) similar to the one you are looking to enter.




Business Lifestyle

Franchising Experience

Looks at the breakdown of current franchise owners

by their years of experience within their system.

Work Hours

Looks at the breakdown of current franchisees by

the average hours they work each week.

Evenings

Looks at the breakdown of franchisees by the aver-

age number of evenings they are required to work.

Weekends

Looks at the breakdown of current franchise owners

by the average number of weekends they are

required to work.

Key Findings: Business Lifestyle

Each franchise opportunity requires a unique

set of demands on its owners. For example,

food and retail-based businesses will typically

require their owners to work evenings and

weekends, as well as manage low-skilled,low-wage employees. On the flip side, a

business service franchise owner may work

more traditional business hours but may be

required to spend significant time networking

in the local business community.

It is critical that you understand the skills

and typical day-to-day tasks that are required

should you choose to become a franchise

owner. A good system will be up-front and

clear about these requirements and the

personal skills necessary to be successful.








About this Survey

About Franchise Business Review

Franchise Business Review is a national franchise

market research firm that performs independent

surveys of franchisee satisfaction and franchise

buyer experiences. Franchise Business Review’s

service include commissioned franchise research

projects leveraging proprietary survey processes

and software, as well as industry-wide studies of

franchisee satisfaction open to all North American

franchise companies.

The firm administers the Franchisee Satisfaction

Awards an annual rating of the top franchise

companies based on the highest level of overall

franchisee satisfaction by participating companies.

Franchise Business Review is headquartered in

Kittery, ME and can be reached at 866-397-6680

or by visiting their company websites at www.

FranchiseBusinessReview.com or www.FBR50.com.

Survey Methodology

All active franchise owners from participating companies were invited to

participate in this survey process. New franchise owners that had just

joined the system and had not been in business for 3 months or longer

were not included. Additionally, any franchise owners that had left the

franchise system prior to the survey process were not included.

Franchise owners were made aware of the survey process by their

corporate office and encouraged to participate and share their hon-

est feedback regarding their franchise experience. Franchise Business

Review then contacted each franchisee individually and supplied them

with their unique login information to complete the survey. Franchise

Business Review made at least three attempts to reach each franchise

owner directly by email, the postal service and/or by telephone.

The standard survey consists of a total of 40 questions. The first 20

questions relate directly to the franchise owner’s experience. The

remaining 20 questions are focused on market, lifestyle and personal

demographic questions. Franchise owners had the option to complete

the survey anonymously or choose to share their personal information.

Results represent the aggregated data from 1,650 completed surveys.

Franchisee Satisfaction Index (FSI)The FSI represents a weighted sum of responses to a question or

group of questions. The weighting provides a realistic view of

satisfaction ratings by favorably weighting positive responses and

discounting negative responses. The formula for weighting is done

by assigning the most positive response a 100% weighting and the

least favorable response a 0% weighting. Values falling in between are

assigned incrementally. For example a typical set of responses would

have the following weighting assigned: Excellent (100%), Very Good

(75%), Good (50%), Average (25%) and Poor (0%). Once the values are

assigned, the FSI is calculated based on the weighted average of all

responses. See page 8 of this report for more about the FSI.

Disclaimer

This report IS NOT intended to be an endorsement or recommendation

by Franchise Business Review. Our franchisee satisfaction survey re-

ports are designed to aid prospective investors in educating themselves

about franchising. This report IS NOT intended to replace the typical

due diligence process that any investor should personally undergo prior

to making an investment decision.






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FBR_RetailREV_2008LR